How a Top-Rated Dealer Uses CDK Drive to Protect Fixed Ops Gross Profit
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by CDK Global | 16 February 2018

How a Top-Rated Dealer Uses CDK Drive to Protect Fixed Ops Gross Profit

Take a quick look at the online ratings for Freehold Buick GMC — five out of five stars from Cars.com, 4.9 on DealerRater, and 4.5 stars on Google — and it’s clear that this central New Jersey dealership is doing something right.

“We strive for every sales and service customer to receive a VIP experience,” says Parts and Service Director William Marter. After all, happy customers lead to repeat business. But protecting profits is equally important.

To help Marter guard the bottom line, he relies on the CDK Drive Dealer Management System to ensure consistent pricing and accurate, justified discounts.

“Consistency and accuracy not only build trust between our customers and dealership, but a smooth checkout also saves the customer time — and time is everything. No one wants to stand around figuring out if the pricing is right,” he states. “We set the price in the system and we’re done. And if the customer is using coupons, they’re applied automatically to the correct line and are easily visible to the customer, so there are no questions,” explains Marter.

He adds that there’s also much less arguing between Parts and Service as to where the discount will occur. “Some coupons come off labor, some off advertising, some by sale amount of parts or gross profits of labor. We can split it however we want, but when it comes to the price, we set it and forget it,” says Marter. Our Drive DMS then runs the transaction according to the setup.

Discounts on Drive are extremely flexible in their setups and minimize mistakes, abuse and time. “Right from the Setup Discounts Option, we can define the discount type, fixed amount, fixed percent or target price, and apply discounts to labor and/or parts,” explains Marter. “We can also control the amount of a discount by setting up a maximum,” he says.

Managers can further define which labor type each discount is applied to, along with a warning for minimum profitability by dollar or percentage. Discounts can also be applied to Service Pricing codes automatically. Additionally, managers can control the general ledger accounts to which they’d like to post the discounts for labor and/or parts.

Drive also lets managers easily track discounts by discount type and advisor or by advisor, and all the discount types that they’ve used. The report displays all the necessary data to effectively track and manage how discounts are being applied. “We can drill down to the actual Repair Order if we need to, but we usually don’t because of the flexible controls that we’ve set up,” explains Marter.

In addition to protecting gross profits, the setups also help Marter determine the effectiveness of their Parts and Service advertising.

“Say we run a $20 oil change special and we spend $5,000 to advertise the sale. We can track how many people came in for an oil change as a result of that special. If we got only one, we know that may not have been the best use of our advertising dollars! Drive helps us keep track of where we get the biggest bang for our buck,” he notes.

After using the system for several years now, Marter can’t imagine going back to the old, arbitrary way of applying discounts or the bickering between Parts and Service.

“There are no manual adjustments needed in accounting. No back-and-forth between departments. Plus I have complete visibility — which means I have complete control,” he says. “And that means we’re more profitable.”

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"I have complete visibility — which means I have complete control.”

— William Marter
Parts and Service Director
Freehold Buick GMC

 

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