Automakers and their dealer networks cry long and hard about their so-called razor thin margins, but I can't believe all the revenue opportunities they let slip through their fingers. Oh sure, they'd love to see things like telematics kick-in full force so they have something new to sel" />

Issue: Jan 2003


The Money’s Out There



Any successful aftermarket product or service should make the profit-seeking divining rod twitch for dealers and OEMs.

by Gerry Kobe

Automakers and their dealer networks cry long and hard about their so-called razor thin margins, but I can't believe all the revenue opportunities they let slip through their fingers. Oh sure, they'd love to see things like telematics kick-in full force so they have something new to sell, but I'm talking about the things that are available for sale right now. Things the public would buy but automakers and dealers don't offer.

Being a Michigan driver, the first thing that comes to mind is snow tires mounted on wheels. Go to the dealer and ask him if you need snow tires and I'll give you odds that he'll tell you "no." But being a snow tire user myself, I can tell Mr. Dealer that there is a HUGE difference in the way a car handles on snow tires versus allseason tires. And if the dealers would promote a wheel and tire package at reasonable cost, they could not only make a few extra bucks, but they could keep their customers safer as well.

While I'm on the winter kick, it would also be nice if the dealer offered block heaters. I asked several people if they would purchase such an option for its faster warm-up benefits and it was a slam-dunk. The reaction was the same when I advanced a suggestion that dealers offer remote starter kits for cars that would allow people to start their cars from inside their home or office. They sell like crazy in the aftermarket, but try to get one from the dealer. These things are simple to install and if the OEMs would engineer a plug-in module the dealers could pop it in in minutes.

And what about insurance packages? It might be nice for an automaker to offer a little bit more affordable insurance for its loyal customers. Heck, if an automaker doesn't want to do the "self-insure" thing, it could easily negotiate an attractive rate with an insurance company that would make up the difference on volume.

The same goes for gasoline. It's a piece of cake for a dealer to install some self-serve pumps that require a dealer card to activate. The gas would be a few cents a gallon cheaper than the going rate and only available to customers that bought cars there. A cheap automatic car wash also would be a good investment to get people used to coming back to the dealership. After all, that's the trick. Sell somebody a car and then get them to come to you for service.

To that end, what about offering a customer a high-value "service package" when the car is sold. It would include oil changes and filters, wiper blades, bulbs, air filters and other necessity items. Now the dealer needs to do the math and figure out a cost and convenience factor that is competitive with the 10-minute oil change places, but hey, he's got the money up front and he's got the customer coming back for service. Who cares if he doesn't make a lot of money on the oil changes? Sooner or later the customer will need brakes or shocks or a major service and suddenly the dealer is in the catbird seat. Let's face it, the OEM is going to make money on any component that is sold, be it tires or wheels or even a TV that straps into the back seat for the kids to watch. And any labor performed, such as oil changes or detailing, are pure profit for the dealers. So why aren't these guys revved up about it?

That's a million-dollar question, because any successful aftermarket product or service should make the profitseeking divining rod twitch for dealers and OEMs. But of course it's human nature and a heck of a lot easier to just do what you did and get what you got and then complain about it.

Well, I'm not listening. Ideas are free, the customer deserves more and the money's out there.









 
“Okay, 0 down, 0 percent interest, $5,000 cash back and I’ll walk your dog and mow your lawn for a year. That’s my final offer.”


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