Estimated reading time: 6 minutes
From sitting in my highchair watching my dad prepare for Honda’s National Walkaround competitions to being called “Parking Lot Princess” taking lot ups in rain and snow in Northeast Tennessee, to missing hundreds of dinners and holidays tied up in the finance box closing midnight deals, to now working with thousands of Autotrader dealers, I’ve been a “car-business person” my entire life.
Today, as I lead Sales Analytics under the Operations umbrella for our dealers at Autotrader, my goal is to help you reach your goals, even in tough times. So, what’s our goal as “car-business people”? Sell more cars, make more money and create more loyal, lifetime customers. COVID-19 hasn’t changed that, but it has made things incredibly tough. It has stretched us thinner than ever in so many areas – time, money, inventory, staff . . . Instead of wearing five hats, you now wear 10, and it feels harder and harder to prioritize what’s important.
Identifying your dealership’s top priorities when time and resources are scarce
Based on collective data, experience and many recent conversations with dealers, my advice is this: Make a laundry list of everything you’re spending time and energy on, and then cut that list in half. Then cut it in half again. The goal is to whittle the list down to the three most important items you think your store should focus on.
Those top priorities are often quite similar among the dealers I talk to. They all come down to selling more cars, making more money and creating lifetime customers. Here are my three key areas to stay laser-focused on during these times of endless to-do lists, as well as some thoughts on the data that can help optimize your effectiveness, track your success and identify opportunities for improvement.
1. To sell more cars, maximize your sales pipeline by connecting with shoppers in all stages of the funnel.
Remember, it takes one shopper – the right one at the right time – to sell a car. Connecting with and converting that shopper to a sale requires the right exposure, strong vehicle merchandising, credibility and responsiveness, and an understanding of your buyer’s needs throughout the buying cycle.
Make your store the go-to dealership they think of when they’re ready to buy.
Make sure your inventory and dealership catch car shoppers’ attention when they’re searching for the perfect fit on third-party sites. Bonus: Besides winning you customers, what happens on your virtual lot is the most direct indicator of what is getting ready to happen on your physical lot. Use real time data as part of your daily operating control to direct where you spend your time and how you manage your inventory.
Be ready to connect with consumers when and where they want – through chat and text, with virtual assistants or managed services and by offering digital retailing products and/or home delivery services. You can’t physically do it all, so don’t be scared to use technology and tools to make your processes more efficient.
Closing the deal
Even though you and your staff are tired and thinly spread, remember that consumers buy because they (#1) like you, (#2) trust you, (#3) like your services and (#4) like your product, in that order. Don’t let them feel your stress. Customer service is more important than it has ever been, and it’s key to getting the deal done.
2. To make more money, understand your dollars to yield greater profits and more efficient spend.
This must start with a mindset shift from only looking at the usual KPIs (leads, calls, emails, VPDs, SRPs, etc.), to identifying new KPIs that demonstrate efficiency, effectiveness, and ROI to inform sound business decisions that serve you and your buyers.
We all know that a lot of lead sources are producing less volume than they did a year ago. But what about lead quality? Analyze the leads you are getting and measure the time you are spending working leads that aren’t resulting in sales. Break them down by vehicle, take out duplicates and bads, then calculate your true closing ratios by sourcing every sale properly.
True lead value
Tear apart your old cost per total lead model and calculate it again with leads where you make two-way contact with the consumer. In everything we do right now, think “Not more, better”… And know what “better” means to you – better efficiency, better profitability, better quality.
TIP: For a deep dive into measuring lead quality and getting the most from your leads, check out our recent whitepaper, Lead Quality and Why It Matters More Now than Ever
Know your cost per sale and take immediate steps to increase your online finance penetration and products per deal, focusing on retention for profit in fixed operations and maximization of lifetime value of the customer. Identify opportunities to optimize with online tools that deliver buyers to you that yield the highest PVR (per vehicle retailed) profitability.
3. To create lifetime customers, prioritize working past leads, repeat and referral business.
Know the value of repeat and referral business from both variable and fixed ops. Do your KPIs include goals for repeat business? What does your revenue data reveal about the lifetime value of your customers?
Maximize your fixed-ops opportunities online and offline. Economic uncertainty will cause some consumers to hold onto their vehicles for longer than usual. Maintaining a healthy service relationship means fixed ops revenue now and possible sales revenue later.
Service to sales
Work your service drive for trade-in and sales opportunities. You’ve got a huge leg up with your repeat service customers. They already like doing business with you, so be sure to foster that relationship and open the door to your next sales through service conversations and marketing channels. Resurface past leads.
Your most loyal customers can be your best sales tool. Find ways to make it easy and profitable to refer a friend to your dealership.
Plan your work, and work your plan.
Whether they match up exactly with my suggestions or they’re a little different, creating your list of must-do items is the first step. Every penny and every minute matter now more than ever before, but once you make that list, you’ll be ready to plan your work and work your plan. And we’re here to help. In a few weeks, I’ll be back to discuss using data to optimize your processes and connect the dots from online to offline with quality consumer interactions.