Use Your CRM to Help Overcome Temporary Disruptions in the Supply Chain
Semiconductor chips are about the size and weight of a small coin. Yet this little mouse has made a big roar throughout the retail automotive industry recently, crippling the production of elephant-sized vehicles and stopping dealership car sales in its track.
Global consulting firm AlixPartners forecasts that supply chain problems will inhibit the production of new vehicles, resulting in automakers building 7.7 million fewer vehicles globally than they would have otherwise.
The impact so far has rattled industry expectations. General Motors reported sales fell a third from a year ago last quarter, and they were off 40% from the same quarter of 2019 before the pandemic roiled the car market. GM CEO Mary Barra said the shortage could cost GM up to $2 billion in lost earnings this year.
With so many supply problems outside of a dealership’s control, what can you do? You can make smarter decisions by utilizing your most powerful decision-making weapon: your CRM.
Don’t Worry, Take Action
Inventory is stuck. Dealer lots are close to empty. And OEM plants are unable to finish their new products. Under such conditions, inventory will continue to sell as soon as it hits the lot, because demand remains high. Understandably, dealers across the country are worried.
Here are five inventory worries and how dealers can turn to their CRM for solutions.
• Worry: New inventory doesn’t exist.
Action: This is an ideal time to dive into your database and uncover prospects for your certified pre-owned vehicle inventory. Find those customers who are looking for a new car but may accept a pre-owned substitute, especially for newer cars still under warranty. Along with a shortage of new cars, used cars are in great demand and commanding higher prices. In all, a used car in 2021 will be about 22% more expensive than it was either in 2020 or 2019. In other words, your used inventory is more profitable than ever. Make it count.
• Worry: Customers are still asking about vehicles that are not available.
Action: The key will be keeping those customers engaged with your dealership until your new inventory arrives. Your CRM can enable you to find other sales opportunities, to help offset your delayed new inventory. Let customers know you have similar vehicles still on your lot. Plus, keep them informed about the expected arrival of your new vehicle inventory. On-going communication will be critical.
• Worry: Trade-ins are as good as gold, but how can I find them?
Action: Identify customers in your database who are in a strong position to trade in their current vehicle for a new one — with little or no increase in payment. Also, check your CRM for vehicle service records for leases to find customers who might be ready to trade in their current vehicle or upgrade to a new lease. Desk deals from your CRM. One way is to structure deals that identify multipayment offers for finance and lease or both side by side.
• Worry: Inventory will become a surplus on the lot after the chips are installed.
Action: You’ll want to make room for the new vehicles, once the OEM releases them to your lot. Adjust your pricing, as needed, to maximize profit on current inventory. Promote deals via your CRM in advance of the new inventory, reminding customers when the new products will arrive. By that time, it is likely the red-hot used vehicle market will have cooled. Be sure you have a strategy in place for refilling your sales pipeline.
• Worry: The supply channel problem is not going away.
Action: Most dealers are in the same supply chain holding pattern. And it’s not just automotive retail that’s suffering from a product shortage. According to business analysts, the commercial pipeline responsible for bringing $1 trillion worth of toys is clogged, with no signs of getting unclogged, heading into the Christmas season. Dealers should create an omnichannel marketing strategy across various touchpoints and create a frictionless sales experience.
We live in worrisome times, to be sure. Even with outside forces making life harder for car dealerships and their customers, there is much dealers can still control. Best of all, it’s right there in their own CRM database.
Singer Bobby McFerrin said, “Don’t Worry, Be Happy.” For today’s dealer, the refrain should be, “Don’t Worry, Be Data Mining.”