Is it possible to drive dealership profitability and growth at the same time?
Is your dealership looking for ways to increase revenue but needs a few options?
Does your dealership have an interest in driving growth and profitability through finance & insurance products?
Whether your dealership is focusing on growth or profitability (or both!), driving success comes down to smart marketing and economic efficiency. In this blog, you will learn how dealership profitability and growth are measured and what drives the two to success.
How to Drive Profitability and Growth
There are two ways to drive profitability – one is increasing revenues and the other is cutting costs. Increasing revenues stems from improving your sales, and increasing growth stem from your marketing efforts. You almost always need growth to increase your revenue. However, you can achieve an increase in revenue through cutting costs, also known as economic efficiency.
Driving profitability and growth takes some practice, and your dealership may need to try some A/B testing to see what works best. Don’t let that discourage you, though. The testing is worth the effort to have a solid marketing plan and a solid revenue plan.
Dealership Profitability and Growth through Efficiency
Driving dealership profitability and growth is a complex goal with a variety of inputs. Efficiency is a great way to improve your profits, and it’s an easy way to cut excess waste in your dealership. Improving efficiency can also reduce your payroll expenses.
A few ways to drive dealership profitability and growth include:
- Inventory Management Systems: One key to efficiency is using unique systems that make inventory management smoother. An inventory management system ensures you know exactly what you have on hand so you don’t order more, and it makes it easy to know exactly what needs to be sold to drive profits.
- Finance and Insurance Products: As a dealership, selling cars is usually your first priority. A second priority should be selling value-add services to your customers. That includes finance and insurance products like GAP coverage, extended warranties, and maintenance protection.
- Sales and Marketing: After efficiency, a solid sales and marketing plan is critical to ensuring you drive dealership profitability and growth. Growth requires a marketing plan, but it also cuts into your profits. Balance the two wisely for maximum benefit.
Some professionals will say that you have to either drive growth or drive profits, but you can actively try to do both with some discipline. Finance and insurance products can add value to your customers and your dealership’s revenue, and an inventory management system can improve employee efficiency.
With a little bit of dedication, your dealership can be improving its revenue stream.
At The ACE Group, we know how to increase profit while growing your business. Contact us today to see how we can help your dealership boost its bottom line.