Attention all auto dealers: If you are looking to increase your bottom line in 2017 by saving your way into a profit…stop offering test drives. The costs associated with customer’s test driving your inventory can be astronomical, from the fuel to the insurance.
Understanding that a test drive is the No. 1 way to create psychological ownership with your customer when they are in your dealership, it in fact costs money that you can save.
For the franchise dealers, with regards to your new inventory (which I am sure that your OEM gives you money to fill with fuel) I would encourage you to test drive those vehicles until that fuel is used up and then just park it on the back lot. After all, you have a lot of inventory, so when you have a customer who is interested in a specific vehicle, just have them test drive the next closest model choice that has the most gas in it. Your sales staff is good; they should be able to sell the differences without having the customer actually “test drive it.”
Independent dealers and those franchised used car departments who are still insistent on offering test drives, have the previous owner trade it in with a full tank of gas. It is the same business model that car rental places employ. Sales may go down initially but you will save a lot of money and you will be able to offer the next customer an almost full tank of gas with purchase.
If you think that my above rationale is ridiculous, you would be right — it is. Keep test driving your inventory.
When it comes to the cost of implementing inventory and value proposition videos — the No. 1 way to create psychological ownership with your customer when they are on your Website, your “virtual dealership” — it should be viewed no differently than you do the cost of fuel for a test drive.
Technological advances have made implementing video on your Website ridiculously inexpensive. Whether you have an in-house process when it comes to merchandizing your inventory or you utilize the expertise of a lot service, adding video with either in most cases is less than what it costs your dealership to provide coffee in your waiting room on a monthly basis. Yes, it costs less than coffee —now that is ridiculous.
Wondering where to start? Here is a proven strategy:
- Automatic inventory videos — The VDP is where your customers start — you should, too. Talk to your Website provider, your inventory provider or your lot service provider about implementing automatic inventory videos that can be distributed to all of your advertising touchpoints. This is a first step, because automatic inventory videos deliver more information and emotion than what pictures and descriptions can alone. Automatic inventory videos don’t add any layers of sales processes within your dealership.
- Full-motion inventory videos — Again, speak with your providers about implementing full-motion inventory videos. This is the “money” video. Full-motion walk around videos have high engagement and are where customers get the most emotionally attached to what you have to offer. If you are not using the expertise of a lot service, a couple simple steps may be needed to implement within your dealership. Even with the added processes, the return on investment is huge and puts you ahead of the curve.
- Value Proposition Videos — Now that you have full-motion videos under your belt with relation to process implementation (or you are a high-volume dealer with no time for additional processes and are sticking with automatic inventory videos), it is the perfect time to build trust with the customer and why they should buy from you with “why buy,” “dealer introduction videos” and “testimonials.” These should be displayed in the most conspicuous spot — your VDP. Again, it’s where your customer starts, so you should, as well. These can be created in-house or you can employ a video production company. Speak with your providers as to the best and most visible way to get these displayed on your VDP in relation to your inventory.
- Video e-Mail — You now have great content already generated in your video library to incorporate into your lead follow-up process and marketing campaign e-mails. Video e-mail has extremely high engagement and is very rewarding. But, if it is a starting point with your video strategy, it can be a very process-oriented endeavor. Remember, it is extremely rare that your customer will put in a lead prior to visiting your VDP. If you don’t get them to take enough mental ownership of what you have to sell or why they should buy from you, they may just move on without inquiring at all. The same providers that were able to facilitate your video needs earlier should be able to provide you with a video e-mail platform. That platform should incorporate all of your videos — both your inventory videos and value proposition videos. This makes your success with video e-mail much more attainable with less process to incorporate.
Again, having a customer take a test drive is the most opportune time for the customer to take psychological ownership of the vehicle you have to offer. Keep doing them. According to a November 2015 study by Google, 69 percent of customers rely on video to influence their purchasing decision — having great video content on your Website and your VDP is imperative. Implementing a video strategy results in more walk-ins, more phone calls, more test drives and more sales.
If you truly believe your dealership is saving money by not implementing a video strategy, then be fully committed to saving money — stop doing test drives.