On the other end of a harsh economic recession, it’s become very clear that Americans of today are drastically different from Americans in 2008. People not only tightened their belts over the past four years, they also completely changed their relationship with retail. And, today’s consumers are focused on keeping their savings intact, companies are concerned with fortifying their business to survive future economic challenges. One way companies like Apple and Google achieved this was through providing more value to their customers through enhanced service offerings such as cloud computing, which made it easier for customers to upgrade mobile technology with a free service which made back-ups and syncing easier and more efficient.
So, let’s stop and think about the retail automotive industry for a second.
Whether the economy is good or bad, consumers will still be in the market for a car. However, their needs for said vehicle may change. For example, with the latest recession, we saw the trend of consumers purchasing cars that last longer with better gas mileage. They didn’t stop buying, they just changed what they bought and how often they bought it. They also became less brand-loyal.
The search for more value now extends beyond the car itself to the dealership experience. With so many dealerships to choose from and less brand loyalty, you actually have a greater chance of increasing foot traffic to your store by focusing on your value proposition.
The first step to fortify your value proposition is to go back to the basics:
- Hire Top Performers that consistently deliver results on the sales floor and in the F&I office.
- Place those Top Performers in roles where they will thrive and train them to maximize their strengths.
- Focus on customer service, not just the sale. The best sales people see themselves as advisers. They listen to the customer and address their needs with courtesy and respect.
- Position your dealership as providing value beyond low interest rates. This ties back into customer service and bridges into the F&I office. Consumers are paying more attention to their return on investment just like businesses. Provide products and service that reflect their need to keep their savings intact.
Elementary right? Don’t kid yourself. You might be surprised on how little time gets spent on the basics of right people, right position, right training.
Next, re-evaluate the value you provide in the F&I office. You consistently review how many deals your sales team closes in a month, your product penetration, web traffic, etc. When it comes to analyzing your F&I products, are you taking a strategic approach to analyzing their benefits for your dealership?
Strong F&I products do much more than sell. They:
- differentiate your dealership in the market;
- help build customer relationships;
- are designed with the customer experience in mind; and,
- increase service retention.
When evaluating your mix of F&I products, think beyond product penetration to how your products enhance gross dealership profit by creating a customer experience that fosters lasting relationships and repeat sales.
Lastly, pay attention to your online presence. According to a 2014 DealerTrack study, consumers now visit 1.2 showrooms before making a decision. This represents a paradigm shift in the way today’s consumers shop for a vehicle. Gone are the days of consumers spending their weekends visiting one dealership after another before a final decision is made. Now, the majority of that research is conducted online.
With the majority of customers browsing dealership websites and customer review sites before walking into on average, one showroom, it’s vital that your dealership has a healthy reputation. A good online reputation relies on the active management of customer review sites. While gaining positive reviews is the immediate goal with these sites, the second most important aspect is responding to negative reviews. Negative reviews don’t necessarily have to give dealerships a negative image. By addressing the customer’s concern and taking the conversation offline, dealerships have a great opportunity to turn that negative review into a positive experience. Customers expect to see negative reviews on these sites, but what they pay the most attention to is how the dealership handles them.
Beyond customer review sites, it is also important to optimize your social media assets. Facebook and Twitter have become two of the biggest platforms for consumers to directly interact with companies. Big or small, companies from all industries utilize these sites to inform the public about new products, receive feedback, conduct product promotions, etc. A well-developed social media presence is much more than creating a page and posting content. It involves engaging the audience with content that’s relevant to them, encouraging discussions, and responding to their inquiries or concerns.
Your online presence, F&I product mix, and commitment to customer service each demonstrate a different aspect of how your dealership provides value. Online, you have the chance to provide that excellent customer service to both current and potential customers, further developing lasting relationships and increasing long-term profit. With strategic F&I products, you have better opportunity to maximize unit sales and dealership profitability while offering customers tools to protect their bank account from unforeseen circumstances. Meanwhile, by focusing on the basics of hiring and cultivating top performers, you significantly increase your opportunities to close sales and drive customer retention.