Dealership Expense Reductions

Rod McDowell
How important is expense reduction to dealers today considering low numbers and such a volatile economy? What are larger single store operations or dealer groups doing today to decrease spend without straining current process, eliminating sales and marketing tools, etc? Are CFO's/Controllers in a position, or willing to consider bringing an automotive purchasing agency into the dealership to provide an unrealized savings analysis? If an agency was guaranteed to provide significant savings, why wouldn't the dealership invest knowing they savings far outweighed the investment?
Michael Sweigart
Rod, The agencies that are interested in being around through the next quarter without laying off 75% of their staff have already made changes to offer new methods to help dealers sell more with less. They have completely changed their business models and become more saavy, I've recently witnessed some small shockwaves by getting calls from long time agency account execs (we are talking 15 year automotive advertising veterans) who just have nothing left at the agency to make money on. The agencies (many of them) have done one of three things: a) buried the heads in the sand and try to make their reps force "old" media down their clients throats b) become vendor whores, offering every idea that comes accross the table with no distinct end goal in mind c) downsized staff in dramatic ways because their income has dropped and been shifted to more effective measureable results-oriented marketing. Then there are the agencies that have already adapted. Print designers out, multi-media designers in. Ins
Rod McDowell
I see your points, especially with the multitude of organizations specifically linked to trying to cut advertising and print spend. However, I'm familiar with a company that has a growing list, more specifically in the top 100 dealer network, and those groups just outside that qualification that provide the following: My partners strategic purchasing services begin with an internal purchasing spend analysis/assessment where they evaluate your dealer organizations procurement processes and controls - including an in-depth AP spend analysis on 70+ expense categories and market comparative pricing on 100+ unit items within 10-12 expense categories. The analysis typically confirms that dealers pay 17-58% above market pricing on many products and services to support their dealer operations. They can help pinpoint where you can achieve measurable, quantifiable hard dollar cost reductions quickly. This will ensure you secure the most competitive pricing possible without comprising the quality products and services

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