Paid Protection

Dec 3, 2009

Many restylers have worked to cultivate and nurture relationships with new-car dealers as well as used-car lots. There are many benefits to both parties in such partnerships, especially in the paint protection market.

Not all dealers have the expertise and training to properly install film, and a dealer that has a trustworthy, dependable partner restyling shop can realize a greater margin in each sale.

Manufacturers of film products offer ideas and discuss how restylers can capitalize on this business model if they aren’t already partners in the paint protection business.

Show me the money

It’s true that your margins will be slimmer when installing paint protection film at a dealership compared to the profit margin with individual retail customers, but they certainly can be good margins. In order to make the most out of working at a car lot, you’ll need to work- and make few mistakes – and manage your workflow well between retail and dealership customers.

“It’s profitable only if your installation time is less than two hours for a full install, and the number of do-overs is kept to an absolute minimum,” says Brett Webster of Venture Tape, Rockland, Mass. “Volume is only good, at low margin, if you have the excess capacity. You wouldn’t turn down retail installs for dealership work, in other words.”

At the same time, PPF is a product that’s especially well-suited to new-car dealerships. It’s painful to imagine a single chip or ding in that brand-new, shiny paint finish-especially for the customer who just committed to buy it.

“Every single vehicle ought to have PPF when it’s sold,” says Lane Carter of Funklines Designs, Cincinnati. “It’s such a good investment for the consumer, the end user. It has to have no chips or dings in it; you want to get the PPF on there before it has chips in the paint.”

At XPEL Technologies Corp., San Antonio, Texas, it’s understood that dealers with cars on the lot that have paint protection film have a decided opportunity to move such vehicles.

“Paint protection packages can easily add $500-$700 gross per deal when marketed properly at successful dealerships,” notes Celeste Steele, XPEL’s marketing Specialist. “This means that for those dealers who combine successful PPF sales with good management, they can maximize their profitability and delivery.”

Steele offers this gross-sales scenario that installers can share with dealerships: “If a dealer delivers 100 new units a month and sells PPF in-house on the hood and bumpers on 50% of them at an average sell price of $750 per car with an average cost per car of $250 for materials and labor, they stand to gain an additional $37,500 in gross, which is $25,000 of actual profit on their bottom line.”

In addition to providing profit for yourself as well as the dealership, installing PPF gives you a solid link to the end user. Max Stutz, StoneShield product manager at Avery Dennison’s Industrial and Automotive Products Division, Strongsville, Ohio, says that, “No. 1, it’s the product that an educated consumer wants; and if he’s experienced the product in the past, he will request it from the dealer. There’s been a good, positive movement in sales.”

Now that buyer knows about your shop, your products, and might have other vehicles he or she might buy accessories for – possibly from you.

“I think dealerships are an excellent avenue to bring restyling products to the end consumer for the simple fact you have access to a huge number of people,” says Jeff Boettcher of 3M, St. Paul, Minn. “When someone is buying a new vehicle at a dealership and they make the choice to add PPF, there is the possibility that they may also want it installed on other vehicles they own. And when you’re selling film at the dealership, you’re there when the consumer is making the buying decision instead of having to wait for them to leave the dealership and make another decision.”

Moreover, notes XPEL’s Steele, “the most effective way for dealers to ensure that customers are reasonably well informed prior to signing, is to make sure that their salespeople are educated on the benefits, limitations, care, etc of the film, and that they pass this info on to the customer as part of the sales process.”

New-car dealers make little or no profit on the sale of the vehicle. It’s the accessories that provide opportunity for them and you to increase the profit margin. When customers can select accessories and upgrades and roll them into the purchase price and financing, it’s a far easier decision for the buyer.

Because “they make no money on the sale of the car,” says Venture Tape’s Webster, “they need to make as much money as possible selling aftermarket products. Anything that adds value for the customer is a good fit for the dealership to sell. Common sense also tells you that the time to protect the car is before it leaves the lot.”

Used but not abused

Don’t forget used vehicles. The same principles apply to car lots selling used vehicles, which usually receive, at the very least, a thorough detailing and reconditioning, if not a few new accessories, as well.

“Most used-car dealers have somebody who comes out and does paint touch-up for them. Once the car’s been touched up, it only makes sense to put PPF back on it to keep it from getting chipped again,” says Funklines’ Carter.

Leasing, reminds XPEL’s Steele. “now accounts for a very large percentage of all new car deals. These leased cars will eventually find their way back to the dealers. If their paint is flawless, they will fetch a far higher price in the used-car market and will be much easier to sell. Business savvy car dealers will pull the PPF off of these lease returns, and sell it all over again to the next buyer, capitalizing once again on the profits.”

And though new-car dealers see the most action, opportunity can be found at dealers that also handle previously owned vehicles.

“Used-car dealerships haven’t been a real strong market because the car has already been chipped, or there might be divots in paint that really need to be filled to make a PPF installation successful cosmetically,” notes Avery’s Stutz. “That hasn’t been a strong market except for the fact that the more that PPF is out on the marketplace, the more demand there is for body shops in the used-car market to replace it if it’s been wrecked and already has PPF on it. That market is growing.

Paint protection film is especially appealing to dealers specializing in higher-end used models, and certified pre-owned vehicles.

“I have seen the most success at new car dealerships, and there has been some in certified pre-owned, especially on the higher-end vehicles,” says 3M’s Boettcher.

