Key Considerations Before Committing to an Image Program

Dealership Image Programs

By: Bill Heifner, Renier Construction

Image programs are a major capital expense for a dealership and you need to be able to handle it.

If the manufacturer hasn’t asked you to do a redesign or refresh yet- they most likely will soon. But we believe you can efficiently build a new store or do a major facilities upgrade while still being cost effective. And we’re going to show you how.

Every manufacturer has an image program, but some of them have become quite rigid on what you can or can’t do on your property as part of their program. One of the most important things you can do at the start of an upgrade is find an architect or designer/builder that knows your manufacturer’s image program. Why is that important? Because some requirements of the program are negotiable. And given the cost of these programs, even with incentives provided by the manufacturer, the financials can be overwhelming.

There are many architects and designers out there that can “check the boxes” you’re given from the manufacturer. But checking the boxes and not questioning some of them could bring you over budget or not work with your local dealership aesthetic. A builder who knows your manufacturer’s program has looked at their image program closely and can advise whether you should do the project based on cost. They will also be able to determine what items are easiest to leave out of the upgrade and then help with the negotiation of that.

Let’s talk about cost first. Your CFO will want to be mindful about the cost of the program when considering the dealership rent factor. For instance, let’s say a dealership has $50,000 in rent each month. Then the dealership decides to put in one million dollars in improvements. The CFO needs to consider the financing of those improvements because it is going to drive your rent factor up. And when your rent factor goes up, your General Manager is going to have questions because they’re the ones that must cover any increases in rent factor.

We mentioned incentives earlier, and you need to understand (and ask for) great incentives. Things like scarce makes and models that you can put on your floor. You can also ask for marketing dollars to help promote the new facility. Items like that can go a long way in helping attract customers to come to see your upgraded facility, once it’s complete. But brokering those incentives happens in the negotiation process and it’s something that a knowledgeable builder can help you with when they have a history with a manufacturer and their image program.

Ultimately, manufacturers what to improve customer experience- and that’s why they’re asking you to improve your facility. That customer experience starts when they pull onto your lot. The programs really became robust in the mid-2000s, with upgrades like restrooms and breakrooms with TVs for domestic automakers. Now we see things like customers having a designated space in your parking lot, bright and airy facilities, and a customer lounge when their car is in for service. Manufacturers have started to pay attention to these items within their image program. And as a bonus, they find that beyond customer experience- employee morale increases as well.

There’s a lot to consider before you commit to an image program, and these are just a few of the considerations. To hear more about navigating manufacturer image programs, including what a proper project schedule looks like, please watch the webinar connected to this blog.

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