High-Value Add-Ons Improve Your Dealership’s Bottom Line

Cultivate greater customer loyalty and improve profit margins with preinstalled, low-cost items

In order to improve your dealership’s bottom line and remain relevant in the digital age, it is important to consider two main factors: how to set yourself apart from the competition, and where to specifically focus on increasing profit margins.

When devising a solid strategy to accomplish these objectives, it’s crucial to identify universal trends in consumers’ retail preferences, and align your dealership’s sales techniques appropriately. Management must also continually think outside of the box to come up with tactics that position its salespeople most optimally in the eyes of their customers.

The value of preinstalled add-ons

This is not an easy task, but to be successful, every dealership must find a way to address and conquer these challenges. One way to achieve increased income is by preinstalling low-cost items that are perceived by consumers as high-value, and positioning them as complimentary add-ons. These items include:

  • Dealer-branded prepaid maintenance, which guarantees a customer will come back to the selling dealer’s service department to perform scheduled maintenance. What’s more, this maintenance plan can only be used at the selling dealer, unlike OEM prepaid maintenance, which can be used at any dealership.
  • Exterior paint protection, which helps keep the car looking new and increases it trade-in value.
  • Antitheft protection, valuable because car theft is still a prevalent crime in many areas.

The importance of upselling

Additionally, to offset the cost of the preload, a dealership’s F&I department must be able to upsell the exterior paint protection and prepaid maintenance to longer terms, and antitheft protection to a greater dollar amount. To do so, a dealership’s senior management team should set a certain upsell penetration requirement to incentivize its sales teams.

Adding these items to an overall comprehensive sales strategy will undoubtedly create a sense of loyalty, cultivates a more positive opinion of the dealership, and improves profit margins.

Draw attention to the add-ons

Dealers should also be sure to prominently display the items they are including in the sale price of the car on a separate addendum sticker. Sales staff should be trained accordingly, and fully understand the value added by the products to vehicles to better position them with customers.

The information featured on the addendum stickers should also be included in a dealership’s print and online efforts (website, TV, radio, Internet, and social media). There should also be marketing materials on every salesperson’s desk to reinforce the message.

Dealerships cannot implement a one-size-fits-all approach, however. The items mentioned here are just a few examples of the types of innovations that dealerships must implement in order to stay competitive in the ever-changing marketplace.

With dealerships rushing to stand out, many implement tactics without properly validating their customers’ needs first, leading to hit or miss results. By focusing on benefits as universal as these added perks/low-cost items, dealerships eliminate any risk of failure.

Often the car sales process begins online, but there is still a strong need for brick-and-mortar auto dealerships. By showcasing new, innovative ways to stay competitive, dealerships can adapt to changing customer needs and improve their bottom line.

Max Zanan is a seasoned automotive industry expert with nearly 15 years of experience in sales, F&I, and dealership consulting. Max started Total Dealer Compliance (TDC) to help car dealers mitigate the risks and exposure through compliant practices. TDC conducts Compliance Audits and provides an E-Learning platform for dealer personnel to take courses in order to instill the culture of compliance. As the company’s president and CEO, Zanan utilizes all of the skills he has picked up over the years in order to cohesively mentor dealerships on how to increase revenue and profitability in all departments.


Max Zanan

1 Comment

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    Nit June 10, 2016

    I would concur from the buyer side of things… actually this reduces the crappy feeling we all feel towards sales esp auto sales


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