Digital Dealer - May 2018 - 22

By Doug Austin
Founder and President,
StrategicSource, Inc.

// Ownership

Save Today...
Gone Tomorrow
There is no question
that dealerships are
focused on cutting costs
in 2018. We see it in our
business, we heard it at
NADA, and we talked
with suppliers who were
honing in on that message as well. Cut costs
and track the reductions...a great objective
for any business or
nonprofit.
So how are dealerships going after cost
reductions? What is the
prevailing cost reduction
strategy used by dealerships? And is the strategy
effective?

MOST COMMON
DEALERSHIP
COST REDUCTION
STRATEGIES

The dealership approach to cost reduction
initiatives is often informal
and not very organized.
This is probably due to
the fact that they are
operating with little infor-

mation and the resources
they have are already
taxed. The approaches
we see most often include
the following:
1. Senior management
will advise managers that
costs are too high and
give them the freedom
to figure out how best to
approach the problem.

CUT COSTS
AND TRACK THE
REDUCTIONS...A
GREAT OBJECTIVE
FOR ANY BUSINESS
OR NONPROFIT."

2. Management will encourage managers to call
in the largest suppliers for
new negotiation session
and new pricing
3. Aggressive managers will call in other suppliers to "Grind them down"
for new price concessions
4. Hope...hope that
someone in the organization will make a dent in
expenses because they
are paid on profitability
5. Increase Sales -
Increasing sales can hide
a lot of operational sins
(expenses)
TOP 5 REASONS
MANY COST
REDUCTION
STRATEGIES FAIL

Some cost reduction
efforts succeed and move
the needle on expenses.
Others never really get off
the ground and can fail for
the following reasons:
1. LACK OF
ORGANIZED EFFORT -

purely tactical approach
going after a few select
categories
2. LACK OF TIME/
PATIENCE - nobody

has the time or desire to
organize the effort and/or
they lack the patience to
see it through if an effort
is created
3. LACK OF
EXPERTISE - even if

they did have the time,
most management teams
don't know where to start
with an effective cost
reduction strategy

4. WRONG
PHILOSOPHY - If the

objective is to obtain a

22

M AY 2 0 1 8

D I G I TA L D E A L E R . C O M


http://www.DIGITALDEALER.COM

Table of Contents for the Digital Edition of Digital Dealer - May 2018

Digital Dealer - May 2018
Contents
Letter from the Show Director
Stop Waiting, Start Changing
Technology Does Not Replace Your People!
Key Buy/Sell Trends for 2018
What’s Tomorrow?
Save Today…Gone Tomorrow
Three Pointers to Maximize Purchased Unit Profitability
Your Best Advertising Target!
NADA Recap BY ARNOLD TIJERIN
Digital Dealer 24 Conference & Expo Recap
Put a Ring on It
“Voicemail:” Untapped Opportunity
10 Questions to Ask When Hiring a Social Media Manager
Omni-what? Your Dealership and the Emergence of the Omnichannel Approach
Digital Dealer - May 2018 - CT1
Digital Dealer - May 2018 - CT2
Digital Dealer - May 2018 - Digital Dealer - May 2018
Digital Dealer - May 2018 - Cover2
Digital Dealer - May 2018 - 1
Digital Dealer - May 2018 - Contents
Digital Dealer - May 2018 - 3
Digital Dealer - May 2018 - Letter from the Show Director
Digital Dealer - May 2018 - 5
Digital Dealer - May 2018 - 6
Digital Dealer - May 2018 - 7
Digital Dealer - May 2018 - Stop Waiting, Start Changing
Digital Dealer - May 2018 - 9
Digital Dealer - May 2018 - Technology Does Not Replace Your People!
Digital Dealer - May 2018 - 11
Digital Dealer - May 2018 - 12
Digital Dealer - May 2018 - 13
Digital Dealer - May 2018 - Key Buy/Sell Trends for 2018
Digital Dealer - May 2018 - 15
Digital Dealer - May 2018 - 16
Digital Dealer - May 2018 - 17
Digital Dealer - May 2018 - 18
Digital Dealer - May 2018 - 19
Digital Dealer - May 2018 - What’s Tomorrow?
Digital Dealer - May 2018 - 21
Digital Dealer - May 2018 - Save Today…Gone Tomorrow
Digital Dealer - May 2018 - 23
Digital Dealer - May 2018 - Three Pointers to Maximize Purchased Unit Profitability
Digital Dealer - May 2018 - 25
Digital Dealer - May 2018 - Your Best Advertising Target!
Digital Dealer - May 2018 - 27
Digital Dealer - May 2018 - 28
Digital Dealer - May 2018 - 29
Digital Dealer - May 2018 - 30
Digital Dealer - May 2018 - 31
Digital Dealer - May 2018 - 32
Digital Dealer - May 2018 - 33
Digital Dealer - May 2018 - NADA Recap BY ARNOLD TIJERIN
Digital Dealer - May 2018 - 35
Digital Dealer - May 2018 - Digital Dealer 24 Conference & Expo Recap
Digital Dealer - May 2018 - 37
Digital Dealer - May 2018 - 38
Digital Dealer - May 2018 - 39
Digital Dealer - May 2018 - Put a Ring on It
Digital Dealer - May 2018 - 41
Digital Dealer - May 2018 - “Voicemail:” Untapped Opportunity
Digital Dealer - May 2018 - 43
Digital Dealer - May 2018 - 10 Questions to Ask When Hiring a Social Media Manager
Digital Dealer - May 2018 - 45
Digital Dealer - May 2018 - Omni-what? Your Dealership and the Emergence of the Omnichannel Approach
Digital Dealer - May 2018 - 47
Digital Dealer - May 2018 - 48
Digital Dealer - May 2018 - Cover3
Digital Dealer - May 2018 - Cover4
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