2020 has been an unexpectedly challenging year for dealers. The coronavirus continues to affect nearly every facet of our business.
But whatever the timeframe, at some point we will return to a sense of normalcy. Finishing the year strong is key to ensuring your dealership will be able to hit the ground running, no matter what 2021 brings.
The following strategies will help you navigate changing market conditions and set your dealership up for success, not just in the immediate future but for years to come.
Remain alert and nimble. The irony of the pandemic is that it’s actually been good for most stores from a profitability standpoint.
High vehicle demand and low inventory puts dealers in a power position. In this market, the window sticker is king and profit margins are strong. To add to that, marketing is also on the back burner. Many dealers have scaled back marketing budgets to as little as 15 percent of normal spend. This all equates to a very profitable semester.
However, stores are not bulletproof and the tide rises all boats. Coronavirus factors will eventually fade away and complacent dealers will have a rude awakening. To stay ahead of the curve, remain alert to changing market conditions. Create practical contingency plans so you can act quickly when used vehicle supply, new vehicle allocations and competitive marketing factors return to pre-pandemic levels.
Re-think holiday promotions. Traditionally, now is the time to create and push out tried and true holiday promotions. This year is a bit different. Customers are primarily concerned about health and safety.
Focus on value branding messaging, not a hard sell of service. Make use of multi-channel marketing tools integrated with your CRM to educate customers about how their safety is top of mind at your dealership. Explain the cleaning procedures at your store and elaborate on your touch-less sales and service options.
Talk about safety, but still encourage customers to come in. Messaging example:
Don’t put your family, your vehicle or your re-sale value at risk. We have taken all the necessary steps, including touch-less options, to keep you safe while still getting the quality vehicle service you need and deserve.
Develop a hybrid sales model. During the pandemic we’ve seen consumers use digital retailing tools at unprecedented levels. What’s interesting is that online closing rates don’t correspond to lead volume.
Turns out, the majority of customers still want to come into the dealership to finish the buying process. Marry an alternative shopping experience with the traditional buying route and you have a new hybrid sales model that is likely here to stay.
So, how do you establish a hybrid sales model? First, identify the need. Are your customers demonstrating that they want a hybrid approach? Second, identify what you are currently doing to support this need. Third, assess if you have the right people with the right training and the right tools to meet this need. If not, hire the people and invest in the tools. Finally, determine what you need to do to ensure your customers know that you offer this hybrid approach.
Traditionally, dealers want to have one process that is followed by every sales associate every time. The truth is, the future must be more flexible than that. Create a fully digital process, an in-store experience and a hybrid approach. Communicate that you have options and customers will be more receptive to doing business with you.
Be open to new employee roles. Consumers who research vehicles online don’t want a hard sell when they eventually reach out to your dealership. They just want their questions answered by an expert. This change in customer shopping behavior is beginning to be reflected in the dealership.
We’re seeing new employee roles like sales consultants, product specialists and customer experience consultants. These employees engage with customers throughout the process in the way the customer prefers, whether that’s online, on the phone, in person or some combination of the three.
It’s a controversial topic, but the model of one employee handling a deal from initial contact through the F&I paperwork is picking up speed in dealerships. This may be the wave of the future as customers prefer working with only one person vs. being handed off between employees and dealerships can scale down staff to cut costs.
Prioritize employee training. You can never spend too much on training, especially as staff take on new roles. Use training as a way to evaluate your team in light of the changing market. Assess who can adapt to new processes and who struggles with change. To move your dealership forward, you have to have the right team.
Training is a proven investment that will strengthen your business. However, some dealers complain about spending money on training only to have employees leave a few months later. This is an excellent opportunity to honestly assess if you’re offering an exceptional work environment along with competitive pay.
Make sure you ask your vendors if they offer free digital or on-site training. Most do, and it would benefit you to take advantage of it. The key is to hold your staff accountable to attending and implementing what they learn. Another training tip is that the success of the training is far greater when the managers take the training with the salespeople. It’s everyone’s job in the dealership to be professionals!
Invest in the right tools. Digital retailing is a hot topic that’s here to stay. It’s smart to invest now in your digital showroom. Other touch-less technologies may also persist long term. One the service side, it’s worth your time to investigate solutions that keep customers safe and speed up the process, like online appointment scheduling and payments via text.
A robust CRM is integral to the success of varied sales models. It must be able to support different processes (digital, touch-less, in-store and hybrid), integrate with your systems seamlessly and automatically arrange customers into an appropriate status. This ensures any employee who interacts with the customer can see the full customer journey, history and preferences so they can interact with them in a personal, customized way.
2020 continues to be a wild and crazy ride and new ways of selling and servicing vehicles are likely here to stay. The above tips will help you finish the year strong with sales strategies, technology, and training, that will set you up for a prosperous 2021 and beyond.