10-year ADP dealer study reveals best ways to increase profits


Dealers wishing to improve per-customer profit should focus on parts and service, according the decade-long “Powersports Customer Value” study conducted by ADP Lightspeed.

The company’s Data Services team collected information from more than 1,000 North American powersports dealerships that use an ADP Lightspeed dealer management system. The data represented more than 175,000 customers who made purchases between 1991 and 2011. The study’s goal was to identify what the average customer spends on an annual basis and compare it to the average amount spent by the top 25 percent of revenue-generating customers.

Data Services found that the top customers purchase parts and unit repairs nearly twice as often. In addition, top customers spend 30 percent more per parts and service purchase. See the complete results in this graphic supplied by ADP Lightspeed:

In light of the results, the study concludes, “Getting customers in more often for routine purchases throughout their lifecycle will improve the total lifetime revenue of each customer more than just focusing on less frequent unit purchases. This is a stark difference from traditional unit sales operations in dealerships today.”

Posted by Arlo Redwine

Like Dealernews’ Facebook page: