When we asked Reynolds & Reynolds to quantify the benefits both they and Southeast Toyota had received from the alliance, their relationship was such that representatives from both firms sat down together to determine that dual value. There were several major areas of value-added for Southeast Toyota:
Eighty percent of Southeast Toyota dealerships are using Reynolds Dealer Management systems. Reynolds has discovered that those dealers are, on average, realizing $200,000 more in annual net profits than SET dealers not using the system. This is substantial considering dealers are categorically small businesses.
Since SET began using Reynolds' web services, it has seen a 52 percent increase in generated leads. The percentage of these leads that closed is up a whopping 45 percent from last year—more than 6,500 new vehicles sold. It's hard to come up with an average price for a Toyota, given price ranges between $20,000 for a Corolla to more than $55,000 for a Land Cruiser. If we use a conservative estimate of $22,000 per vehicle, though, Reynolds' Internet lead-generation system brought SET more than $143 million in incremental revenue last year.
Reynolds' Internet lead-generation system brought SET more than $143 million in incremental revenue last year.
SET also realized significant savings in its parts department. As Wayne Crater, SET's Director of Parts Operations, says, "The partnership between SET and Reynolds & Reynolds has paid significant benefits to both our dealers and SET. Dealer parts departments have experienced increased sales, due in part to the advanced marketing tools from R&R, while at the same time [dealers] have lowered their inventory values and decreased levels of obsolete inventory. In addition, the ability of R&R to provide SET parts managers with several software enhancements minimized the new system learning curve and [gave them] a system tailored to their requirements. All ... these accomplishments translate into increased profitability for both our dealers and SET."
Key Improvements for SET Parts Operations ...
Parts and Accessory sales have grown in excess of 21 percent, or $475 million, during the past five years to more than $2.26 billion. Reynolds has provided an inventory-control parts marketing system, which enabled SET to reach this growth, increase their profits, and achieve operational efficiencies.
Of the 163 dealers, 114 were stocking excessive obsolescence inventory. Reynolds helped to reduce the count by 65 locations, from 114 dealers to 49.