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The basic: As a dealer you are already familiar with the concept of ROI or Return on Investment. ROI is about investing money and expecting a reasonable rate of return.
For dealerships and finance companies, the underlying assets (vehicles) represent the Investment. The Return is embedded in the payments collected from customers, and the reduced costs associated with protecting these assets. The most significant way to protect your collateral and save money is with the use of GPS vehicle tracking, and the ROI is measurable.
Below are a few metrics from dealerships to give you a better idea of how much your dealership can save.
“Currently, in 2011, with a GPS device on every vehicle, we have 3,700 Active accounts and our repo department is looking for 140 vehicles. The 140 vehicles represent only 3% of our total accounts. This is a 5% reduction of “Vehicles being pursued.” 156 vehicles times $3,800 (average ACV) is $592,800 of working capital back in our pocket. Our recovery cost without GPS devices was $250 – $300, this has been lowered to $175 because of the use of the GPS devices. This equates to a savings of $75 – $125 per vehicle or potentially $19,500 in total savings on the same 156 vehicles” TX dealership
“Average repossession costs per year for Auto Credit of Austin prior to using the GPS tracking device was $450. Since implementing GPS, the price is now $150, reducing repossessions by the industry average of 15%. Potential improvement in profit is in the range of $2,000,000 – $3,000,000 annually” CO dealership.
So what can BHPH and New Franchised car dealers alike do with the money they save annually? The first and obvious answer is to take the money you have saved and increase the quality and quantity of vehicles on your lot. Great idea and you’d be crazy not to invest that way! But there is more than just getting a good deal on a vehicle, as they say…..Here are some unique suggestions for your dealership on how to spend the money saved:
“Cutting back on your advertising funds is like stopping the hands on a clock”
It’s no secret that in order to make more money you need to spend some of it on advertising, it doesn’t have to be extremely expensive for dealerships. Thankfully social media has taken off and those costs are free, you can also try the options below.
*Advertise in Online Classifieds and Auction sites---Print classified advertising has been a staple in auto dealership marketing for years, but the industry has evolved a lot. Today, almost every local newspaper also offers online classified ads that can be bundled with the print ads, or purchased online only. In addition to local newspaper sites, classified listings can also be bought on such properties as Cars.com and AutoTrader. It is worth the time it takes to include photos on you online advertising, so spend the extra money on a photographer or high quality photos to promote your vehicles!
*Think Outside the Box with Coupons---Beyond these options there are some more unconventional advertising opportunities available for auto dealerships online. One that I believe will gain momentum is online service coupons. With this concept, dealers can augment their service & parts revenue by inexpensively creating printable online coupons for their customers.
*Optimize your Web site---This is more important than you may think! As more and more dealerships limit lead purchasing, they turn to their own sites to drive traffic and generate leads organically. Many are redesigning their sites with visual differentiation and Search Engine Optimization (SEO) in mind. The cost of this isn’t significant, but worth it in the end.
Show your sales team and employees that they are appreciated. The money spend will go further than you realize!
Where would you be without your Sales force anyway?? Here are a few ways to show them that the hours they put in are recognized and appreciated:
Team Dinner Party---Dinner parties are social events held to honor and celebrate any occasion. Holding a celebratory dinner party at a nice local restaurant to recognize the efforts of the sales team is an incentive to present your sales team when they reach a significant goal. You can give out special recognition and awards at dinner to salute any outstanding performances within the team.
Extra Vacation Hours or Paid Time Off---Extra vacation hours or paid time off are other incentive ideas to present to sales teams working towards a goal. The time off can be given to all the team members and usually has to be cleared by the human resources department so the information can be logged.
Company Merchandise----Company merchandise such as watches, golf clubs, inscribed glasses, key chains and apparel that has the company logo is another sales team incentive idea. Keep the range of merchandise broad so that it meets the size of the objective at hand. People love free stuff, not to mention the FREE ADVERTISING!
Lunch Hour Massages---WHo isn't goinhg to love this?? Lunch hour massages are a relaxing and pampering incentive for members of a sales team. Hire a masseuse to set up a massage station in a vacant conference room or office where they can give a 30 or 60 minute massages to sales team members during their lunch breaks.
Team Retreat---A team retreat is an educational and motivational sales team incentive idea. Plan a retreat over the course of a weekend at a hotel or other lodging facility. While in attendance at the retreat, give employees time to relax and participate in team building activities and workshops. Retreats are a constructive way to build team camaraderie and re-energize morale.
Last but not least…GIVE A LITTLE!
Donations & Charity events not only foster a positive reputation for your dealership in the eyes of your local and outreach community, but it presents you admirable to your employees as well. There are numerous ways to donate to charity. Simply hold an event at your dealership, which will bring in traffic. Sponsor a fundraiser. The options are endless! Keep these tips in mind:
Pick a cause that you believe in the most – all charities are worthwhile, but which ones are you and your dealership as a whole passionate about?
Can you claim donations for this particular charity as a Tax Deduction? What are the particular tax laws in your country?
What does the charity do with the money – are you concerned that too much of the money is spent on administration fees and staff costs?
Is it no secret at this point that implementing GPS Vehicle tracking can save your dealership money. Franchise & Used car dealerships are reaping the benefits daily. The question is…how will they spend it?