- Image Courtesy of Adobe Stock

Image Courtesy of Adobe Stock

Car dealership profits have been at an all-time high, but successful business owners know you can’t plan for profits to stay at the peak – or when the market begins to normalize, you’ll risk being caught off guard. But with the right strategy you can adjust for the market and adapt to future changes to sustain high profit margins in uncertain economic times.

Gas prices, interest rates, and inflation are all key factors that lead to reduced buyer spending power and can have a major impact on profitability. These conditions also lead to increased costs for your dealership which can be a recipe for disaster if not approached strategically.

Below are some key ways dealerships are futureproofing their profits to secure as many new customers as possible and grow loyalty revenue including

  • Stepping-up digital retailing tactics
  • Going back to the basics to improve the customer experience and save sales
  • Adding value to transactions
  • Driving customer loyalty with personalization

If you haven’t gotten on the digital train yet, climb aboard

The last several years of digital auto retailing transformation has resulted in fewer in-person customers, but dealerships won’t be going anywhere anytime soon. Most consumers are conducting extensive research online, but still feel the importance of human interaction for customization, test driving, and questions around such a large purchase.

This is where dealerships can step up to stand out from the crowd while providing what the OEM websites are not – a personal touch.

Roll out the digital welcome mat.

Consumers are looking for vehicle information and content online, make sure your website is updated, easy to navigate, and provides important information about vehicles, products, and services that you offer to help prospective customers see the value you provide. With so much focus now being placed on connected features and technology, you want your website to show that you are trusted experts and exactly who a potential customer should come to with their questions about an upcoming purchase.

 - Image Courtesy of Connected Dealer Services

Image Courtesy of Connected Dealer Services

Be the technology expert.

Customers have access to a world of information on the internet and they expect dealership personnel to be as tech savvy and educated on vehicle features as they are, if not more so. This means employees need to have access to the same types of technology that customers have such as smart phones and tablets and be trained to use them with ease.

Find ways to improve the customer experience during the sales process

When profits begin to soften it becomes even more critical to secure more sales by making sure that potential customers have a hassle-free experience.

Retain and train employees.

Highly skilled employees and dealership profits are directly linked. With high turnover you incur not only the potential impact on your revenue from fumbling sales, but the costs of onboarding and training new staff. After spending thousands of dollars on advertising to bring in customers, a single negative interaction with a salesperson can lose a customer for life. It is imperative to your bottom line that employees be trained up to understand the needs of today’s customer.

Make a good impression.

Use lot management tools to ensure vehicles are ready to impress and easy to locate for test drives. Nothing kills a deal faster than not being able to locate the vehicle or walking up to a dead battery.

 - Image Courtesy of Connected Dealer Services

Image Courtesy of Connected Dealer Services

Make sure your organization and processes are buttoned up.

It’s not exciting, but it’s impactful. Streamlining processes not only creates efficiencies and cost savings for your business but can also improve the customer experience by reducing the length of the sales transaction. This also helps you move more customers through, and in many cases save a deal that otherwise would not have closed due to a frustrated buyer.

Add Value To Maintain Gross Profits Per Transaction

Finance & Insurance departments, while being one of the most valuable, also can tank dealership profits. Review your F&I department to be sure you have a relevant range of cutting-edge products that drivers actually perceive as valuable from added connectivity and stolen vehicle recovery to vehicle health and maintenance. With processes and training in place specifically for F&I dealerships can maximize profitability and weather fluctuations in sales volume.

Drive Customer Loyalty

And last, but certainly not least, have a strategy in place to continue helpful and personalized communications with your customers after they purchase the vehicle.

Connected Cars and Customers:
With today’s perfectly programmed reminders and alerts on mobile apps, customers expect relevant and personalized communications from dealers and their vehicle as well. A message with a generic offer or service discount is no longer going to cut it, but a message personally addressed to their name, vehicle they own, and noting that they’re due for 50,000 mileage maintenance services --- that is how you stand out.


The role of the dealership in the auto sale process is shifting and to keep pace with consumer needs dealers will have to embrace new technology and go back to basics in some operational and training strategies to maximize and sustain profits.

Bringing in a connected car solution like CarRx allows your dealership to not only add real value to vehicle sales, but maintain direct contact with each customer and vehicle sold to foster customer loyalty.

  • Easily send automated and custom messages for CEL, service alerts and mileage maintenance needs directly to customer’s phones    
  • Increase inventory through trade-ins with direct campaigns to existing customers
  • Ensure customers are directed back to your dealership for service, unlike other factory apps
  • Drivers schedule more services (right from the app) with prompts from CarRx – eliminating customer fears of being pressured into services by an OEM or dealership and increasing lines per RO

Embracing and preparing for change enables dealerships to adapt to the changing markets and protect and even grow revenue.