A recent NADA study showed that profitability on both new and used vehicles is dropping and, as a result, dealers are making less and less on their vehicles.

While profit per vehicle is dropping, some industry voices suggest that dealerships should begin looking at overall profitability instead of profit per vehicle. This makes sense in theory, but consider this example: if you sold one car with a $2,000 profit in 60 days you’d seemingly make less money than if you sold three cars in that same 60 days at a $1,000 profit. But what happens when you actually lose money with all of your added selling costs? In that same scenario, using today’s NADA-stated averages, a dealership would lose $58 by selling one car in 60 days vs. losing $174 if they sold three cars in 60 days.

Selling cars at a negative net profit can be a pitfall for dealerships. Not only are margins shrinking, but it also puts additional pressure on other parts of the business to absorb the costs of the Sales department. Furthermore, pumping more vehicles through as a solution vs. addressing the root causes results in more recon work for your Service department from the associated trade-ins. As Service work piles up for your Used Sales department, your store is taxed that much more and may not be able to handle all your customer pay business in a manner that breeds Service retention and satisfaction. Instead of velocity improving the situation, it might actually make things worse.

So, how can you reverse the trend and save profit margins on your used vehicles?

1. Stock the Right Vehicles

Understand the historical data that tells you what has moved in a market. Dealerships that are winning today are not bidding up against one another at the auction, fighting for that same silver compact crossover that has sold well in the past 60 days. Instead, they’re finding alternative ways to buy that silver compact crossover or, even better, they realize that while all the competition goes for the silver compact, you’ve actually had a lot of success selling the black mid-size SUV. Those that win today turn left when everyone else turns right.

2. Price Competitively

The key is to acquire the right car at the right price and get that car to market quickly. Arm yourselves with data and knowledge of trends so you have the flexibility to price aggressively and maintain a margin. Furthermore, when you have inventory that you have a proven track record of selling, you can develop subject matter expertise. Your people know how to sell that model over and over again, and you become the place to go for that type of vehicle – putting less pressure on you having the rock bottom price.

3. Merchandise Sooner to Turn Quicker

The clock starts on a vehicle the moment you take possession, whether that’s a trade or at the auction. Reconditioning can take days, with some dealers reporting that it takes them 10 days or more to get a vehicle retail-ready. While reconditioning optimization is an underserved part of the business, there is a way to work around this. For vehicles that require little work, what’s stopping you from putting those vehicles on your website the moment you take possession? By embedding vehicle stocking into your appraisal process, you can begin marketing that vehicle the second you get it. Many appraisal tools include the ability to take photos during the appraisal. But other tools go a step further and allow you to push that car from completed appraisal to your website inventory in near real time and to marketplace sites in a matter of minutes.

4. Develop a one-to-one marketing strategy

The moment you acquire a vehicle, leading dealerships are finding matches for a vehicle within their customer base. Powerful tools exist to help dealerships find upgrade opportunities within their customer base, so dealers can put their customers in a new or newer car with similar payments and, in the process, reacquire another car for their pre-owned inventory.

Now it’s your turn

The industry took the eye off the ball with a hyperfocus on velocity. Net profits in particular were sacrificed as selling costs, acquisition costs and wholesale costs skyrocketed. Remove your dependency from the auction; find better and underserved areas to acquire vehicles at more reasonable prices. With the right vehicles, you can deploy more aggressive pricing strategies that help you maintain a healthy profit, delight customers and win in your market.

I’ve said it before and I’ll say it again: consumers today are frustrated and tired of the same old tedious, stressful car-buying experience. According to a 2016 AutoTrader study, less than 1 percent of consumers prefer the current car-buying experience. Buying a vehicle is a highly emotional process. Consumers must consider whether or not they can afford the vehicle they love, if their choice is the best choice for their needs, whether they are getting a good deal, and ultimately, if they trust the dealer.
While consumers’ expectations continue to shift, additional digital retailing trends are putting added pressure on dealerships to adapt their processes and technology to better serve their customers.

So, how do we address these concerns and build a more sustainable future for dealerships?

Read more on DrivingSales

Jason Santos is a senior end user support analyst with the Desktop Support Team in our Portland, Oregon office! He’s been working with us for almost eight years. He’s an active member of our PRIDE BRG and, this year, is also helping with Portland’s annual Pride festival and parade! We had a chance to sit down and talk with him earlier this month.

