Inventory concerns seem to be at the top of every dealership’s list right now. From chip shortages to more complex problems involving supply chain and pandemic closures, the number one priority across the country is obtaining the right vehicles to meet demand while demand is still breaking records. New retail light vehicle registrations hit a 10-year high (1.64 million) in March 2021 despite the shortages. And looking specifically at pre-owned, the average retail selling price of pre-owned vehicles by new car dealerships has increased by 11% compared to 2020.
This unique situation has created vehicle acquisition opportunities for proactive dealerships to acquire in-demand pre-owned models while engaging prospective leads to turn their sitting inventory quickly. In this post, we’ll cover three ways for dealerships to leverage the current market by:
Take equity mining a step further through advanced marketing tools
Before the year that was 2020, utilizing advanced predictive marketing tools at the dealership level was a great idea that some BDCs took advantage of and others didn’t. Fast forward just a year and these tools aren’t just necessary – they’re often the catalyst that can take slow months over the top.
Without the right dealership tools and technology in place, more simple equity mining programs may seem like the best solution. But unlike the tools that only provide general information, these advanced marketing tools actually integrate data from a dealership’s CRM, DMS and sales platforms with external market data.
Predicting which of your CRM and DMS prospects will likely begin shopping for a new vehicle empowers proactive dealers to tap into factors motivating each prospect’s purchase and buy-back decisions. This data, like changes in a person’s career path or growing families driving vehicles too small for the moment, combined with sales indicators like expiring warranties or over lease mileage, paints a clear picture of the messaging for each owner.
Proactive dealerships can take strategies like targeting customers with the chance to lower their APR and payments a step further by actively engaging customers who are ready to upgrade well before they are shopping. This allows proactive dealers to simultaneously maximize their pre-owned inventory and move cars on the lot by automatically identifying and engaging their best prospects for proactive vehicle acquisition opportunities.
Reconfigure service to feed the sales team with loyal customers
Despite pandemic closures and lockdowns, sales and service revenue fell by just 0.3% in 2020. This means that even with personnel groups cut in half by dealerships looking to keep the lights on during uncertain times, building an effective automotive service-to-sales process hinged on a dealer’s ability to proactively identify and engage potential service-to-sales prospects.
Proactive dealers took this opportunity to assign a service-to-sales liaison (or small team) who leveraged the previously noted advanced marketing technology tools to proactively engage potential buyers. This person (or team) is empowered to meet service customers where they are with the right message at the right time, rather than waiting and hoping that customer comes to them during a routine tire rotation or oil change.
The team member(s) tasked with regularly identifying prospects before they enter the buying journey requires understanding which consumer behaviors typically precede a purchase, such as changes to a person’s career or a growing family. Service conquest features in Market EyeQ can convert service customers into buyers at a 4x higher rate than simply sending mass equity emails.
Keep customers engaged with loyalty programs
One of the most critical elements to the overall success of a dealership is creating and capitalizing on customer loyalty through the service drive. Loyal customers are always the highest ROI sales and trades, which means keeping a customer beyond their initial sale and first or second service appointment is critical to a profitable strategy.
Proactive dealerships have recognized loyalty is built in the service drive, with the number two influence on continued brand loyalty (only after the sales experience) being a customer’s maintenance and service experience.
Proactive dealerships are taking a progressive approach to build customer loyalty in the service drive to increase sales and acquire in-demand vehicles from current owners. By utilizing behavior prediction technology tools, these dealers can maintain consistent communication with their loyal owners and capitalize on every opportunity as they pop up toward the end of finance terms.
By continually serving customers with well-timed alerts and following ever-evolving dealership service drive best practices, dealers can build the type of service experience that best reflects their overall brand while prioritizing the buyers most likely to re-enter the sale cycle.
Taking equity mining a step further may seem like added weight to your team, but by developing a specific role at your dealership that allows one person or a small, tight-knit team to work together to build loyalty, dealers are empowered to take advantage of additional sales and pre-owned vehicle acquisition opportunities while building sustainable, long-term loyalty.