Fall is finally here. And just like you can’t escape the cooler weather and shorter days, dealers can’t escape the start of the sell-down season.
The goal may be to clear out ’16 inventory and make room for ’17 models, but the sell-down season is as much an opportunity to start relationships as it is to make sales.
Long-term customer relationships lead to more F&I opportunities, service revenue and repeat sales. Retaining a customer costs 10 times less than winning a new one, so nurturing relationships with your customers makes good business sense. And with so many customers visiting dealerships to take advantage of year-end deals, there are more opportunities than ever.
Here’s how to nurture a successful relationship with sell-down season customers before, during and after the sale.
Step 1: The Match
All strong relationships are built on mutual understanding. If customers don’t believe a dealer knows what they need and is invested in helping them get it, there’s no reason for them to stay loyal. But magic happens when offerings align with customer needs.
First things first: To meet customers’ needs, stock what they want. Local market intelligence tells which inventory segments are most in demand. Adjust stocking tactics accordingly.
Of course, inventory is only half the battle. Customers are price-conscious, too. Check days’ supply regularly during sell-down season and adjust prices accordingly.
Once dealers have the right cars at the right price, they should optimize listings to reflect that. Today’s automotive customers spend 59% of the buying process online.
That makes listings the first place they’ll interact with a dealer. What customers see in listings should be what they see on the actual lot. Listings can boost trust in other ways, too. For example, Kelley Blue Book’s Instant Cash Offer can provide additional credibility by verifying your trade-in offers against a third-party source.
Step 2: The Connection
Compelling listings might bring customers into a dealership, but that’s not enough to keep them coming back. Customers can buy a car anywhere. What they can’t get anywhere is a sense of connection. If a dealer can become a knowledgeable partner committed to helping customers get what they want for a fair price, it will set the store apart, encourage retention and spur referrals.
A major part of this connection is consistency. Buying a car is a big decision, and customers want to feel supported throughout the process. That’s why providing a single point of contact is so important. The personal touch of interacting with one dedicated salesperson makes customers feel valued and builds their trust in your dealership.
This trust is critical, even more critical than price. Customers are focused on how to get the best value, not necessarily the cheapest price.
Only 20% of customers expect to buy a car at the lowest available price, while 80% are satisfied with fair pricing. In other words, if customers trust pricing and see value, there’s no need to sacrifice margins.
Online validation tools show customers how prices compare to industry standards, providing extra credibility and transparency.
Fifty-three percent of customers say they’d purchase more often if the car-buying process were improved.
As for how to improve the experience, most customers agree on one critical factor: convenience. Studies indicate 44% are dissatisfied with the length of the car-buying process and only 22% say their buying process was never frustrating.
Customers are looking for the dealer who best fits their lifestyle.
Step 3: The Relationship
Once a dealer wins over customers and closes the sale, relationship-building work isn’t done. Yes, the sale is over, but customers will need to visit a dealership again before long.
If a dealer provides an outstanding experience throughout the buying process, it builds a strong foundation for future business. Loyal car buyers are more likely to visit a dealership for service, a key revenue driver.
Trust and transparency can drive major benefits to the F&I department, too. When customers are trustful and see transparency, F&I sales rise by an average of 31% per contract.
In the longer term, an existing relationship with a customer gives a leg up when it’s time for their next purchase, with 73% of customers willing to drive farther to work with a great salesperson, according to an Autotrader Car Buyer of the Future Study
And although a customer’s next car might be several years out, their friends or family may need a new car sooner – and enthusiastic referrals could win their business.
Fall has always been a fast-paced, high-volume season for dealers, and it can be hard to think further ahead than the next sale. But in reality, every interaction with customers lays the groundwork for long-term customer loyalty and repeat business.
It’s the season for the beginning of a beautiful relationship.
Rob Christman is director of sales and fixed operations at Cox Automotive. He is at [email protected].