Article

Fishing For Additional Vehicle Sales

September 2006, Auto Dealer Today - WebXclusive

by David Keller, CPA, CFE - Also by this author

There are various methods available to increase your dealership’s vehicle sales. Your dealer friends, 20 groups and the many different vendors that contact you all have ideas. Realize that there is no right or wrong solution for everyone. They have all worked for someone at one time or another. Trying to find the right one for your dealership may be like fishing. Sometimes you go home empty handed, and sometimes when you do make a catch, it may be bigger or smaller than you expected. The trick is to keep fishing until you find the right catch for your dealership.

Any fisherman knows that half the secret to a successful day of fishing is knowing what you want to catch and where to fish. If you don’t know the type of fish you want to catch and where to find them; you won’t catch what you want. In your dealership that body of water for fishing is found by identifying the market you are trying to reach. You have to do this! You can’t be everything to everyone. Decide what you want to sell and whom you want to sell to. What is their average age? Are they married? How many children do they need to transport? What is the farthest distance your potential customers drive? Once you know which fish you want to catch and where to find them you can focus on the hook and lure.

 
It is nearly impossible for an inexperienced fisherman to catch fish without a hook. Your hook is your current inventory. You can have hundreds of vehicles in inventory, but if it doesn’t match your market it won’t increase your sales. It’s like sticking a hook in a barren pond, no matter how long it stays there it won’t catch anything. Is your inventory in the correct price range? Is it too aged? If your inventory is not fresh and market priced, you aren’t likely to increase sales. If you do manage to sell an aged unit your grosses are likely to reflect it. Do you have an adequate supply of inventory? If not, have you arranged for a line of credit or other financing to supplement your capital so that you can purchase the necessary inventory? With the withdrawal of many finance companies from floor plan financing, dealers must plan their capital carefully to insure that they can afford the necessary inventory.

It’s great to have a hook but every fisherman has a favorite lure. It’s their favorite because it catches exactly what they want and they know this because they have tested it time and time again. Can you say the same about your advertising? Advertising is the lure that every dealership uses to drive customers to the door. Are you using the right one? If you are tracking your advertising you know exactly what lure will work. If you haven’t deemed it important enough to track your ups you should! Tracking units sold is not enough. You must track all traffic. You must know your closing ratio of ups to sold vehicles. It must be company policy to track all customers sold and unsold. Remember, each up you don’t track increases your cost of advertising every month thereafter.

You must test new lures. Just as any good fisherman knows, the best lure might be the next one you try. It’s always good to add another lure to your tackle box. Test alternative methods of advertising while monitoring the effectiveness of it. If you have never utilized direct mail try a campaign. If you have never used on-line classifieds try it. The most important issue is to monitor it. If it works great, add it to your marketing mix and/or remove something that doesn’t.

Hooks and lures are attached to the all important rod and reel, which is the important part for reeling in the fish, or in your case the customer. These would be your auto finance companies, those that can supply the financing for your market of customers. If you can’t get your customer’s deals bought it might be that you have the wrong finance companies in place. Remember, lenders parameters change frequently so you may need to replace or add to your available finance companies regularly.

Last, but certainly not least, is the net required to hold your fish. You won’t keep many fish with a torn or holey net. The same applies to your staff; if they are not properly trained, you won’t keep your customers. Do your sales people know how to sell to your market? Have they been trained to identify the different needs that your customers have? Do you have the right mix of sales people and enough to accommodate the number of customers you hope to attract to your dealership? Spend the time and money to properly train your staff so you can keep your daily limit of customers. You won’t be disappointed in the additional sales.

Good luck on your next fishing trip!
 
Vol 3 Issue 3

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