Over the past 30 years I have worked in, visited, consulted, implemented programs, and spent time in over 1,000 North American auto dealerships…Way over. There have been hundreds of lessons learned along the way, and I have learned that there is without a doubt, more ways to “skin a cat” when it comes to driving profits into a dealership’s operations than most people seem to realize. But one thing that continues to befuddle me, and makes me ask “why” over and over is the mystery of dealerships selling vehicle accessories. What mystery? Well…For every dealer I have worked at or visited, which has an effective accessory sales program tied in with their new and used vehicle sales operations, there are ten who do not.
When I worked at Courtesy Chevrolet in Phoenix, we had an accessories sales team called the “Pro Shop” and every retail customer who bought a new or used vehicle was brought to the Pro Shop to be greeted and introduced to our accessory program while waiting to get into the finance department and have their contracts and paperwork completed. While in the Pro Shop the two or three employees assigned would review all the information about the vehicle the customer was buying and then show each customer the various accessories and equipment upgrades available for the vehicle they were buying. I don’t think I ever saw a truck sold that did not get accessories of some sort added. Our Pro Shop team had full access to the deal within our DMS and would routinely restructure the deal for accessory purchases, additional down payment and whatever else was needed to facilitate the sale of accessories. The Pro Shop was good for over $100,000 a month in additional profits (revenue was much higher) in that high volume Chevy dealership. Apparently, all those sets of custom rims and tires going out on Silverado pickups, Tahoe SUVs, and even the little Cobalts were quite profitable!
Recently, while working with my friends at Ken Grody Ford with two dealerships in Sothern California, I noticed they were selling a lot of accessories under the “Ken Grody Customs” brand. When a vehicle is accessorized while in stock, the dealership designates it as something special with “Ken Grody Customs” license frames and inserts, as well as a KGC branded window sticker. When I asked Kurt Maletych, vice president/partner at Ken Grody Ford about customers buying Ken Grody Customs accessories to be installed on vehicles in stock without accessories preinstalled, he told me it happens “all the time.” Customers see what they want on the dozens of accessorized KGC inventory in stock and ask for specific items, or the entire KGC Package to be installed on the vehicle they want to buy or sometimes on the vehicle they are currently driving. I cannot disclose how much profit that Ken Grody Ford makes from their Ken Grody Customs accessory program, but I can assure you that the profits add a substantial amount to the dealership’s bottom line net.
I also know of several other dealerships where the revenue and profits generated by their vehicle accessory programs are significant enough to create substantial profit centers. What I cannot figure out is why would a dealership not develop their sales capabilities around vehicle accessories?
In my opinion, this reminds me of the days when some franchised new vehicle dealerships did not sell used cars. They wholesaled every trade-in, until used car sales departments were simply too profitable to ignore. Or, back when I first started selling cars there were many dealerships without finance and insurance departments. The sales people handled all documentation, until F&I departments became too profitable to ignore. So, why is your dealership either ignoring vehicle accessory sales or doing such a poor job of selling anything?
So what’s a dealer to do? I recommend that you attend the SEMA Show in Las Vegas from October 30th to November 2nd. If you read this article soon enough, you still have time. I attended SEMA a few years ago while on assignment to Honda and Acura, and the show was a real eye opener. First of all, SEMA is three times larger than the NADA Convention! Secondly, my first SEMA Show is when I really grasped how much money is involved in the sale of vehicle accessories. Hello, McFly! Wake up, there are major profit opportunities with vehicle accessories.
But wait, there’s more. If you really want to get the inspiration to add over a million dollars a year to your dealership’s profits through the sale of accessories, and you are willing to attend SEMA, then you are in luck.
While at SEMA you can attend the Auto Dealer Accessory Conference and Show Tour. You will have to preregister, and it does cost either $25 or $45 depending on how soon you do it. But, tell me if this description from SEMAshow.com does not sound like a good use of time for a dealer or GM that wants to start selling accessories at their dealership or group:
“Exclusively for franchised and independent Automotive Dealers. Attendees will be treated to a focused panel discussion addressing critical areas of accessory integration and how they impact operations in all key dealership departments. Attendees will then have the opportunity to participate in more intimate round table discussions that will be led by dealership employees covering such areas as accounting, fixed operations, finance and insurance, new and used sales, and accessory sales. This will give participants a chance to have their specific questions answered and learn what is working for other dealerships.
From there, attendees will be invited to attend, and given preferred seating at the Vehicle Connectivity Keynote. To wrap up the day, interested parties will be given an insider’s tour of the SEMA Show highlighting key products and services that will help Dealers increase sales and add profit to their bottom line.”
I highly recommend that you attend SEMA and this dealer session on accessory sales as a dealership profit center. If you are not already making significant profits from the sale of vehicle accessories, then I recommend you commit your team to establishing an ongoing and sustainable program to do so in 2013. I will be publishing plenty of accessory sale “best practice” and “how to” articles on the AutomotiveDigitalMarketing.com and DealerMarketing.com professional network, and you can look for several webinars and conference sessions around this topic that I will be facilitating as well.
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Ralph Paglia is vice president of digital for Tier 10 Marketing and editor-in-chief of the Automotive Digital Marketing Professional Community (www.automotivedigitalmarketing.com).0