Maximize Your Pipeline
Posted September 6, 2011 by admin“Hey Boss, we really need to do more advertising. I think we should have a TV commercial, and maybe get a billboard or two.” said the salesperson to the Dealer Principal. “Really, how many showroom visitors did you have last month, and what was your closing ratio?” the Dealer Principal responded. The salesperson replied with a puzzled look, “What do you mean by closing ratio?” To calculate a closing ratio, divide the total number of showroom visitors by the number of customers that purchased a unit. For instance, if a sales department had 100 showroom visitors and 10 of them … Read More »
Absorption
Posted September 6, 2011 by adminWhat if your Fixed Operations, which is your Parts & Accessories and Service Departments combined, paid for all of the dealership’s fixed expenses? This, by definition, is called Absorption. Contribution from P&A Appearal and Service divided by all fees in Admin box.
What’s the most profitable square-footage in your dealership?
Posted September 6, 2011 by admin“I can’t afford to go do this training,” said the Business Manager. “No one else can do the paperwork, and we’re just too busy right now. Besides, I’m doing a pretty good job.” What’s the most profitable square-footage in your dealership? If it’s not your Finance & Insurance (F&I) department, you have an incredible opportunity at your fingertips. Let’s do the math. If we take a 500 unit per year dealership that averages $100 per unit in the F&I department, that equals $50,000 in back-end gross profit. If that same dealership were to increase their average to $300 per unit, … Read More »
Stop the Bleeding (Floorplan Interest)
Posted September 6, 2011 by adminJD Power & Associates performed a study in the 2007 Powersports Business Market Data Book to determine the number one reason that customers purchased from a particular dealership. While many would think it’s because that dealership gave them the best deal, this is simply not the case. In fact, the number one reason is that the dealership had what they wanted in stock. This same study was also performed in 2006, and came to the same conclusion. This information is enlightening, but adds to the challenge of maintaining good inventory levels without soaking up all of your profits in floorplan … Read More »
