Through the end of this year, increasing interest rates and stagnating incentives are expected to shift sales growth into reverse. According to NADA, U.S. sales of new vehicles will decline at least one percent, if not more.
Typically, sales of new and used cars follow the same pattern – if one goes up so does the other, and vice versa. Not this year. Used sales continue to rise, indicating that expensive new cars are out of reach for many.
To take advantage of this trend, dealers are bolstering used car inventory. But finding vehicles can be a challenge, and purchasing vehicles at auctions can be risky and expensive.
Fortunately, the data you need to find the best used vehicles for your demographic is already in your CRM. With the help of an equity mining tool, you can identify owners in an equity position and provide incentives for them to trade in their vehicles. When combined with a strong BDC, equity mining is a proven strategy that delivers an ROI of 10 to 1; for every $1,000 spent, you'll get $10,000 back.
This means you can still post strong revenue without having to buy more leads or hire more salespeople.
Sales Equity Mining
Dedicate one salesperson to mining equity sales leads. You can switch up who that person is from week to week, but during that time this is their only job. This person scours the CRM to pinpoint customers in a position of equity, or those coming up on the end of a lease or loan, with vehicles that your dealership needs.
Key here is setting parameters. Don’t chase after vehicles that you sell once every couple of months. You may get the customer into a new lease deal or loan, but you might also be stuck with a vehicle that sits for 60 days.
Also don't call customers who bought a vehicle in the last 12 months. Even if their equity is high, this person just bought from you and you'll be pushing them away instead of drawing them in.
Service Lane Equity Mining
Service equity mining has a higher success rate than sales equity mining because the customers are physically at your dealership. Acquiring inventory from your service drive is a huge win; it’s less risky than going to auction because you know the history of the vehicle, and less expensive because there are no transportation fees. To make it work, all you need is a dedicated equity mining salesperson.
First, review all service appointments for the coming day. Then, mine your CRM to identify customers in a position of equity. Create a written trade-in quote for every vehicle and provide it to your customers in the service drive, or leave the quote in the vehicle. The majority of customers will want to speak with a family member or friend before making decisions. That’s where the BDC comes in.
The BDC Component
The key to converting equity customers is staying in front of them. The advantage of using a call center instead of your sales team is the ability to cover more volume and persistence in follow up. Most salespeople give up after two attempts. However, virtual BDC agents have a more structured process and will place as many as six calls if necessary, at different times of the day, until they reach the customer.
Another reason why an outsourced BDC can be more effective than your sales team is that agents are trained on how to best deliver your message. You can develop scripts, but having your salespeople read from scripts is not advised. BDC agents are trained in how to sound conversational while following call guides, and also to tee-up the customer to follow your defined process when they show up at your dealership.
Are you worried about a soft new vehicle market? Don’t panic. Bolster your pre-owned inventory with a combined equity mining and BDC strategy.