Today’s leading dealers are keeping a close eye on the Federal Reserve’s interest rate hikes and what it means for the auto market. In September alone, the average auto loan rate increased about two percentage points.
This indicates that expensive new cars are out of reach for many consumers. And lenders are wary of taking on subprime loans. The good news is that continuing limited vehicle production, consumer demand for new vehicles hasn’t declined. This means you can still post strong revenue and crush sales goals. But you can’t use the same old strategies such as buying more leads.
Let’s explore what leading dealers do to find quality buyers, engage with the right messages and choose the right communication channels to keep sales and profits up during this tumultuous time.
Take equity mining to the next level
Equity mining is the most well-known tactic for finding new opportunities from sales and service customers. This is especially helpful if you’re don’t secure the volume of high-quality leads you’d like from your website and marketing efforts. Your CRM should make it easy to create targeted marketing and sales lists based on customer profiles.
Top dealers dig deeper using equity mining tools equipped with propensity-to-buy intelligence that delivers a predictive score of high, medium or low to indicate the likelihood a customer will purchase a vehicle. Using artificial intelligence and business insights such as lifetime sales transactions, days remaining on lease or number of payments made, propensity to buy helps narrow sales and marketing efforts to the best prospects.
The same technology can be used to predict what type of vehicle should be recommended to a customer – instead of simply suggesting a newer version of the current vehicle. This ties in nicely with the industrywide push toward a more consultative sales experience for customers. Armed with this information, a salesperson becomes a trusted vehicle expert who can speak intelligently about best-fit vehicles.
Don’t shy away from ordering and in-transit messaging.
During the pandemic, lack of inventory affected dealership engagement behavior. A 2021 mystery-shopper study of nearly 4,000 dealer groups of a particular OEM that together account for 90% of this OEM’s sales in all major markets, found online lead responses shifted dramatically during the pandemic.
For example, in May 2021, 25% of sales staff addressed vehicle availability in online lead response. Only 6% did last September. Also in May 2021, 31% of sales staff invited customers into the dealership. That number plunged to 2% last September.
Why? Staff were afraid to answer inventory questions and unprepared to sell via the ordering process that is today’s reality.
Top dealers don’t shy away from talking about inventory shortages. They explain how customers can order a custom-built vehicle, and/or how vehicles are in transit every day, and there is a waiting list process.
Lean on the customizable templates in your CRM to craft lead response messages that emphasize all the avenues to purchasing a vehicle. The approach of model-year turnover makes this an opportune time to reach out to quality prospects and explain all the options available to get them into a new vehicle.
Fine-tune CRM communication cadences and channels.
This is not the time to set CRM communication triggers and forget them. A customer interested in in-transit vehicles may need double the communication of a prospect who won’t buy now. Account for each individual customer’s needs and set reminders accordingly.
Top dealers also rely on A/B testing. Create different messages using different channels to see what gets results. Sales need templates that can be personalized for email, text and chat.
The takeaway is that interest rates are rising, but dealers winning in this current market are not using the same old cookie-cutter engagement tactics to find buyers. They’re not spending money on high-funnel leads. They’re spending time and money where it counts – on technology and communications to find and speak to high-quality buyers with a propensity to buy.
Michael Biasco (pictured, above left) is a senior product marketer at Elead/CDK Global with more than nine years of sales, marketing and operations experience in retail automotive.
