On the sales front, there are plenty of opportunities for a forward-thinking dealership to serve the customer, increase profits and build for the future. One element that can often be overlooked, however, is not how the vehicles are sold, but which vehicles are sold. Having an in-demand inventory makes the job of sales easier and can bring customers into the store with less effort. And, when it comes to acquisition, determining the trade-in value with the customer can make or break a sale. With inventory, GMs and dealers must have a strategy in place to answer three essential questions most customers have.
“Do You Have the Vehicle I Want?”
It has always been challenging to stock a dealership’s inventory with in-demand vehicles because tastes change, the availability of popular models can be inconsistent and local demand can be very different from national trends. Taking into account the access consumers now have to information about inventory — not only locally but on a regional and national level — a dealership can’t afford to have low-demand vehicles on the lot taking up valuable retail space.
Fortunately, the technology now exists where dealers don’t have to rely on guesses or gut feelings for what to carry. Inventory management tools are available to assist with both stocking and pricing in-demand vehicles. These tools use both the dealership’s data and data from the surrounding area to determine the best mix of inventory for a dealership’s unique marketplace. These tools also aid in determining popular trim packages and other features that help sell vehicles more rapidly.
For smaller dealerships, inventory stocking can still be done on a case-by-case basis, but you have to pay close attention to what the marketplace wants. This process is more time consuming and less accurate, so regardless of dealer size, an educated, data-driven process may still be necessary to achieve your goals.
“What Is My Trade-in Worth?”
In many cases, part of the sales process is making the customer an offer on their old vehicle. In earlier times, the manager would make an offer and the customer could either take it or leave it. That process has changed.
Today’s educated consumer has not only researched the vehicle they’re interested in buying but also has an idea of what their trade-in is worth. Through Kelley Blue Book, Edmunds and other online guides, the customer comes in with a number in mind. That number, however, is often flawed without the customer realizing it. If not handled properly that flaw can sink the entire deal.
“People tend to not factor in what possible reconditioning the vehicle needs,” said Jill Howard, director of client services for A2Z Sync, a company that delivers solutions allowing single-login access to automotive sales tools. “These guides put different condition levels on their site, but many customers overlook that. So, that’s where that human element still comes in, for instance, to remind them that they have a big dent here where they accidentally hit that pole.”
When determining the value, a salesperson or manager must walk the line between what’s good for the deal and what’s good for the dealership. “As a dealer,” Howard asked, “what would you pay at auction for the vehicle being traded in?” Many times, a customer will be more receptive to an offer if they have some context.
“How Did You Arrive at That Number?”
The discussion about a trade-in should be part of the conversation much earlier in the negotiation than many salespeople realize. Springing what can be a rude surprise at the end of the process can ruin any rapport built with the customer along the sales process.
One way to do this is to bring the manager — or the person in charge of making the offer — into the process sooner. “One of the common missteps is having managers who hide behind their desks,” Howard said. “They never go out to look at the vehicle or speak to the customer. They simply try to get as much profit out of the vehicle without explaining the number.”
Customers demand transparency in the automotive sales process, and that extends to the trade-in negotiation. In addition, people often have an emotional attachment to their vehicle. When what they might consider an insultingly low number is simply pulled out of the air, it can sour them not only on the deal but the dealership as well.
Being able to show the customer how a price was determined using software that takes into account reconditioning, market value and other information can go a long way toward building trust. With this, what could have been an uncomfortable situation for everyone is now another positive step on the way to making the sale and creating a long-term relationship with that customer.
Once you have a good understanding and process for handling new trends in in-demand vehicles and trade-in negotiations, it’s time to consider other tools and technologies available to better serve your customers. Next, we’ll cover how there should be “No Fear of the Future.”
Register now for our upcoming webinar December 13 at 2pm EST “Success Through Innovation: Tips for Your Dealership” with James Kurtenbach, Marketing Director at Schomp Automotive Group, and Jill Howard, Director of Client Services at A2Z Sync.