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Tried and tested lessons for maximising profitability post Covid-19

How Imperial Cars trimmed costs in the sales process to save £4.5m a year

In this post Covid-19 world much of the industry is having to adapt to a new way of retailing vehicles. Predominantly this is translating into a hybrid transaction model combining the best of both online digital and physical showroom interaction.

Currently 90% of in-market car buyers are adopting a hybrid model with the remaining 10% happy to entertain the purchasing of a vehicle fully online (WhatCar? survey April 2021). As the disruptors further ‘normalise’ the pure online transaction model dealers will need to adapt to offer this full online ‘end to end’ transaction option alongside the hybrid buying journey. 

Consumer-driven changes

The changes to buying behaviour are not purely as a result of online disruption, these changes are being driven by the consumer. The consumer favours a ‘self-serve’ option for some, most or all of the car buying journey. It takes away the pressure normally associated with buying a used vehicle and is much more time efficient. 

The million-dollar question is how are these changes to buying behaviour likely to affect dealer profitability now and moving forward as the propensity for consumers to carry out more of that buying journey online increases.

Many of the traditional KPIs dealers work to have not changed and the way in which dealers market their vehicles doesn’t need to change if dealers have already adopted ‘best practice’ in these areas i.e.

  • Buy ‘smart’ – operate a retail back pricing policy
  • Enter market at the right market value using market insight data available from the aggregators
  • Review pricing daily reacting to the market at all times
  • Advertise vehicles with great images and lots of them
  • Ensure you FPAV (Full Page Advert View) is feature and content rich and all factory fit specification is included an accurately described
  • Review all marketing channels regularly, understand the ROI provided by each channel, know your cost per lead and dispose of those channels not performing
  • Use generic vehicle videos to ‘pull’ customers in and personalised video to ‘push out’ to engaged customers
  • Concentrate on your Finance and VAPs (Value Added Products) sales/penetration
  • Offer online transaction to the point of deposit/book an appointment at the very least
  • Invest in market leading finance calculators and application systems
  • Minimise time in prep with great flow management whilst preparing to the highest possible standard
  • Manage and monitor lead handling, response times, quality of response, conversion rates etc. Know your numbers across the marketing and sales funnel
  • Focus on stock turn, all of the above will help sell a car quicker and each day you reduce in your average stock turn delivers additional profit in the metal/chassis
  • It’s not just about managing the marketing and sales function successfully, it’s also about minimising your overheads, particularly in sales.

Changing to sustain

During the first lockdown in early 2020 we at Imperial reviewed the cost of sale in sales salaries and commissions. In January 2020 prior to the first lockdown the cost of salaries and commissions across each vehicle sale was £385. We were operating a traditional sales team model in our showrooms – sales manager, sales controllers, senior sales execs, sales execs, transaction/business managers. 

It was clear that coming out of the first lockdown this sales overhead was not sustainable. It was also clear that during the first lockdown consumers were prepared to ‘self-serve’ online if that option was made available to them as not only was that their only option to reserve a vehicle they also preferred to transact that way.

We had to make some difficult decisions coming out of lockdown in relation to the restructuring of the sales teams and centralising far more of the customer interaction centrally. By utilising Zoom technology, we were able to handle all transactions centrally, remotely interacting with our customers in the showroom, sharing the screen when required, utilising e-signature documentation and also still being able to offer VAPs to the customer at the point of delivery via this video call. In store we only needed resources to meet and greet, facilitate test drives and get the customer to the point of commitment, i.e. place an order for the vehicle. 

All enquiries and appointment bookings were handled centrally by our internal sales support team already so we knew we were maximising the inbound opportunities but we focused more on the appointment generation and taking of deposits to gain commitment. We also booked the appointments in line with available resources at the showrooms.

Notable savings added up

By taking these steps we reduced our cost of sale against a vehicle in sales salaries and commissions from £385 per unit to £211 per unit. Across an average sales volume of 2,200 per month this equated to an additional £382k on the bottom line per month, £4.5m per annum.

Maintaining and increasing profitability is not just about selling more cars and more VAPs, obviously this helps, significant savings can be achieved by focussing on your numbers.

Ask yourself this – do you truly know how many leads you’re generating monthly? What is your true cost per lead across all of your marketing channels? What is your overall cost of acquisition in relation to the sale of a vehicle? What is your conversion from lead to sale? I could go on but until you understand the marketing/sales funnel you can’t expect to maximise your opportunities and thereby maximise your profitability.

By adopting the basics bulleted above, minimising your cost of sale, focusing and drilling down on your ‘numbers’ and finally meeting or exceeding the consumers expectations you will undoubtedly generate more sales and more profit from those sales.


  • Tally up every lead that comes into your sales team
  • Assess the true cost of everything
  • Calculate the value of investment on each sale
  • Consider which elements customers might be willing to take on themselves
  • Make lockdown solutions permanent where they are working

By Neil Smith: Former Imperial Cars operations director and Cazoo retail operations director now working as a consultant in the automotive industry specialising in the used car retail sector and digital vehicle retailing