For auto dealers around the U.S. and the globe, the ongoing chip shortages have resulted in historically low new vehicle inventories, as well as contributed to sky-high auction prices for pre-owned models.
With customer demand unwavering and even increasing, lagging supply has created both new challenges for dealers, as well as new opportunities when it comes to acquiring and selling used vehicles. In March, NADA reported the month’s average retail selling price of pre-owned vehicles by new car dealerships increased by 11% compared to 2020.
In this blog post, we’ll explore 3 ways dealers can capitalize on new inventory acquisition opportunities to make the most of their pre-owned inventory and customer portfolio, including:
Proactively identify pre-owned buyers and drivers
With chip shortages fueling buyer concerns over availability and driving demand for both new and used vehicles, today’s dealers are challenged to acquire in-demand pre-owned models while engaging prospective leads to turn their inventory quickly.
Without the right tools and technology in place, this can seem like a daunting task. But with dealership marketing tools that integrate with data from a dealership’s CRM, DMS and sales platforms, dealers are empowered to simultaneously maximize their pre-owned inventory and existing customer portfolio by automatically identifying and engaging their best prospects.
Tools like Market EyeQ layer insights and information from a dealership’s CRM, DMS and available inventory with high-quality, third-party data to automatically identify prospective buyers before they return to market, as well as automatically map those prospects to the vehicles already available in a dealer’s inventory they are predicted to be interested in. This empowers dealers to both hasten their turn and market their incoming inventory.
To take this one step further, some dealers are using these same tools in the development of healthy, profitable pre-owned inventory by taking a similar approach at identifying and engaging drivers of in-demand makes and models who present prime trade or buy-back opportunities.
Leverage your service drive for inventory acquisition
Amid unprecedented inventory shortages, the service department will continue to be as critical for sales in 2021 as it was in 2020. And with proactive inventory acquisition processes in place, your team will be equipped to drive increased pre-owned profitability right from the service drive.
By leveraging dealership marketing technology that integrates with data from their DMS and CRM, some proactive dealers are actively mining their upcoming service appointments to identify customers driving in-demand makes or models that are also prospective trade opportunities. This includes customers who are out of warranty or over their lease mileage, or those who could benefit from a lower monthly payment.
From here, service-to-sales liaisons or well-connected BDCs leverage these insights to engage prospects before they’re in the service lane – and before they re-enter their buying journey. By leveraging data mining technology like Market EyeQ, dealers can tap into insights beyond just equity to take this process even further.
Using these insights to tailor personalized messaging and specific offers, dealers can set the stage for a superior buy-back or trade-in experience, opening the door to a potential sale, building customer loyalty and fueling future service visits.
Simplify the sales process
Even in today’s increasingly digital and hyper competitive market, focusing on the dealership experience is more important than ever. According to IHS Markit, dealer loyalty in the U.S. is at a five-year low in 2021 at 35.8%, after peaking in 2018 at 37.4%, but vehicle make loyalty remains quite stable.
As inventory shortages further threaten customer loyalty and intensify intra-brand competition, it’s critical dealers focus on simplifying the customer journey to empower dealers to retain their audience, conquest buyers from the competition and improve the overall efficiency of their sales process.
This pre-owned inventory strategy also empowers dealers to combat the appeal of convenience offered by online-only dealerships by getting ahead of buyers with a personalized and personable approach. A 2020 Roaster study found 89% of online shoppers interacted with dealer staff via live chats during their transaction and 80% of those who purchased entirely online were still guided in some way during vehicle configuration, credit inquiries, etc.
By leveraging advanced data mining that integrates with data from a dealership’s website, CRM, DMS and high-quality third-party data, dealers can automatically identify and engage prospective buyers with personalized messaging. This includes tailored offers or incentives designed to set the stage for a seamless customer experience that builds loyalty and sets the stage for a potential trade opportunity.
From engaging seemingly forgotten corners of the dealership to leveraging your available data and connecting your team better, there are plenty of pre-owned inventory best practices for your team to make the most out of your pre-owned inventory selection.
Interested in learning how Market EyeQ can assist your dealership in maximizing its available pre-owned inventory? Contact us for a free demo.