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GO PRO: How to Harness the Power of Proactivity and Transform

After years of positive growth, the automotive industry is still adjusting to the current trend of declining consumer demand. What lies ahead may still be uncertain, but savvy dealers understand the need to confront the current sales environment by optimizing operations, increasing customer satisfaction and mining for new revenue streams.

The critical element to achieving those goals? Taking a proactive approach. Today’s most successful dealers aren’t waiting for opportunities to come to them. They are actively hunting down new ways to increase profit and decrease costs to push growth despite the challenging conditions. Read on for a closer look at the power of proactivity and how the approach helps dealerships thrive.

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After years of positive growth, the automotive industry is still adjusting to the current trend of declining consumer demand. What lies ahead may still be uncertain, but savvy dealers understand the need to confront the current sales environment by optimizing operations, increasing customer satisfaction and mining for new revenue streams.

The critical element to achieving those goals? Taking a proactive approach. Today’s most successful dealers aren’t waiting for opportunities to come to them. They are actively hunting down new ways to increase profit and decrease costs to push growth despite the challenging conditions. Read on for a closer look at the power of proactivity and how the approach helps dealerships thrive.

MANAGEMENT

The creation of a proactive environment begins with culture. And the building of that culture has to begin at the top. It is the responsibility of your dealership’s leadership to not only set the tone and provide direction for implementing a new proactive approach, but also to enforce those directives.

A key attribute of a successfully proactive dealership is cross-departmental communication, and the onus is on leadership to open those lines of communication — and make sure they stay open. For example, if you’re asking Sales to set up weekly meetings with Service to talk about opportunities coming in, you need to be sitting at the table in those meetings. Especially at the beginning of a culture shift like this, active participation from leadership is critical to dealership-wide buy-in.

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Another key step in building a proactive culture is critically evaluating your team. Maybe it is time to restructure the role of your business development center to focus on data mining or revamp your Internet lead process. Also, consider the role that your vendors play in your team’s day-to-day functioning. Many CRM providers offer ongoing performance management, which can often help your team stay on track with new processes and goals.

INTEGRATION

Syncing your data and systems across departments is table stakes for creating a dealership that works proactively. It’s much harder to find new opportunities if you have to search five platforms with pieces of your data instead of one platform with all of your data. For example, connecting your inventory-management platform with your CRM gives you the opportunity to stock your lot with vehicles your customers are actively interested in. With the power of this combined data, you can proactively approach customers with what they’re looking for, instead of waiting for them to come to you.

This integration also creates a connected online to in-store experience that is integral to increasing customer satisfaction. According to an IHS Automotive study, the amount of time it takes to complete a vehicle purchase is the most common frustration for car buyers. Integrating your systems can shorten that time by eliminating the
need to reenter data into various platforms, and can create a seamless journey for your customers.

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PRO TIP: Bring your system and teams together to uncover new opportunities.

TRACKING

With the wealth of customer data available in your systems, it’s critical to make sure you are getting the most out of it. If you know where to look, the information collected and stored in your CRM allows you to truly understand today’s car shopper and analyze their behavior, giving you the insight necessary to proactively deliver tailored offers.

Today’s customers spend 60 percent of the car-buying process online, according to Cox Automotive’s 2017 Car Buyer Journey study. And in all that online browsing, customers are giving you a lot of data. With the right tools, your website data can help you identify specific signals that someone is a good candidate for a sale, such as investigating credit options or trade-in values.

Web behavior tracking tools, offered through some CRMs, allow you to see when customers in your database visit your website and what they are browsing. A good tool will even notify you with CRM alerts when specific customers are browsing your site. Today’s most successful dealerships are acting on these behavioral signs from customers instead of waiting for the customer to speak up — or reach out to another dealership.

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PRO TIP: Leverage your data to understand what your customers want before they tell you.

SALES

Diminished consumer demand for new cars means that dealers need to get creative to make sales. Many proactive dealerships are doing this by disrupting the “normal” sales cycle. Instead of waiting for the typical car-buying cycle to end, these dealers are making offers based on less traditional factors such as leases, positive equity and website behavior.

To spur customers to act, these offers have to capture your customers’ attention. Targeted marketing campaigns are a great way to provide these personalized, attention-grabbing offers. Rather than going out to the largest possible set of targets, consider campaigns that zero in on a smaller subset such as new parents, empty nesters or small business owners.

Research from PCG revealed that dealers who create highly customized campaigns — for example, creating six, eight or 10 templates per campaign and targeting 250 customers — see much better results than those who sent a non-tailored campaign to 5,000 customers. The research showed one dealer in New York using this approach achieved a 47 percent leads-to-sales ratio.

PRO TIP: Get personal to circumvent the uncertain sales environment.

SERVICE

The service department is a critical component of the dealership’s overall health. According to NADA, 48.5 percent of today’s average dealership’s gross profit comes from fixed operations. Yet fewer than one in three service visits take place at dealerships in the U.S. There is a lot of opportunity for dealerships to grow their service revenue, and proactive dealers are reengaging customers beyond the initial sale to build loyalty.

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At proactive dealerships, building this service loyalty starts when the customer buys the car. According to the Cox Automotive Maintenance and Repair Study, customers who are introduced to the service department at the time of purchase are 2.3 times more likely to go to that dealer for service than customers who were not introduced to the service department. And 53 percent of customers said that introduction came into play when deciding where to repair their vehicle.

Another critical factor in satisfying customers to build loyalty is meeting customers’ evolving communication preferences — including having the ability to schedule appointments regardless of your hours of operation. Research from Cox Automotive company Xtime shows that 23 percent of online customers schedule their visits outside of the business hours of a dealership, and that those scheduled visits generate an average $54 uplift compared to walk-in customers. So if you don’t have an online scheduling capability, you are likely losing out on business.

Final Takeaways

Regardless of where we are headed with consumer demand, dealers facing tough margins and savvy competitors can’t afford to fall behind. Taking a proactive approach is absolutely critical to ensuring you aren’t just trying to keep the doors open — you’re opening more doors.

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Chase Abbott

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