Running a car dealership can be exciting and challenging. For example, the COVID-19 pandemic showed us that the car industry isn’t immune to global supply chain issues and that car prices can change dramatically.
Despite all this, automotive sales is a robust industry. The U.S. used car market alone was worth over $195 billion in 2021, and it’s projected to reach over $302 billion by 2027, growing at a compound annual growth rate (CAGR) of 7.51% between 2018 and 2028.
Growing a car dealership business takes skill and effort, however. The industry can be highly competitive, and many car dealerships fail.
To increase your odds of growing your car dealership business in 2023, follow these tips:
1. Select a niche and location
If you haven’t already, choose a niche for your car dealership. This can mean specializing in selling a certain type of car, selling used or new cars, or serving a particular type of customer.
Choosing a location for your car dealership serves the same function. It tailors your business to a certain market. However, be aware of the trade-offs of being located close to competitors. On the one hand, it may mean losing some business to the competition. On the other hand, you could benefit from the increased foot traffic generated by people coming to that area to look at a larger selection of cars.
Why specialize? It helps you offer something unique so you can stand out in a crowded market.
2. Research your market
Researching your market is vital to keeping your car dealership busy. You need to understand what car shoppers in your area want. What car models are in highest demand and what trends can you identify? These are important questions to consider.
3. bDevelop a marketing strategy
To reazh more potential customers, you need to develop a marketing strategy. Start by determining who your target audience is. This could mean narrowing down who is most likely to want a car by demographics such as age, gender, location, etc. From there, find out where your target audience spends the most time online and in person. Then try to target your marketing efforts accordingly.
You might run online ad campaigns, put up billboards, or host TV ads. Try to maintain a multi-channel approach and optimize your return on ad spend (ROAS).
4. Build your brand reputation
Building a strong brand reputation is essential to attracting and retaining clients. You want your brand name to be highly recognized so that it’s the first dealership people in the area think of.
Start by gathering positive reviews and ratings from past customers and publish them online for others to see. This serves as “social proof” of your dealership’s quality and service.
5. Establish efficient processes
To scale your auto dealership business, you must put efficient processes in place. Car shopping can already be a frustrating experience for many buyers. By making it as smooth as possible, you can win over their trust. Plus, your staff will benefit from feeling more productive.
Establishing efficient processes can mean investing in customer relationship management (CRM) software, leveraging automation tools, and delegating tasks.
6. Provide excellent customer service
Another important step to growing your car dealership business is providing excellent customer service. According to Tiger Okeley at car dealership Oak Motors, “Selling cars is ultimately still a people business, so knowing how to best serve customers goes a long way.”
Good customer service can include responding to messages quickly, offering warranties, making it easy for shoppers to go on test drives, and more.
7. Build a great team
Your dealership is only as strong as its weakest link. That’s why it’s important to choose the right talent to be a part of your team. Hire the best workers and then support them so that they can do their best work. You can do this by investing in employee training, retention, and satisfaction. Create a team culture of excellence that sees everyone win.
8. Have an online presence
These days, many start their car search online. This means you need to have a website for shoppers to find you—even if they have to visit the dealership in person to buy a car.
Your website can include contact information and a list of your current inventory. That way, people can browse through what you have and come into the shop when they have a car or two picked out. Having an online presence is key to meeting today’s consumer demand.
By implementing these business strategies, you can help grow your car dealership to a new level in 2023.