3 Ways to Rev Up Revenue This Tax Season

By David Metter

April offers a month of renewed optimism for car dealers everywhere as spring comes into fruition and pockets become heavier with a little cash back from Uncle Sam. Tax refund season has arrived, and with it, infinite profit opportunities for both vehicle sales and your fixed operations. I fondly remember April 15th back in my car-selling days as the “real” beginning of the month. 

With that in mind, the following have the potential to be the three most lucrative areas to focus your strategy on during this season of budding opportunity:

1. Increase Show Rates. Okay, this is obvious - but here’s how. We all know the probability of closing a deal skyrockets when a customer is physically in front of you in your showroom. The challenge is getting them there. This is where lead scoring comes into play. If you had the ability to instantly score leads based on their level of buying intent wouldn’t that make the time you spend chasing leads drastically more efficient? Wouldn’t you then know which leads to focus your attention on first and foremost? I recommend implementing technology that has the ability to score all your site, mobile, and third party leads simultaneously and in real-time, so that you know where to focus your efforts.

One way to increase your odds of getting buyers in the showroom is to offer an incentive just for coming in for a test drive, or for a vehicle inspection if their car is a potentially desirable trade-in. The higher the lead score, the more you should offer in exchange to facilitate heavier foot traffic, both on your showroom floor and in your service drive.  

DealerRefresh just published an article advising dealers to have their sales staff “put the phone down!” Customers who call your store are not looking to be sold. In fact, they are already sold on which vehicle they want down to the year, make, model, and even and trim level. Therefore, all calls should be managed by your BDC, or your appointment setters as the one and only goal should be setting the appointment to get them in the door.

2. Reclaim Your Fixed Ops Revenue. The service and parts department of a dealership is easily the revenue engine with the most powerful horsepower. The potential for profit opportunities is greater than ever before in a market infested with disloyal service goers. According to DME Automotive, service center loyalty is remarkably low. “Fewer than 1 in 4 drivers are loyal to their service center type, leaving 88.2B up for grabs.” Yes, you read that right. Eighty-eight BILLION. That is how much money is at stake in the market for service and parts. So, who’s going to claim it?

Cars.com agrees and points out, “We in the industry know that dealerships provide fair, competitive prices on quality service, but service shoppers don’t because we aren’t telling them, and it’s squeezing dealership profitability.” National repair chains take business from dealerships either because their digital marketing is more effective, or they offer a smoother digital experience – or both. A better experience includes superior visibility and more transparent pricing models. “All things that are within a dealership’s power to control, improve upon and use to influence service customers,” says Cars.com.           

3. Deploy a Millennial Marketing Strategy. As you’ve probably heard, the Millennial market of vehicle buyers is rapidly accelerating – and it covers a wider age group than you may realize, spanning the ages of 18-34 years old. The differentiating factor in this generation is that the dealership experience is rated much more heavily than the actual price of a car. According to a recent DrivingSales study, “While finding the right vehicle at the right price is important to everyone, our study shows that most younger consumers want a positive customer experience at the dealership and are willing to pay a little more to ensure they get it.”

Edmunds.com also offers insight as to what the mobile experience in particular looks like for Millennials, reporting that 60% of Millennial visitors come through their mobile site. These shoppers are most active during evenings and weekends when they are out and about, implying they’re using their phones while on the dealer lot.

Tips for Appealing to Millennials:

·      Mobile Focused Ads

·      Fluidity of Setting Appointments

·      Up Front Pricing

Time and convenience are perhaps the greatest hurdles to overcome when competing for millennial attention, with price following closely in third place. People don’t have time to sit and wait. Often, they are willing to pay slightly more for a faster, easier experience. Wouldn’t you? Quite frankly, time is money.

There is no time to waste. Spring has sprung, and there are billions of dollars to be claimed!  

