Tuesday, March 10, 2020

How does your dealership find value in tools that don’t directly generate revenue?

Price vs. value scale conceptIf you spend $1,000 on training and it helps your sales team generate an extra $2,000 in revenue, most people would agree that the training was a good investment.
There are a lot of tools, services, and other investments your dealership can spend money on that will have obvious returns. There’s training, marketing, salaries, dealership management systems. You can usually correlate such investments to sales figures, reinforcing why you made the investment – or why you shouldn’t have.

But what about those things you pay for that don’t have an obvious ROI?

For example, consider the new coffee maker you purchased for your service lounge. Can you put a dollar figure on the ROI of a new coffee pot? Probably not. But it does have subtle value to your dealership.

Like a mini-fridge stocked with bottles of water, that coffee maker gives your customers an extra little perk — pun not intended — for spending their time and service dollars with you. This improves their experience and their perception of your dealership, making them more likely to return for future service or even to buy a car.

Consider also your employees who get their day started with a little coffee. That coffee maker helps them attack their day feeling more alert, efficient, and productive. That’s a win-win for your staff and the dealership.

As dealership profit margins tighten and you look for ways to cut costs, you might look to avoid purchases of tools, services, and other items that don’t directly affect your revenue. However, while making healthy budget decisions is always a smart move, you should consider what such purchases would mean for your dealership.

Here are some questions you should ask yourself before moving forward:

Does the tool or service make your dealership more efficient?


Recall the coffee maker? It might not seem like it on the surface, but that purchase can help your employees be more efficient. You could see a similar boost to efficiency with other tools, such as an electronic key control system that secures keys and keeps employees from wasting time tracking down missing sets. Tools that automate processes and smoothly integrate with other systems in your dealership would also save employees time, allowing them to focus on their core jobs. Make sure the tool or service you’re purchasing actually makes your dealership better, even when the dollar ROI isn’t obvious.

Does the tool or service improve the customer experience?


Some purchases you make, like back-end software or an electronic key control system, won’t even be obvious to your customers, but those tools and services can certainly affect how the customers feel about your dealership. The more efficient and effective your sales and service teams are, the happier your customers will be about their experience. Just as the dollar ROI won’t be obvious on these purchases, the effect on customer experience won’t be either. Be certain that the tool or service actually helps you serve customer needs better.

What kind of support does the vendor provide after the purchase?


Many vendors will promise you the world then disappear after you sign on the dotted line. In order for a tool or service that disrupts your processes to really serve its purpose, you’re going to want continued engagement with support and training professionals. Avoid being left twisting in the wind and make sure the vendor can help you get the most out of your investment. Your success with the tool or service should be as important to the vendor as it is to you.

If you’re considering a big purchase for your dealership and you’re questioning the ROI, review these questions before you make a decision. The tool or service you’re evaluating might not have an obvious dollar impact beyond the cost, but a more efficient workforce and happier customers will pay dividends in the long run.