With countless evolving factors impacting OEM production and deliveries, now is the time for dealers to focus on the elements they can control to adapt to ongoing inventory challenges in 2021 (and likely beyond).
According to IHS Markit, the latest impacts of the global chip shortage has pushed the forecasted stabilization of supply to Q4, with recovery efforts starting only in early 2022. By adopting a data-driven dealership inventory strategy for pre-owned acquisitions and portfolio management, dealers are empowered to maximize their portfolio regardless of what new obstacles lie ahead.
In this blog post, we explore how dealers can use sales and marketing tools powered by predictive analytics to maximize their entire dealership portfolio, including:
Acquire Profitable Pre-Owned Inventory
PDealership portfolio management is exactly what it sounds like – managing your portfolio, or your dealership’s assets, such as your inventory and your customers. With the success of dealerships’ sales efforts dependent on the vehicles you have in stock, taking a data-driven approach to making inventory decisions is critical – especially with new vehicle inventories being historically low.
By acquiring in-demand pre-owned vehicles, dealers are empowered to both keep the customers they have and chip away at their competitors’ market share, even amid inventory shortages. With industry research finding 41.6% of used vehicles retailed by new vehicle dealerships in 2020 were acquired via trade-in on a new sale, this starts with assessing your incoming trades.
Ensure your sales and service teams are both in-the-know regarding in-demand makes and models by monitoring for localized sales trends. When assessing trades, your team must analyze factors like estimated trade-in value, maintenance history and how similar vehicles have sold in the last 30-90 days. This approach to evaluating trade-ins requires setting internal standards for your dealership’s buyback expectations, such as:
Turn Inventory Faster to Maximize Profitability
MDealership marketing tools powered by behavior prediction technology enable dealers to take this approach one-step further by proactively mapping prospective buyers to their available and incoming inventory. As a result, dealers are empowered to maximize their inventory profitability by reducing the number of days a vehicle sits on the lot.
With competition fierce and rapid digitalization shaping new consumer buying habits, staying ahead of customers has never been more important to the success of your dealership or this strategy. But simply having the vehicle a buyer is looking for in stock is only one piece of the puzzle.
The rapid digitalization of car buying has created a new type of consumer-first era, with evolving consumer demands centered around personalization and ease of use. In fact, industry research finds consumers are more willing to buy from dealerships that offer a modern, customized buying experience, with over half of respondents noting they would purchase new vehicles more often if buying processes were improved.
To meet these new demands, proactive dealerships are leveraging predictive marketing tools to both identify prospective leads predicted to be interested in their available inventory and to deliver personalized messaging that captures a buyer’s attention and sets the stage for an excellent customer experience.
Proactively Promote Customer Loyalty with Predictive Analytics
Easily the most valuable asset in a dealership’s portfolio is their existing customer base. Amid increased competition, it’s critical dealers focus on preventing customer defection by proactively promoting customer loyalty.
With unique access to insights about their customers, dealers can leverage the same previously mentioned predictive marketing tools to automatically search through their CRM and DMS to identify and engage loyalty customers before they start shopping around.
Just like conquest customers, the success of a dealer’s loyalty marketing efforts hinges on their ability to personalize their approach, dependent almost entirely on integrating internal data from sales and service and high-quality external data from sources like IHS Markit, CARFAX, TransUnion and OEMs.
For example, some of our dealer partners use Market EyeQ to track customers on 72-month terms and engage well-qualified auto prospects with 36 months or less left on their current vehicle with personalized and transparent offers. By leveraging dealership tools powered by predictive analytics, our dealer partners report increased retention sales up to 15%.
To navigate challenges in today’s continuously evolving automotive industry, proactive dealers are looking to data to plot their next steps. From identifying and engaging drivers of in-demand pre-owned models to build a profitable inventory, to mapping prospective buyers to the vehicles they have on-hand, predictive analytics empower dealers to maximize their portfolio – and their future success.
Interested in exploring how Market EyeQ can help your dealership overcome inventory challenges and embrace new opportunities in 2021? Contact us for a free demo.