How are you celebrating Pride this month?
My husband and I have been together for over 12 years, and married for the last 2+. During that time, we raised our beautiful niece. In the last couple of years especially, we’ve celebrated Pride by attending Portland’s annual Pride Festival at Tom McCall Waterfront Park and the annual Pride Parade. In particular, I’m volunteering at this year’s Pride Festival, and hope to join the planning committee to better assist with next year! When I’m not at CDK, I live across the river in Vancouver, WA, where we have an annual Pride celebration in mid-July. I’ll be volunteering and attending that event as well.

Do you have a hobby?
I very much enjoy the theater, so I can often be found on and backstage at Magenta Theater, my local community theater. I’m on the Board of Directors and also act as its Volunteer coordinator. I’ve been acting for over 20 years, and have been working with this theater for the last 3-4 years.

What’s the top of your bucket list?
I would love to ride some of the world-record holding roller-coasters! I’ve managed to ride coasters in at least 12 different theme parks, but there are so many more!

What gets you out of bed in the morning?
My wonderful husband, who always makes sure I am well dressed, fed and have my daily dose of coffee each morning!

What are you most excited about in the coming year?
I’m excited to become more involved in the Pride BRG at CDK, and in the planning for next year’s Pride events in my local community. I really want to see our community improve and gain even more acceptance.

Thanks for taking the time to talk with us this week! We’re excited to hear about what you’re doing at work, in the community and beyond. Check back next week for Ruby Tidwell’s employee spotlight!

This week, we talked to Ruby Tidwell from our Portland, Oregon office! She’s a software engineer II on the Credit & Compliance team, as well as a member of the Pit Crew and Pride BRG. Since she started with CDK Global two years ago, she says it’s been important for her to be able to bring her whole self to work each day. Ruby told us, “I do my best to bring advocacy, inclusion, representation, and compassion to work each day in the hopes of increasing all of these things in my office location and in CDK as a whole,” – we love that!

In honor of Pride, I’d love to know how/if you’re celebrating throughout the month.

I will absolutely be celebrating Pride this month (and every other month)!

At work, I was honored to help the Portland Pit Crew host a Pride Celebration, where we featured some LGBTQ+ (Lesbian, Gay, Bisexual, Trans*, Queer) history, commonly used terminology, and tips for being an effective Ally. The feedback we received was overwhelmingly positive; these events are so important for raising awareness, maintaining visibility, and promoting equality within our company and beyond. I encourage anyone with questions about the LGBTQ+ community to reach out to the Pride BRG or find resources online (the Human Rights Campaign, GLSEN, GLAAD, PLFAG, and It Gets Better Project are great places to start).

For members of the LGBTQ+ community, having Pride in one’s self is both a personal and a public act nothing short of revolutionary. To take Pride in who we are — in spite of a constant barrage of subtle and overt messages telling us that we are wrong — is a formidable and ever-present challenge, as well as one of the greatest sources of inner peace and societal transformation. Pride says, “I will be myself without hiding or feeling shame. I will live my truth, and I rejoice in doing so.”

It was Pride that taught us that we are not alone. It was Pride that united the community. It was Pride that moved us into public awareness. And it was Pride that began and continues to turn the tide of societal attitudes and legislation closer to justice, compassion, and inclusivity for everyone. Pride month is a time for reflecting on and celebrating the progress that has been made, and a time for acknowledging the huge amount of work that still needs to be done before LGBTQ+ individuals truly receive equal treatment in the world. Indeed, Pride has saved lives and continues to change the world for the better. I’m very proud to be a member of the Pride BRG, and to work for a company that recognizes how vital this BRG is.

To all of our LGBTQ+ employees, allies, and allies-still-in-the-making: Happy Pride!

Do you have a hobby, and if so what is it? How long have you been doing/collecting/participating in the hobby?

Since I moved to the U.S. Mainland from the Big Island of Hawai’i six years ago, one of my main hobbies has been enjoying live music and performances. Concert venues and theaters are some of my happy places. I keep a list of all of the concerts, ballets, operas, and musicals I’ve seen — now more than 50 in total!

What’s your favorite thing about working at CDK?

My favorite part of working at CDK is, hands down, my coworkers. From working through the most frustrating coding challenges to celebrations and end of the day board games, the people I work with are intensely skilled at what they do, and just as importantly, great team members. Since day one, I’m so grateful that I ‘ve continued to learn, grow, and laugh alongside them.

What gets you out of bed in the morning?

