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Stop The Bleeding!

Income — Income STAYS In!

By: Michael Roppo

We all know that the main areas of income in most dealerships is from new customers, followed to a lesser extent, from returning customers. But a dealership can’t rely solely on income coming in. There are lots of areas where money is going out unnecessarily and smart dealers must find and stop the ways the money is leaving.

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The three main areas that allow opportunities to do more business and stops profits from leaking out out of a dealership operation are the following:

  1. Inability to optimize organizational best practices and processes
  2. Problematic Marketing (and service sales methods)
  3. Bad Advertising

The first step is perform an overall audit of dealership profit center best practices and operating processes. Create the urgency and the need to learn exactly where the business weak spots are and fix them.

Not optimizing opportunities to do business compromises dealership revenue, personal income and increases the odds of losing potential service sales by not focusing in on simple but critical best practices and operational processes.

  1. Inability To Optimize Best Practices and Processes:
  • It’s important to look at the processes in your business objectively
  • Keep in mind that this is often very hard to do if you’re part of the business already
  • Certain processes will just be invisible to you

As the saying goes – you simply can’t see the forest through the trees. Because of this, you might consider tapping into the knowledge of a turn-around industry professional. Why?

  • They are not connected to the dealership people and business in any way
  • They know the industry and can spot and communicate the problems that matter most clearly
  • By knowing the business, they can identify any friction points quickly and get to the root cause

For many dealer operators it may simply be far more exciting, fun and glamorous to advertise and bring in more customers. However, fixing a dealerships profit leaks ensure that we are provide premium care to all our customers in every profit center of the dealership by:

  • Optimize best practices and processes
  • Understand and start making the changes required for the dealership to remove friction points from within the business.
  • Understand that the so-called secret to finding hidden opportunities to do business and increase revenue is that there is always optimization opportunity in every dealership operation!

Is this strategical thinking part of your business planning?

  1. Problematic Marketing:

Many dealership organizations are paying good money for advertising in multiple locations and in many market areas. The ads will often drive people to a website. But the real question is:

  • When a prospect finally arrives on the website, is there anything there that is of value to keep them engaged?
  • Is the site is plain, boring with nothing standing out to the prospect? 

Could you honestly answer the most important question which is: Why should they do business with you and not your competitor?

Many dealer leaders, managers and business owners probably aren’t aware they paid for a silent prospect to arrive on their website – then let them quietly vanish, forever. That’s lost money right there, don’t you think?

Why would you pay to have a prospect come to your site, but when they get there, you just let them leave, silently?

The opportunities to do more business and profits can be leaking away 24/7! You could be collecting those prospects and turning them into qualified leads and valued customers.

The name of the game is customer retention right? If dealers get serious about this very important concept, they too can help boost additional business opportunities and revenue very quickly, just by fixing this one single problem.

Where are the leaks?

It doesn’t cost much to re-market to previous prospects and encourage customers to buy again. Yet not many dealership businesses do this very well at all. And even those who do it, probably aren’t doing it systematically and still leave loads of opportunity to do business and more money on the table. They need help!

Poor marketing can also involve what you say to prospects in order to turn them into loyal long term customers.

Ask yourself:

  • Are you properly making outbound marketing calls?
  • Do you receive inbound calls and are you handling them properly?
  • Are your phone operators trained in any way or do you just let them say whatever they want?
  • Are you sales team allowed to say whatever they want or are they following a high converting robotic sounding script?
  • Are your calls scripted in any way shape or form?
  • Do you track the results of the sales generated over the phone up front and personal over time?
  • Are you continually tweaking your sales leads and or scripts to increase conversions whilst tracking previous versions, for maximum service and sales conversions?
  • Are you spending money bringing in new customers before fixing the above errors in your dealership? Why?

All of the above examples of poor marketing can be the reasons your dealership organization is leaking opportunities to do more business and unable to generate untold amounts of money every single day! If you’re not fixing errors like these, you should be.

3. Bad Advertising:

Advertising is the one area of business that everyone in the company wants to get involved with and lend an opinion. It’s seen as the glamorous and fun part of the automotive business. Everyone thinks they know how to create and influence better advertising campaigns but do they really?.

The quality of most automotive dealer advertising today is made up of a bunch of generic ads with no specific benefit. Some even have gorillas on the roof offering no real or valuable or reasons why your prospect should spend their money with your dealership instead of a competitor.

It seems as though dealership organizations just keep on spending more and more  money on pointless advertising. Someone within the dealership puts something together by making it look pretty and then sends it out of the door, hoping and praying that it works.

  • No one is held responsible for the results.
  • It’s complete spray and pray marketing.
  • It’s the same as hunting blindfolded, hoping that the bullets fired will run into something!

That’s not how to get this done! When you send an ad out, you need to tack its performance like a hawk. Dealers are not in the business of throwing away good money! That’s something to think about and in the process think about the following six questions:

The Big 6

  1. Do you track your advertising spends and returns?
  2. If you made an overall profit with 10 ads, but only five of them were profitable, would you be able to locate the unprofitable ads and cancel them?
  3. Do you know your current advertising conversion rates and the lifetime value of your dealerships customers?
  4. If not, then how do you know how much to spend on an advertisement and still be profitable?
  5. Are you trying to increase current advertising conversion rates and the lifetime value of your customers?
  6. Do you have someone who is dedicated to growing your business by focusing in on the above critical performance indicators and metrics (which cost many dealer next to nothing in doing so)?

Seriously Now! Stop The Bleeding! The real tragedy here is that it really doesn’t cost much to fix some of these leaky profit opportunities!

Michael Roppo
Michael Roppo
Michael has more than 30 years experience in training and consulting for Automotive Domain Results and its parent company, The Mironov Group. He helps dealers attain maximum profitability, customer satisfaction and retention by improving the quality of their management teams and the personnel who come in contact with their customers. Visit his website at

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