A big part of this is based on using the Victory Solutions consulting organization to speak with 200 of the dealership’s previous customers about the possibility of buying back their units. “That turned into a nice amount of additional sales for us,” Shenk notes. “And the sales were made at a great margin per deal.”
On top of that, Shenk says, when you proactively prospect your database and the customers that do business with your Parts and Service departments, you create additional sales from customers who were, in most cases, not already active in the shopping or price process. These customers, however, already have a relationship with the dealership.
Prospecting to current customers and changing the sales process makes for a happier customer, and offers the opportunity to gain considerably more gross margin per deal, Shenk said.
SERVICE AND FLOORING
The performance in the Service department improved somewhat over last year and over what the dealership did in July. In August, Service revenues were $23,843, down from $30,641 the previous August. Those revenues were generated with 5.25 employees and three technicians, compared to 4.50 employees last year, including only 2.25 techs.
Total Payroll in Service during August was down about $2,000, dropping to $14,058 this year from $16,855 in August 2011.
There’s been yet another change in the Service manager position.
“That change moved us in the right direction,” Shenk said, “but we are still not at the operational level I want.”
One other noteworthy expense in August was in Flooring — $14,272, compared to only $916 in August last year. This increase is attributable to three factors, Shenk said.
- The dealership changed flooring companies and ended up with extra days on one account and less than a month of activity due on the new account.
- Kawasaki had a free flooring program last year that is no longer in effect; Kawasaki is now the dealership’s largest flooring expense.
- With the addition of Polaris and Victory, the dealership’s inventory accounts for a much larger dollar amount this year. (Shenk says there is “way too much” new inventory based on store sales.) This year, $560,000 more dollars were floored, a 30 percent increase in inventory.
Bill Shenk is owner and 20 Group moderator of PowerHouse Dealer services, a dealership 20 Group provider and consulting/training company. See Shenk at the 2013 Dealer Expo, Feb. 15-17 in Indianapolis.
This story originally appeared in the November 2012 issue of Dealernews