Literally, my cat wakes me up.
Metaphorically, sharing in connection — whether it’s with family, coworkers, friends, or strangers. For me, it’s all about courageously and vulnerably showing up in your truth, being unafraid to show people who you are and what you believe in, and, hopefully, making the world a little brighter and a little more loving along the way. Where I come from, we call that the Aloha spirit.

Thanks for being this week’s employee spotlight, Ruby! It was great getting to learn more about you and what you do at CDK Global. We’re glad to have you on our team in Portland. Be on the lookout for next week’s spotlight: Carlo Grasso.

Pride month is a month to celebrate and bring awareness to LGBTQ communities. The rainbow flags you see throughout the month are a constant reminder to find ways to be more inclusive and promote diversity, both in our lives and in our workplaces. In my role as Director of Employee Engagement at CDK Global, I have met so many wonderful and kind people from so many diverse backgrounds and cultures, and I’m motivated to encourage a more inclusive culture at CDK every day. Leveraging the diversity of our associates is an important component to the company culture and operations. Enabling an inclusive environment is a top priority for myself and the business, as it promotes an environment of collaboration and innovation and contributes to a more positive workplace.

Dedicating our Resources

It’s been encouraging to join an organization that dedicates resources to enabling inclusive environments. In addition to hiring me in the past year, CDK has welcomed a new Chief Human Resources Officer, Amy Byrne. From the get-go, Amy has worked on improving employee benefits across all sectors. One of her initiatives has been to enhance our paid adoption leave, infertility treatment benefits and parental leave benefits policies. In addition, as part of integrating inclusion into our business and talent strategy, CDK provides same-sex and opposite- sex domestic partner benefits and transgender-inclusive healthcare benefits.

Building Communities

We’re committed to providing a workplace that is inclusive and where our employees feel they are respected. One way that we do this is through our business resource groups, like the Pride BRG, Latin BRG, Driven (African-American) BRG, Harmony (Pan-Asian) BRG and Empower (Women’s) BRG. Through these resources, we hope to connect and empower our associates and help them find the type of community they are looking for at CDK.

All About Pride

This month, I’ve been working closely with our Pride BRG and our Pit Crew teams to ensure they collaborate to provide educational material to our employees, host local events in our offices and that our Pride BRG members and allies can share their personal stories. We’ve had the chance to share many of their stories with members of the CDK community and beyond on our careers blog and across our social media channels.
It is important that our associates know they are valued, respected and supported, and that they feel they can bring their true selves to work. In the past, the majority of our offices worldwide have hosted events during Pride month to provide cultural education and the opportunity for employees to come together and learn more about the LGBTQ+ community.

I have been an inclusion and diversity professional for over 10 years and connecting people in the workplace and beyond is what drives my passion. Every one of us has a story behind our eyes, and, in my experience, I have seen that people engage and perform at their highest when they feel heard, validated and respected.

Personally, part of what gets me up in the morning is the ability to positively affect the lives and careers of our employees. A video created by the Ad Council, “Love Has No Labels,” struck a chord with me and continues to motivate me. We naturally all have bias, but we can take steps to mitigate bias by stepping outside of our comfort zones and realizing that we are all human and that we have more commonalities than differences.

With the Fourth of July holiday so close, auto shoppers are already revving up for big holiday sales. Now is the perfect time to make sure you’re doing everything you can to draw shoppers into your dealership. For more and more customers, the last-mile shopping touchpoint, that “Zero Moment of Truth,” happens on your digital storefront — or on your competitors’.

Here are some things you can to do to draw the eyes – and the visits – of your potential customers.

1. Fire up some Fourth of July creative on your website and advertising campaigns.

Start by dreaming up new red, white and blue creative that will get your model offers to pop. Work with your agency to brainstorm imagery and messaging that takes advantage of the holiday and articulates your unique brand. Spread the word by pushing the new campaign with a creative banner, an eye-catching display and social media ads to really spread your brand message!

Shoppers convert more strongly when you push a specific offer or call-to-action in your display ad messaging. Display ads are the billboards of the internet. Take advantage of their wide-net approach and help your message and your brand start to sink in for potential shoppers.

2. Hit right at the heart of your customer base with customized targeting.

Once you’ve got your holiday-themed campaign lined up, use your traffic data to find exactly where your customers are searching and how to best be seen by them. Pinpoint your customer base by zip code, income and demographics and watch your ads rise to the top of the pack. These extra steps help you find potential shoppers who connect most with your dealership, and make sure you’re doing everything you can to show up in front of them when they’re searching for their next vehicle.

