October 15, 2021
Set to scale: Building the foundations for growth
By the Solera Insights team
Automotive retail is changing fast, with digital technologies redefining how automobiles are marketed and sold. As a result, dealers are looking to keep up with the trends, constantly searching for new and better ways to invest in a variety of customer-focused digital technologies that will improve the sales process and yield the most significant returns.
But it doesn’t stop there. Judging from the events of this past record-setting year for dealers — with profit levels 82 percent higher than the previous six-year average — transforming the automotive experience to drive growth requires the utmost efficiency and scalability in each of your dealership’s core departments.
So how do you maximize productivity and profitability in each of your dealership’s core departments to drive growth and deliver a better retail process?
Optimize your accounting processes
This is where it all starts. What goes on in your accounting departments has a significant influence on the profitability of your company. That is why it is important to get your accounting department in order if you want to stay on top of your account management needs and access real-time inventory data that will help boost proficiency, productivity, and profits.
Old, outdated accounting methods, such as manual data entry and report production, waste hundreds of hours every month, while others expose your dealership to errors, fraud, and embezzlement.
Highly inefficient processes, for sure. That might explain why some dealerships that are still handwriting checks and receipts for payables and receivables struggle to maximize uptime and compete in today’s digital world.
Maximize productivity in your accounting department to efficiently manage your cash flow, starting with your financial transactions. Having the capacity to produce and publish payables and receivables within the DMS is one example of increasing accounting efficiency.
When you can create cash receipts within your DMS, it reduces the margin for mistakes and provides you with a full audit trail of every transaction that takes place during the day.
Furthermore, the option to produce an electronic deposit report based on the previous day’s transactions simplifies your reconciliation procedure and allows you to submit these transactions in just a few clicks.
Variable ops: Put your customers first
Making customer experience a top priority can go a long way toward improving brand loyalty and helping your business thrive in today’s hyper-competitive landscape. That might explain why 78 percent of consumers surveyed by Deloitte’s Global Automotive Consumer Study rate the customer experience as an important factor in choosing where to buy a vehicle.
When shopping for a new vehicle, most buyers are least satisfied with the long purchase process, as they tend to favor a swift and painless journey where they can get everything done without the unnecessary stress. To maintain a competitive advantage and improve brand loyalty, it is essential to keep your customers and potential customers informed and connected throughout the entire sales cycle.
By adapting to the digital customer experience expected in today’s market and maximizing data usage, you can significantly upgrade the customer experience while reducing duplicate work.
With these actionable insights, you can give customers what they want: a simple, hassle-free buying experience. Task your team with finding swift and efficient methods to streamline the purchasing process, such as reducing the amount of time spent on data collecting and utilizing predictive analytics to remain one step ahead of your customers.
Fixed ops: Streamlined workflows for a delightful customer experience
As its name implies, fixed operations are the reliable profit center for dealers, helping to offset downward trends in variable operations. Because this accounts for more than half of your total earnings, you should have efficient procedures and systems in place to optimize your investment.
Investing in smoother fixed operations will help optimize your vehicle-servicing capabilities and enhance the service experience for your customers. Focus on digital retailing, for example, by improving your online paperwork, setting up a printed credit application, and ensuring appropriate deal pricing, deal closure/structures, and so on.
Get started by improving your service initiation to proactively speed up the process and delight your customers. This can include building up a user-friendly, mobile-optimized self-service portal on your website that provides your customers and potential customers with convenient online booking options.
Also, with better service advisors who provide accurate, fair pricing to your customers and keep them informed, you can bring simplicity to your service bay and make the best use of your assets with more streamlined workflows.
Marketing: Unlock endless business opportunities with better data
The pandemic put a spotlight on dealerships’ abilities to compete in the digital world. But the truth is it only accelerated a trend that was taking shape for a long time.
Before visiting a dealership, potential buyers spend 15 hours or more researching four or more websites and visit the dealership more prepared than ever before. Whether a prospect interacts with your brand online or in person, you cannot afford to push them to your competition.
That is why it is important to learn what kind of information customers are looking for and adjust your dealership’s perspective to suit their requirements. Using omnichannel marketing, you can easily reach out to many prospects across multiple channels and create a positive view of your dealership among potential customers.
Improve dealer spend
With an average dealership using about 10-15 software products to track metrics and measure their sales performance, it becomes difficult to optimize daily workflows and maximize performance. Your DMS partner can help analyze spend not only to create efficiencies but also to eliminate duplicate spend and reduce spend month over month on underutilized or overlapping technology.
With dealers looking to take advantage of the industry’s explosive profitability and expand their operations, now is the best time to implement efficient, scalable systems and processes that can help you take these actions and more.
Watch our webinar Set to scale: Building the foundations for growth and learn how to avoid risk time-wasting tasks and duplicate work that limits productivity, eats into your bottom line, and stifles growth.
For more information on DealerSocket, visit https://www.solera.com/solutions/vehicle-solutions/dealersocket/