By Jay Davis, Pacific Energy Concepts
If you’re in the dealership business, you probably already know that lighting can be your sales team’s secret weapon. The right lighting solution can add intrigue to an ordinary four-door sedan or turn the new model year into a must-have – and it’s no secret that a well-lit dealership can be the difference between a customer pulling in or moving on.
So it should come as no surprise that the benefits of lighting go far beyond aesthetics. Done right, new construction or retrofit lighting projects can impact top-line revenues, bottom-line profitability, and overall dealership valuation.
When you are preparing to sell your dealership, you want to make sure it is looking its best. Lighting is an important contributor to that overall good look. However, there are a wealth of options available to you when making a lighting selection – and not all are created equal. It’s important to keep the following criteria in mind when selecting the right lighting for an auto dealership pre-buy-sell.
Dim Lighting Solutions
When presented with various options, many dealership owners are inclined to go the cheaper route – operating under the assumption that any LED option will be an improvement over incumbent technology. At Pacific Energy Concepts, we call this a “dim” lighting solution – which is to say, it yields a dim result.
A dim solution is a price-based analysis that, while it requires the lowest costs upfront, also delivers minimal light improvement and energy savings. In this type of analysis, the performance of a dealership’s lighting system is not evaluated – which means that the new lighting concept might not even result in an improvement of existing light levels. When it comes to dealership operation, that means ultimately greater expenses incurred, reduced cashflow, and impacted sales.
Bright Lighting Solutions
In a “bright” analysis, on the other hand, price and performance are taken into account. Footcandle readings are used to record existing light levels, so that design achieves both cost savings and measurable light level improvements. This type of lighting concept is comprised of high-performing fixtures, with warranties backed by internationally recognized brands. For dealerships, that means an intelligent solution that improves facility aesthetics, boosts sales, and reflects on the bottom line.
Brilliant Lighting Solutions
In the automotive world, this option would be the equivalent of a car purchased with all bells and whistles – panoramic sunroof, satellite radio, leather interior, etc. A “brilliant” lighting solution maximizes performance by delivering premier light levels and aesthetics and maximum long-term ROI – while also going beyond energy savings to leverage wireless lighting controls, automatically detect system health, and optimize light output with motion sensors.
We believe this kind of brilliant system is key – why? Because it allows you to take control and effectively merchandise your product – giving you the visibility and flexibility you need to make an informed buy-sell decision.
Results You Can See
So what does this mean for you and your dealership? An impact on both top-line revenues and bottom-line profitability.
We’ve helped more than 200 auto dealerships across the US achieve over $1mm in annual savings. Most recently we helped the Director of Real Estate for a national auto group take his performance and profits to the max after performing a comprehensive performance-based analysis of multiple lighting options. With upfront costs of $135,560, he was initially interested in pursuing a dim analysis when we met him.
The result would have been a $260,834 increase in cash flow after 10 years. After understanding the value of price and performance, we helped him upgrade his lighting system and increase his cash flow by nearly $324,000 in 10 years after an initial investment of $188,293.
A new lighting solution can not only impact the resale value of a dealership’s inventory, but also the resale value of the dealership itself. Cast your dealership in the best light, and explore your options today.
Jay Davis is the Vice President of Business Development at Pacific Energy Concepts, a lighting design and energy consultancy serving dealerships across the US. He can be reached at jay@pecnw.com or 1-360-571-3200.
2 Comments
Eric Iversen
As a repeat client of Pacific Energy Concepts over the last 5 years, I can say that our results at Lithia stores across the country have been tremendous. When upgrading your lot lighting or your lighting in the showroom and shop, the cheapest solution is often the worst solution. If the company making a proposal to you does not show you the potential cost savings AND the performance results (ie existing and retrofitted footcandle readings), they are doing you a dis-service). If you still have metal halide lights anywhere at your dealership, now is the time to consider a retrofit. Every day you wait results in wasted dollars.
Rudy De La O
Lighting has become more of a point over the last 10 years in all of our dealership projects. In part this is driven by a proliferation in more efficient lighting technologies, which most often are accompanied by easy to use lighting controls. The result is more efficiently lit spaces, both interior and exterior, that optimize the sales environment. Upfront costs still exist, but the ROI timeframes are shortening. And, in many cases the initial investment costs can be off-set by rebate incentive programs offered by local utility companies.