3. Take advantage of Pandora Advertising to push your message even further.

Pandora is the radio of the internet and America’s leading online radio company. Its lightweight ad delivery lets you get your message out to custom-targeted consumers. Elevate your holiday messaging and promotions by targeting shoppers by zip code, age, gender, music genre, and other audience segments, such as homeowners or military families. Personalize your message to reach your shoppers while they are entertaining family and friends or just hanging out on their patio, and your Fourth of July event will be music to their ears.

Pandora is a strong tool to promote those great holiday savings and offers that your dealership is putting together. Use it to expand your brand’s visibility so that when July comes around, they’ve already got your name in mind.

With a little preparation, you can make this your most memorable Fourth of July ever. Not sure how to get started? Reach out to your Account team and let them take your summer campaigns to new heights.

At CDK, we’re passionate about promoting and developing careers in technology. We launched our Summer Intern Program in 2014 to do just that. This week, our employee spotlight is former-intern-turned-associate Colleen O’Connor!

Colleen spent last summer in our brand-new Norwood office as an intern. Now, she’s a full-time associate! Born and raised in Cincinnati, she attended Xavier University and recently graduated with a degree in marketing.

During her time as a sales intern, Colleen gained authentic real-life experience and industry knowledge. When asked who influenced her experience the most, Colleen said, “My whole digital sales team, but specifically Jon Biggs. He went out of his way to teach me everything he knows about sales, and gave me the opportunity to interact with actual clients. Jon helped me realize that I wanted to pursue a career in this field and made me excited to start my new position.” She continues, “Jon continues to help foster growth in my transition into a full time inside sales position.” Colleen was able to stay on throughout the school year, and is now mentoring the next wave of CDK sales interns in the Norwood office.

Colleen enjoys the exciting, face-paced culture, and loves to laugh and have fun with her peers, while still delivering results.

Overall, why did Colleen want to work at CDK? Her answer captures what many interns experience during their time with us: “A phrase I keep seeing throughout the culture is One CDK, and I believe this phrase perfectly reflects the camaraderie that I experienced while working as an intern. CDK Global makes you feel welcomed; it was very apparent that they not only take care of their customers, but also take care of their employees.”

Some fun facts about Colleen: her favorite movie is “The Greatest Showman,” and her favorite weekend activity is kayaking. When she was younger, she wanted to be a firefighter. Her dream vacation is to go backpacking through Europe.

She says she’s looking forward to completing her first sale in her full-time role, and exceeding expectations within the work environment.

Thanks for tuning in! Come back next week for our newest employee spotlight!

Last year at this time, Google brought back posts to the business listing. This is a chance for a business to share a piece of information, photo or news that will be seen by every customer searching for that business. This was a great win for businesses, who now had the chance to brand and customize even more what they look like on Google.

Read more on DrivingSales

This week, the Employee Spotlight is on Carlo Grasso! Carlo has been working at CDK Global in our Italy office for over 12 years! He lives in Padua, near Venice. He’s a programmer analyst on the AutoLine Release Management team at CDK Global International.

We sat down with Carlo earlier this week to find out what he does when he’s not at the office.
After work, Carlo says “it's nice to come home and talk about the day with my family. We like to relax in the quieter hours, and usually watch an action movie or a thriller. On the weekends, I never miss the opportunity to visit the local Italian villages and towns and try their local specialties.”

As far as hobbies go, Carlo’s favorite thing to do is to be a father to his three children.
“I've been at it for over thirteen years now. Every day is always a new challenge. Some days it’s learning how to work the PlayStation, other days it’s teaching them how to ride a bicycle, playing basketball or board games and much more,” Carlo tells us.

At the top of Carlo’s bucket list is to one day be able to live in front of the ocean.
“Fortunately, on several trips I’ve taken, I was able to stay right in front of the sea. I love the ocean and I dream of growing old at the helm of a sailboat,” says Carlo.

So, what is Carlo’s favorite part of being at CDK Global?
“I'm really proud to work for CDK Global. I try to apply my way of living in everything I do and, in particular, my daily work. I’m glad that my positivity is so appreciated!” We’re glad to have you on the team!

Thanks for talking to us this week, Carlo! Tune in next week for another employee spotlight.

Do you ever wonder what online shoppers are really thinking when they visit your dealership website? In the latest research study by CDK Global, we talked to 265 in-market shoppers to see what they thought about their experience. Check out the whitepaper to find out what you can do to make every shopper’s online experience a little better!