As the market for vehicles continues to shift and evolve, we’ve been talking with dealers a lot about how to maintain profitability despite shrinking margins and decreased demand. We’ve heard about many different approaches to sustaining success from many different dealerships, but one common thread has emerged: proactivity.
One of the best ways to ensure your dealership continues to capture business is by anticipating customer needs – not waiting on customers to make the first move. Dealership software platforms are a treasure trove of data. But many dealers aren’t sure how to harness the powerful insights at their fingertips – and ultimately drive sales and retention.
Today’s most successful dealers are proactively diving into their data and taking action based on the insights they uncover. With the help of tools like Connect CRM, website behavior trackers like VinLens, and integrations like Connect CRM and Xtime, you can identify, read and act upon these three key signs your customers are ready to buy.
1. Equity standing
Equity standing can be one of the best, and most straightforward signs your customer is ready to buy. If a customer has been making payments on the same vehicle for several years and is in positive equity, you may be able to get them into a newer vehicle without increasing their payments.
Your customers may not even realize they are in positive equity, so a smart step is to shoot them an offer to let them know. (You owe it to your customer to let them know. My dad taught me that on day one.) Don’t forget to keep rebates in mind when evaluating equity. Since rebates are always changing, you never know when it might be a customer’s lucky day and $3,000 negative equity turns into $1,000 positive with a rebate.
Many CRMs compile reports of customers in positive equity, and some can even alert you when those customers are coming into the dealership for service. Working with your software provider to make sure these types of reports and alerts are set up is a great first step in making your dealership more proactive.
2. Service activity and history
It’s no secret that fixed ops play a key role in a dealership’s profitability. According to NADA, fixed ops gross profits contribute nearly half of a dealership’s gross profit on average. Yet many dealers are still falling short on capturing service business. According to Cox Automotive’s Maintenance and Repair Study, only 30 percent of all service visits take place at a dealership, meaning there’s a huge opportunity for dealerships to build their service revenue stream.
Service activity can be a powerful tool in building that service revenue stream, but it can also can be a great signal that a customer is ready to buy. Is a customer bringing in an older vehicle for an expensive repair? Establish a process to remind salespeople of inbound service customers, and proactively meet those service customers in the service drive with an offer for a new vehicle. Learning to read these service signals will help you make more sales and improve retention in the process.
3. Website Activity
Today's customers spend 60 percent of the car-buying process online, according to Cox Automotive's 2017 Car Buyer Journey study. As customers shop online, they are leaving behind a lot of data that can help you proactively make offers based on their real-time browsing behavior.
Integrate a web behavior tracking tool like VinLens in your CRM to see when customers in your database visit your website and what they are browsing. A good tool will notify you with CRM alerts when specific customers are browsing your site, so you can follow up right away – and never miss another opportunity.
A version of this post originally appeared on Driving Sales.
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