Despite media chatter about the viability of dealerships and emerging direct-to-consumer competitors, car buyers still want to visit dealerships. But they want to visit fewer of them.
The latest Ease of Purchase Scorecard from service provider CDK found nearly eight in ten, 76 percent, of buyers purchased after visiting, at most, two dealerships. Thirty-one percent shopped and purchased at only one dealership.
The stakes are high when a buyer steps onto your showroom floor. The sale is yours to win or lose. This is arguably more difficult today when many dealerships sales department are staffed with inexperienced employees who know how to take orders but fumble when it comes to selling.
In addition, many brand promises and complimentary services and products that enticed customers to buy from you went out the window over the past few years. After all, why give away stuff when multiple people were vying to buy one car?
Tackle these and other concerns and you will win over shoppers coming through your doors. Focus efforts on the following.
Sales Manager Skills
The concept of the sales manager greeting and engaging early with every customer has been around for decades. Yet over the past few years it’s been put on the back burner. Chip-driven inventory shortages and the ability for salespeople to say “take it or leave it” because there was another customer right behind them eager to pay full price, meant many talented sales managers became comfortable in their chairs. It’s time to hone early engagement skills again.
As the market shifts, remember the value of talking to customers and the standard concept that managers trigger deals. Focus on greeting every customer and helping sales staff where needed. For managers already executing the in-store piece, the early manager introduction to engaged online shoppers is the next step in increasing the number of transitions from sofa to showroom.
Sales Staff Skills
The heady days of taking vehicle orders are behind us, but many sales people who hit showroom floors right before or during the pandemic don’t know any other way. Evaluate if your most recent hires have the skills necessary, and if not, what is the learning curve? It may be as simple as having sales shadow a senior employee, or you may need more intensive help via interactive training platforms that offer micro-learning modules and even gamification to keep staff engaged while they learn.
Often you don’t know what skills are missing until you see sales interactions for yourself. For example, I recently observed a sales manager ask a sales associate to butterfly a customer’s vehicle of interest only to be met with a blank stare. These basic terms and skills need to be a priority again.
Sales staff need proper training on digital retail tools—whether they are used online only or in-store as deal generators. The fact is that shoppers are likely using your tools online, but the majority will never submit a lead because they do not want to be bombarded with calls and emails. There needs to be a solid process in place for sales staff to determine if and what has already been done online, and if the customer has already spoken to someone at the dealership. This will save time in the store, which is the number one goal of most customers.
Finally, it’s time to bring back the sales to service connection. For years it’s been a best practice to have sales introduce customers to a service manager and help them schedule that first appointment. Yet, it rarely gets done. This simple step can be the first in creating customers for life.
Financing Skills
When vehicles were selling above MSRP all day long, dealers were making money on the front-end hand over fist. As we enter a competitive market again, back-end F&I sales regain the top spot when it comes to profitability.
F&I managers are some of the most experienced employees at most dealerships so skills may not be an issue. However, a review of the goals of F&I may be in order—especially if you want to drive business to your service department.
Finance and insurance can be a critical linchpin in connecting buyers back to your dealership for service and future sales – if you incentivize the right products. Products like prepaid maintenance, for example, are profitable upfront but the long-term profit impact for your service department far surpasses that upfront number.
Consider rethinking pay plans to incentivize managers to think long-term instead of pushing GAP or appearance products which earn good commissions but do virtually nothing to bring customers back.
Brand Promises
As mentioned earlier, clearly defined brand promises and value propositions weren’t needed the past few years. Giving away free 90-day warranties or pre-paid maintenance didn’t make sense when customers were clamoring to buy every vehicle available.
Now that lots are full of vehicles again it’s time to put complimentary services and products back into deals. This will differentiate your brand and improve the experience for customers walking through your doors. It will also help increase customer loyalty and service business down the road.
With consumers visiting fewer dealerships, a consumer on your showroom floor is a sale that’s yours to win or lose. When you focus on shoring up skills across departments and living up to your brand promises, you will close more deals and create relationships that lead to more service revenue and repeat sales.
