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3 ways to strategize for dealership success in 2021

January 8, 2021
Dealership leaders have entered 2021 with many important lessons learned on pivoting and keeping their businesses moving forward despite industry disruption. 
Proactive dealerships stayed ahead of the curve by adapting to their customers’ needs, accommodating new buying behaviors and meeting their customers where they are by embracing new sales models. According to IHS Markit, 65% of dealers now expect an acceleration in the development of online vehicle sales and booking platforms.
However, as growing car-buying trends cement into ongoing consumer buying habits, dealers are challenged to strategize for success for the long haul — with no time (or resources) to waste. 
In recent forecasts, automotive sales are projected to grow 9% year-over-year in 2021, rising from under 75 million in 2020 to almost 82 million.
To embrace these 2021 car sales opportunities, dealers need to ensure their sales team and process are nimble and ready to adapt. In a blog post, AutomotiveMastermind, a software firm that helps dealerships target potential customers, offered three ways for dealerships to embrace auto industry trends and strategize for success in 2021: 
 
• Put the right people in the right roles 
• Refocus your sales and marketing processes on the customer experience
• Deploy an inventory strategy driven by data
 
Right people, right role
In previous years, sales processes — and sales teams — likely were structured differently than they are today. Dealerships and team members that resisted change and digital transformation inside the dealership now can’t afford to ignore growing consumer demand for new buying experiences. 
 
In one recent study, consumers who purchased at the peak of the pandemic and completed their entire transaction at the dealership interacted with 3.8 dealership personnel on average. That number drops to 3.0 for consumers buying partially online and partially at the dealer and to just 2.1 personnel on average for online-only buyers.
With digital platforms automating the process, customers can take a self-serve approach to actions such as negotiating their trade-in, reducing the overall number of staff touchpoints and improving the efficiency of the sales process. 
But the physical dealership experience is an automotive trend that still matters. The same previously mentioned IHS Markit study found 79% of all surveyed consumers test drove their vehicle prior to purchase — 69% of those consumers at the dealership. 
By embracing an omnichannel approach, dealers are empowered to both implement new cost-saving efficiencies and ensure their dealership’s online and offline experiences are seamlessly integrated. But the right team is needed to support the process.  
When hiring new employees, seek out recruits who are digitally proficient, as well as those who are willing and excited to expand their horizons and seek out ways to grow beyond their current experiences.
Don’t forget to inspire and incentivize the team to continue growing their sales skills by participating in ongoing training and education opportunities. With the increasing popularity of virtual events, these previously cost-prohibitive trainings are more accessible than ever. 
 
Refocusing on the customer experience
When consumers are deciding how to buy, whether if that’s online or in-store, convenience is critical. Research finds both online and in-person car buyers ranked convenience as the leading factor when deciding where to buy a vehicle — ahead of any other consideration, including price.
 
Every experience customers have with the dealership online and in-store should reflect the dealership’s internal brand values. With dealerships around the country competing for attention and sales, it’s critical to cut through the noise by delivering the right message at the exact right time.
By leveraging high-quality data and intelligent marketing technology, dealers can identify prospective buyers predicted to begin shopping for a vehicle soon and begin targeted and tailored outreach before the competition.  
 
Commit to inventory strategy driven by data
With so many aspects out of a dealer’s control when it comes to inventory constraints, dealership success in 2021 rides on "controlling what is controllable" starting with utilizing the wealth of data locked away in the CRM and DMS to fuel a data-driven inventory strategy.
With wholesale pre-owned prices performing consistently strong, many dealers are sending cars to auction now more than ever. But with wholesale prices slowing, some dealers are holding onto trade-ins they may not have in the past to help fill their lots.
With retail typically generating less overhead than auction, this approach poses a valuable opportunity for dealers with the right customer and market insights. Before sending vehicles to auction, identify prime retail opportunities by analyzing factors like the vehicle’s maintenance history report to better predict reconditioning costs and see how quickly similar vehicles have sold in the past.  
 
 

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