A Virtuous Cycle for Growth: Finding Profit Opportunities After the Initial Sale

While automakers have long embraced various revenue streams such as financing and servicing, they still tend to focus predominantly on a single transaction at the dealership. What’s needed instead is a mind-set that seeks to monetize a vehicle-identification number (VIN) across the entire life of the vehicle, creating a virtuous cycle powered by advanced analytics whenever possible.

There are six elements of the virtuous cycle that can contribute to profitable growth for automakers:

  1. Trim mix strategy: Use customer analytics to optimize trim offerings.
  2. MSRP and incentives: Set the manufacturer’s suggested retail price to achieve volume and positioning  goals. Optimize the mix of incentives at a granular level for each trim level and region. 
  3. Dealer margin management: Optimize margin levels to align dealer and manufacturer goals. 
  4. Financing: Offer competitive consumer financing options by improving the efficiency of captive finance arms. 
  5. After sales and services pricing: Generate additional revenue and loyalty by targeting offerings throughout the product lifecycle.
  6. Remarketing: Increase the lifetime value of products by analyzing remarketing channels, pricing and volume.