8 Things Dealers Can Do To Increase Their Show Rates

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When handling Internet leads, the lack of response by customers, the appointments that don’t show and the unrealistic expectations often frustrate internet managers and dealers. Show and closing rates in the low to mid-teens is not uncommon, compared to the total number of leads received.

I thought I would share some best practices from my observations working both in and with dealerships, that can be used to increase the number of customers contacted that actually visit the dealership.

1.    Respond promptly – One of the most common setups in Internet departments is to have Internet sales managers (ISM) also serve in sales positions. A typical pay plan will see an ISM compensated by sales commissions, so that is where there focus will be. Therefore, when a customer comes in for an appointment Internet leads get ignored until the ISM is done with their customer. Which, in the event of a sale, could mean that the leads coming into the CRM are ignored for hours. A quick lead response exponentially increases the chance of contacting and further interesting the customer.

2.    Provide Information – ISMs typically use templates to contact customers once a lead is received, which usually contain information about the dealership and its value proposition, along with an invitation to visit. However, far too often the first e-mail fails to contain the one thing that the customer is expecting – vehicle pricing. It’s important to consider the source of the lead when responding. In most cases, the conversion occurred because the customer was prompted to fill out a form to get the price. If you fail to give the price, customers can perceive your dealership as unhelpful and move on to your competition.

3.    Be agreeable – We all know that some customers tend to have unrealistic expectations when requesting pricing or payment information. It’s not uncommon to find ISMs engaging the customers with reasons NOT to buy. For example, a lead comes in with a customer wanting an unrealistic payment or price. Rather than inviting the customer in to work numbers, the ISM will explain that the requested price or payment isn’t possible. Always remember that sales are a numbers game. With the proper deal structure, a payment can be as low as any customer wants it.

4.    Be consultative – Many times the vehicle that the customer requested pricing for isn’t the one they end up purchasing. Always remember that customers are looking for information and assistance. Failing to provide information puts the salesperson in an adversarial position to the customer. It’s much easier to build rapport and get the customer into the dealership if the customer feels that you are sincerely trying to assist them in finding the right vehicle.

5.    Sell the appointment – When dealing with Internet leads, ISMs will all too often try to sell the car via email or the phone. The key to increasing show rates is to remember that the goal is to get the appointment, NOT to sell the car. Using sales skills and techniques focused on selling the appointment rather than working a deal can help increase appointments set and your show rate.

6.    Go above and beyond – When a customer requests information, always give them more than they asked for. If you are offering vehicle pricing, try including an example payment. If the customer requested information about a new vehicle, include several trim levels in your response. If they are interested in a used vehicle, you may try including some alternate vehicles in your response as well. By providing more information than requested, the customer will understand that you are truly trying to assist them and therefore more likely to choose to do business with you.

7.    Make them feel special/personalize – There’s a reason why many dealers are adopting video in their email responses. If a customer wants information about the condition of a used vehicle, it’s very simple to record a personal walkaround for the customer while mentioning their name. Personalized video responses are valuable for building rapport and help put a face with a name. It’s also much easier than taking 10 pictures of a vehicle and trying to email them to the customer.

8.    Consistent follow up – It’s very easy to understand why ISMs get frustrated trying to contact customers who submitted leads, but are then unresponsive. After days or weeks of emails and phone calls, many salespeople tend to give up on the customer and move on. Keep in mind that chances are the customer is being contacted by other dealers as well. And, those dealers have ISMs who are getting just as frustrated. By not giving up on the customer and continuing to follow up, you could well be the only dealership left doing so. This exponentially increases the chance that the customer responds and ultimately ends up in your showroom.

Regardless of whether your Internet department consists of commission based ISMs, or if it has a full-blown BDC, the right processes, personalized responses and attention paid to detail, rather than simply shooting off boring sterile templates, will show your customers that you are there to help. Consider adopting these techniques into your Internet lead process. I hope that you are able to contact more customers, make more appointments and see more of them show, resulting in more sales.