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From: Jared Hamilton
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Scott Joseph

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The Only Three Ways To Grow Your Dealership

Do you have a game plan linked to all three?
Right now many of us have set goals for what we want to accomplish in 2011.  Any time I plan our business goals and strategies it is with the following in mind…
The reality is there are only three ways to grow your dealership or any business for that matter.
  1. Increase your number of active customers
  2. Increase your average profit per transaction
  3. Increase your customers’ repurchase frequency
Look at this conservative example shown by yearly sales (of course this same formula can and should be applied to every area of your dealership):
http://blog.jandlmarketing.com/blog/2011/2/2/the-only-three-ways-to-grow-your-dealership.html
 A 10% increase in each of the three areas equals a 33% increase in profit!
Suggestions to grow your customer base
Increase your leads or inquiries through:
  • Referral systems
  • Acquiring conquest customers at break even up front and make a profit on the back end
  • Advertising
  • Turning service customers into sales customers
  • Running special events
  • Using public relations
Increase your customer retention rate by:
  • Delivering higher than expected levels of service
  • Communicating frequently with your customers to nurture them
  • Improving your customer’s current situation.  You have hidden assets in your customer database where you can actually offer customers the opportunity to reduce their monthly expenses with no money down – regardless of equity.
Increase your closing percentage by:
  • Increasing sales skill levels of your staff
  • Making irresistible offers
  • Educating your customers
  • Gain control of your direction and destiny.  Stop blaming people and circumstances and take total responsibility for your numbers.
Suggestions to increase your average profit per transaction
  • Improve your team’s selling techniques to up-sell and cross-sell
  • Packaging complementary products and services together
  • Increasing your pricing and hence your margins
  • Offer greater/larger units of purchase
To increase your repurchase frequency
  • Advertise your service and parts department so your customers come back to you again and again
  • Communicating personally with your customers (by telephone, letters, email, social media) to maintain a positive relationship
  • Running special events such as “VIP days” “closed door sales” “limited pre-showings” and so on
  • Pull-ahead programs by giving customers irresistible offers before their normal repurchase dates
To help you get started, answer the following questions:
  1. How many customers do you estimate you could sell this year?
    • List two additional sales processes to supplement your current sources of leads and sales.
    • List ways you can use endorsements, referral campaigns, social media to more than double your “word-of-mouth” business.
    • List ways you can generate 20% more qualified leads – and then improve your conversion rate up to 40%.
  2. What could be the value of an average purchase?
    • List ways you can insulate yourself from price competition and charge a premium that fairly reflects the quality of your dealership.
    • List ways you can package your products and services to increase your average profit per sale without sacrificing market share.
    • List ways you can convince just 10% of your clients to give you 100% of their business.
  3. How many times could an average customer buy from you each year (for just front end sales – within a 3.5 year period)?
    • List ways you can structure strategic alliances to enable you to introduce other companies’ products to your clients (and vice versa).
    • List ways you can convince customers to make bulk purchases and commit to “standing order” agreements.
    • List ways you can cost effectively create one or more back end products that your customers will willingly purchase from you.

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