Car Dealerships: 3 ways you can improve your processes
It isn’t exactly “news” that running a successful business can be an extremely difficult thing to do. And when it comes to the car industry specifically, it is fair to say there can be some unique challenges that help make it one of the most challenging and stressful sectors of all as far as achieving sustained success is concerned.
There are a number of complicated processes that can arise with the selling of vehicles and products. And if you are running a car dealership business yourself, you will also need to be alert to the latest trends and innovations, so that you can adopt the ones that will help you excel in a fast-changing world.
There is, though, at least one “secret” to success as a car dealership business that we can share with you right now: achieving optimal efficiency. By improving your business’s internal processes, you can help make so many aspects of your operations less stressful, at the same time as giving your target customers better experiences.
And the great news is that there are quite a few ways to help achieve all this. From implementing new technologies to drawing upon specialised solutions such as dedicated used car sales invoice software, we have taken a closer look below at some of the key ways car dealerships can enhance their own processes.
How do car dealership businesses make money?
Knowing the broad ways in which car dealership businesses make money in the first place, will enable you to make well-informed changes to your own company’s operations.
Car dealerships typically generate their income via three main methods: new car sales, used car sales, and providing customers with access to attractive financing deals. So, let’s go through each of these in turn.
- The sale of new cars
Many car dealerships will make money in the first instance by selling brand-new cars to customers, and this can be lucrative for the dealer.
The manufacturer will typically pay the car dealer a commission for each vehicle sold, and dealers will also have the option to receive money from any optional add-ons that customers purchase.
- The sale of user cars
In addition to new cars, significant numbers of car dealership businesses offer used cars for sale. Depending on factors such as the nature of the dealership and the geographical area they are operating in, dealers may find themselves generating a higher profit from used cars than new ones.
Used cars tend to be more affordable for the average buyer, and dealers may be able to sell higher volumes compared to brand new cars. For some dealerships, the sale of used vehicles will be their primary income source.
- Making car finance deals available
Finally, some dealerships may also make money through offering financing options. The right car finance package could allow a given customer to borrow the funds they might require in order to get behind the wheel of a new vehicle.
The dealership will then typically earn a commission from the lender providing the loan, and this can be a lucrative source of income.
How can your car dealership optimise its processes to help improve its profit?
As we touched on earlier, the secret to a greater profit if you run a car dealership business, is understanding how to improve one key element of your business: the overall efficiency. This can be divided into two main areas:
- The online experience for the customer
- The productivity of workers
There are a number of different systems and software available to help streamline processes, which can be a huge time and money saver. Here are some of the technologies that can help make your dealership more efficient:
- Automated inventory management systems
As the name suggests, these systems take care of your inventory management without the need for manual input. They can be a real game-changer, significantly reducing the time it takes to track down vehicles and keep up with orders.
- Online scheduling tools
One of the secrets to success with any business is keeping your customers happy. This means making sure every stage of the process is as smooth and convenient as possible for them – from booking an initial viewing appointment and finding an attractive finance deal, to finally signing on the dotted line to take ownership of their new vehicle.
With online scheduling tools, customers can schedule their appointments without having to take the time to call in or visit the brick-and-mortar dealership. Instead, everything can be taken care of online at the click of a button. This can save dealerships time, money, and resources, as there will be no need to spend time or employ staff to take appointments. The software will simply take care of this element for them.
In addition, online scheduling tools make life easier for customers. They will be able to immediately see when there are appointments available, and pick a time that is most convenient for them. A happy customer is more likely to translate into a successful sale, meaning everyone will be a winner!
- Customer relationship management (CRM) software
Quality customer relationship management (CRM) software can help your car dealership business manage its customer relationships by tracking customer data, creating automated emails, and providing detailed reporting of customer interactions.
The data that CRM systems can enable dealerships to gather, review, and make use of, can further help improve the overall efficiency of business processes.
Your car dealership needs to be committed to constantly improving its processes
By investing in systems and solutions to help improve business processes, car dealerships can better ensure they are keeping up with the times, and staying ahead of the competition.
Certainly, there is no room for complacency when one is working in the intensively competitive and specialised automotive sector – but such efforts to improve will also be well worth the time and money investment.
