Add-ons of value keep customers happy, and improve satisfaction scores and lifetime values
Largely because of technological advances, many of which were on display at this month’s NADA Convention, there have never been more opportunities for your dealership to present and sell add-on products to your customers.
Whether in the showroom, on the lot, or even on a mobile device in the comfort of a customer’s family room, you can present and sell add-on products to your customers at any time, in any place, and on any device. This opportunity does not, however, eliminate your responsibility to provide a compliant sales process.
At a time when laws, regulations, and even regulatory agencies appear to be multiplying, here’s a simple best practice to start your dealership down the road to compliance when presenting and selling add-on products to your customers:
Design and practice all of your sales processes to ensure that your customers receive value and are well-informed when making decisions about add-on products.
Cause for concern
In July 2015, as part of a larger operation called Operation Ruse Control, the Federal Trade Commission (FTC) prohibited two auto dealers from “representing that any payment program or add-on product or service will save a consumer money, including interest, unless the savings is greater than the amount of fees and costs charged in connection with the program, or any qualifying information related to savings is clearly and conspicuously disclosed.”
In the action, it was determined that two dealerships will have to pay $184,000 to the FTC as part of the settlement. In the complaint corresponding to this action, the FTC alleged that the dealerships “failed to disclose or to disclose adequately to consumers that in many instances: [c]onsumers are charged fees…that amount to hundreds of dollars.”
Informed customers are happy customers
By ensuring that your dealership clearly and conspicuously informs its customers of specific payment information, exact coverages, exclusions, limitations, and other material information related to add-on products, you can mitigate the risk that your dealership failed to adequately disclose product information.
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Dealer Marketing Magazine