How dealers can uncover hidden profit opportunities across their operations
Dealerships may have more opportunities to grow profitability than they realize, and the answer may not be selling more vehicles or adding resources. Joining us on today’s CBT Live are Jay Abraham, Business Strategist, and Brian Benstock, General Manager and Partner at Paragon Honda, who are teaming up for Beyond Belief, a new CBT News series exploring how dealers can challenge conventional thinking, uncover overlooked profit opportunities and get more value from their existing operations.
During today’s segment, Abraham outlined his central strategy, “yield amplification,” or generating greater results from a business’s existing time, money, people and resources instead of assuming growth requires more spending. Rather than assuming, he encourages dealers to examine how they market, communicate with customers, manage leads and structure their sales processes. Abraham said even small changes can produce significant results when applied across multiple areas of a business. Then, Benstock said this approach helped his team identify more than 180 key performance indicators, improve them individually and compound the gains. For a group selling about 15,000 vehicles annually, he estimated that $100 more gross per vehicle would generate $1.5 million, while cutting expenses by $100 per vehicle would save $3 million a year.
Benstock’s free pickup-and-delivery program shows how rethinking customer experience can grow business beyond the traditional dealership model. In 2017, after identifying a need in Manhattan, the team launched the service at no cost to customers, noting that volume rose month over month and matched a former dealership’s Manhattan business within a year. Average repair orders were twice as high, and the group has since picked up, serviced, and returned more than 200,000 vehicles. It later added seven-day operations and 24-hour pickup and delivery, including overnight service. Dealers can learn that reducing friction and respecting customers’ time can boost service growth and spending.
Both executives emphasized that sustained improvement requires specific goals, accountability and a willingness to challenge accepted practices. Abraham said a goal needs a viable strategy and a process for determining what to do each day, measuring progress and adjusting when results fall short. Benstock shared that Paragon set a goal to double its fixed operations output within 24 months and achieved that result in less than two years without increasing its workforce or capital expenditures. Abraham also urged dealers to look beyond aggregate metrics, including lead costs, and evaluate the actual profitability and long-term value of different lead sources.
By understanding customers more deeply, testing new approaches and borrowing successful ideas from other industries, dealers can identify opportunities to improve performance rather than relying solely on higher sales volume or increased spending.