With business currently booming, it can be hard for dealers to stay on top of things and maximise profits across all parts of their company.
With a bumper summer expected this year in both the new and used markets, we have asked five industry leaders for their top tips on how firms can keep the profit rolling in.
Here’s what they had to say…
‘Have an effective omnichannel strategy’
Paul Stokes, head of ecommerce, GForces, says it’s essential for dealers to have an effective omnichannel strategy.
With more-and-more customers choosing to buy and view cars online, it is crucial that dealers have a significant online presence.
In order to meet the demand of modern buyers, Stokes has listed four key areas that dealers should be looking at if they are to succeed.
They are availability, social media, training, aftersales and transparency.
He told Car Dealer: ‘Modern consumers expect swift service, even during out of peak hours. Ensuring you have someone available could be the key to sealing a sale.’
‘Dealers should have an effective presence on social media with fully targeted outreach and be sure to assess performance and react accordingly.
‘They should also make sure their teams are fully au fait with the opportunities offered by online operations and how they can make the most of them.
‘Beyond just selling cars, ensuring that you can offer everything from service plans to key parts online can also be a solid revenue stream and increase customer loyalty.
‘In terms of transparency, make sure any site visitors can see as much information about a car online as possible.
‘Solutions such as Phyron enable you to automatically create high-quality video content for every car.’
‘Dealers will need to accelerate the speed of going digital’
Mat Moakes, CEO of Heycar, says the Covid-19 pandemic is continuing to have a drastic affect on the market.
He believes that in order to carry on meeting demand and making profit, dealers will have to keep improving their existing processes.
Moakes told Car Dealer: ‘The landscape for car buying has undergone a radical transformation over the past twelve months, with numerous challenges for the industry, but clear opportunities have also come out of lockdown.
‘The forced state of remote purchasing has driven a shortcut in customer comfort and expectation for finding, viewing and agreeing a purchase online or remotely.
‘Dealers have once again risen to the challenge and proved they are resilient and innovative.
‘Many came out of lockdown with a significantly more digital business, often providing a delivery service with more streamlined efficient processes.
‘However, Covid isn’t over yet, the challenge of used and new stock shortfall will hit the industry for the next 12 months and with that dealers will need to accelerate the speed of going digital and keep improving their processes.
‘As the year progresses, dealers will also have the challenge that while customers are increasingly happy to buy online the majority still want to visit showrooms.
‘Whilst digital innovation is going to be crucial, ensuring consistent delivery of the basics will be key to dealers being successful.’
‘Digital boom will play major roll in increasing dealer profitability’
Laura Ainscough, brand manager at Close Brothers Motor Finance, also believes that the key to dealers making profit could lie online.
Last year saw more and more people buy online – largely due to the pandemic – and the signs are that the model is here to stay.
Ainscough said: ‘The digital boom that accelerated through 2020 will play a major role in increasing dealer profitability over the summer months.
‘Consumers want simplicity and speed, and a simple and engaging digital forecourt is now a vital first step in helping drivers to research their options from home.
‘Another way of maximising profits is to guide customers through the next stage of the car buying process.
‘Our dealers use the Showroom proposal platform, which works in tandem with a dealer’s website.
‘It helps customers choose the vehicle and finance option most suited to them.
‘Dealers can email vehicle quotes directly, which are then visible in the customer area.
‘Customers make adjustments to the terms via a calculator tool and complete an online finance application form from home and submit it to the dealer.
‘This is yet another step in creating a seamless, simple experience.
‘We are moving into a hybrid world, and to maximise profitability dealers need to reflect that in their offering.’
‘Stay on top of ever-changing market movements’
With values currently changing all the time, Derren Martin, head of valuations at Cap HPI, says it is important for dealers to keep a close eye on the market.
Prices are sky high at the moment, largely down to supply issues like the ongoing semi conductor crisis.
‘Dealers need to stay on top of the ever-changing market movements.’ Martin told Car Dealer.
‘Values are moving so fast they’re out-of-date in as little as a day or two.
‘Dealers aren’t the ones benefitting from these price rises, so with margins squeezed as they are it’s easy to be caught out on what you need to pay for stock and the prices you’re setting to remain competitive.
‘We’re seeing this across all segments. That means checking both trade and retail prices and it’s worth noting that trade prices are a number of weeks ahead of retail, so factor that in to your calculations.
‘The consumer will be doing their research, make sure you’re up-to-speed as well.
‘Review retail prices regularly on current stock. Don’t just look at what you paid for the car, take into account what it would cost to replace it.’
‘Savvy dealers are making customers feel confident in their stock online’
A good website, that maximises profit, should make customers feel confident in dealers’ stock.
That’s the view of James Bush, sales director at Motorway.co.uk.
He believes that market will remain buoyant until the end of the year and that dealers should do all they can to make the most of it.
Bush said: ‘Dealers should continue to adjust short-term to buying cars at comparatively high prices to earlier this year, but ensure they mirror these additional costs in their retail price to maximise potential profits.
‘With demand for used cars super-strong, the market is showing no signs of slowing down and is likely to remain buoyant for the rest of the year.
‘Buying great spec cars that demand a premium retail price will always be advantageous.
‘Maintaining an exceptional online presence will also be key for dealers to engage with the widest possible audience across the UK into the summer.
‘Our top dealers are still selling incredible amounts of cars, often without a customer even viewing the vehicle, despite dealership showrooms now being fully open.
‘Savvy dealers are making their customers feel confident in their stock online with great detail on their website and excellent ongoing customer service.
‘Keen wholesale buyers should consider buying privately owned used cars for more unique stock and higher margin, which will help them maximise their returns.’