Best Practices Feb 27th, 2018

Increase Profits By Enhancing Your Culture Instead of Lowering Your Prices

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By now, most dealerships have their 13-month financial statement in the books, and many dealer principals and GMs are saying, “We sold a lot of vehicles this year. Where did all the profit go?” Yes, the market has contracted a bit, but for most dealerships, profits have dipped further than sales. If the industry is projected to sell fewer vehicles in 2018, it’s even more important to find a way to be more profitable.

Offering the lowest price on your advertised vehicles is not a good plan to increase and maintain profits. Some of you will continue to try to win the race to the bottom with price so you can UA the trade and turn loose your F&I beasts. More and more customers have negative equity, however, and the banks are getting stingier with advances. So, the “race to the bottom” business plan is on the endangered species list — and very near extinction.

Maybe you just don’t know any other way to do business. For some, this has been the business plan for generations.

We already know that no dealership has a competitive advantage in product, price, or financing.

Guess what? More and more customers are learning this too.

So, let me ask you three rhetorical questions:

  1. “How much customer loyalty does this low-price strategy perpetuate?” (Customer Retention)
  2. “How much does this really help your fixed operations?” (Service Retention)
  3. “How long will your top salespeople stay if you take away their ability to make reasonable gross profits due to low pricing strategy?” (Employee Retention)

There is another way. Dealerships all over the country are making higher gross profits, retaining more and more customers, improving CSI, getting better online reviews, increasing parts and service revenue, and retaining their best people. You can accomplish this by offering your customers a unique selling proposition (USP) . . . value you provide beyond product, price, or payment.

You must change your culture from “We will beat anyone’s price” to “We will give you more for your money — way more!” This is exactly what customers are asking for when they question price. They may not articulate it, but it’s what they mean. Your value proposition will need to be a part of every customer touch point, not just your ad campaigns.

Every member of your staff needs to drink the “culture Kool-Aid” and share it with every customer at every touch point in and out of the dealership. Every phone pop, every internet lead, every text lead, every parts and service customer, every showroom visit . . . a complete paradigm shift in culture. Customers want more value for their money, not just to pay less for less. The dealerships that embrace this value culture will see greater profits in 2018 than they’ve ever seen before. Who knows? You might even sell more cars. Start today!


Now that you are ready to make 2018 the year of culture change at your dealership, contact Binary Automotive Solutions at sales@binaryauto.com or 888-883-8557, ext. 307, to learn more about the programs, tools, and training that will get you there.

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