Show dealers the profit key

Relationships with dealers are a different animal than dealing with retail customers. Webster recommends cold calling and patience.

“You have to knock on doors and get to the decision maker within the dealership. This could take 30-40 visits; just be persistent!” says Webster.

Adds Stutz: “Another thing that improves the relationship is regularly calling on a dealership in regards to servicing them, and not waiting for the dealer to call. Installers need to have a regular timeframe to call on dealers to serve their needs for PPF, and the dealer appreciates that.”

Once you do get in to see that decision maker, let him or her see what you can do if he or she is unfamiliar with your work or the product.

“What I would do is one free install for a dealer, and let them see the value in it; let them see what you’re doing and let them take it from there. They’re not going to do anything they can’t see the value in,” says Carter.

That value is key. And value to a car dealership of any size, in any location, is profit.

“You have to show them the potential profit with selling this product. Once they see there’s money to be made, they need to see a demonstration of your install,” says Webster.

Stutz agrees, noting that “it’s important for the installer to make contact with the sales staff and F&I people, so they understand the wonderful protection that PPF gives paint on a new vehicle. Of course that vehicle then keeps a good resale value because the paint is protected. When a consumer is aware of it, they like the product.”

In fact, the profit potential can help make up for losses in other areas. The graphics market is declining, according to Carter, and paint protection film is a practical product that can fill that gap.

“With the decrease in sales of graphics, dealers need something to supplement what they’ve lost in graphics. PPF is a good fit for them. Graphics are not nearly as popular as they used to be,” he says.

Maintaining that connection with the dealerships once you’ve made it will take some care, as well.

“Maintain a constant presence (at least once a week) at the dealership. Stock their brochures and make sure a showroom car has the film installed,” recommends Webster.

Staying in touch with that sales manager can be difficult in an area with such high turnover. Sales managers migrate from dealer to dealer fairly frequently, according to Carter, and sometimes an additional contact within the dealership will help you keep your name on their list.

“There’s no stability with sales managers at dealerships. They are constantly turning over. But keep in touch with the body shop; when a car comes in that has had PPF on it and has been wrecked, the dealership is going to need it replaced. Right now probably 50% of what we sell is going to guys to repair vehicles that have already had PPF on them,” says Carter.

Many manufacturers offer materials to help not only make the initial connection with a dealership, but also to help their sales team sell the product to the end consumer.

“We have our dealer marketing kit that contains customizable materials for dealerships. An installer can select a type of material that’s common for a dealer, add a slogan for the POP (point-of-purchase), and also put their logo on it,” says Boettcher.

XPEL, too, offers a variety of point-of-sale materials. “We offer detailed brochures, brochure holders, warranty cards, banners and consumer menu sheets,” offers Steele. “Our consumer menu sheet allows the dealer to pick and choose a vehicle make and model, then show pricing for the paint protection installations based on certain packages.”

Avery offers free POP materials that “the installer can use to help promote the PPF, which dealerships like,” says Stutz. And if a dealer provides a “demo installation of PPF on a vehicle so the customers themselves can see the product, and salesmen can show product, that helps tremendously with the dealership relationship. Many times it is hard to explain the benefits without showing the product.”

Relationships, indeed, are key, and Steele notes that a clear plan from restylers is needed. “This plan,” she says, “starts with how they wish to present themselves. Dealerships want to do business with successful companies that will be around to look after their customers in years to come, not just today. It is important that restylers show the product well on their own service vehicles. Comparisons of protected and unprotected areas on the company car can be very effective sales tools.”

Take extra care

There’s no reason to cut corners on any job, but working for a dealership requires special attention to detail.

“A dealerships’ key concern is customer satisfaction. If the customer has a complaint because of the PPF install, the dealership can be adversely affected by the CSR (customer service/satisfaction report. Causing headaches for the dealership through careless installs is the fastest way out the door,” says Webster.

The customer service index is a “report card” on a dealership’s performance based on customer ratings. By helping a dealer maintain positive ratings, you’ll help your own business, too.

Also consider the dealers’ own time constraints, Steele says. “Typically, the end of the month should be avoided,” she says, “as sales offices are at their busiest, and will likely not be able to give the installer enough time to sell their services effectively. Most dealers have sales meetings on Monday mornings, so it is wise to avoid this time, as well. Setting up appointments with decision makers is key. Whenever possible, the dealer principal and their business office manager should be in attendance. If they wish to involve parts, service, detail or any other departments, that is a bonus.”

If your installation team travels to the dealership to apply the film, “a demo installation works very well,” Steele adds. “Not only does it show how quickly they can deliver a quality install, but it demonstrates their level of care and professionalism when dealing with the customer’s car. It will also give the dealership something to sell immediately. When it is possible, installers should do this demo in the showroom, so long as they don’t mind having an audience.”

Once you do your homework and legwork, a partnership with a dealership can be rewarding. Paint protection film is increasing in popularity, and Carter, in fact, compares it to the growth of window tint;

“Not many years ago dealers would not tint windows on cars; now you can’t find a car on a lot that doesn’t have tint. PPF is going to be there eventually. One of these days every car is going to have tint and is going to have PPF. It’s absolutely a growing market and we see even more huge growth potential in that.”

Stutz rounds out the discussion on paint protection films with this assessment: “The market will continue to grow. It will be driven by education of consumer and the importance of the product.”