5 Dealership Best Practices for Pre-Owned Vehicle Sales
Used cars have historically been a money-maker for dealerships, but sourcing them involves a good amount of resources: time, energy, and money – not to mention a good amount of guesswork that can render those resources a wasted effort. Plus, the longer cars sit on the lot, the more expensive they become. Dealership best practices provide parameters and define objectives to keep the entire dealership focused on your collective goals.
“The used-vehicle market is expected to regain some normalcy and balance in 2024, however, the effects of lower new-vehicle sales in 2021 and 2022 are anticipated to keep the used supply constrained.” – Cox Automotive
With the demand for certified preowned and preowned vehicles, it’s more important than ever to build a solid inventory of cars that your customers can rely on as being high-quality and a good fit for their needs. This will build customer loyalty as well as your dealership’s reputation.
When it comes to profitable, effective sources for building your preowned inventory, it’s time to take a closer look at your automotive CRM. With advanced tools and processes, your dealer management system can quickly become the best place to find pre-owned cars that sell fast and turn a significant profit. These objectives can be smoothly handled when these five dealership best practices are implemented.
1. A Strategic Approach to Selling Preowned Vehicles
Getting customers on the lot is more than half the battle. Advanced automotive data and equity mining tools allow dealerships to easily turn your DMS into a source for preowned that are in high demand, turn fast, and increase your profit margin.
This is where automotive equity mining, combined with big data like consumer shopping behavior, comes into play. Real-time data includes where your customer is in their car-buying process and their unique car “position,” which could include how far into their retail or lease contract they are, how close their warranty is to expiring, and more.
Staying ahead in the pre-owned vehicle market requires strategic pricing and competitive analysis to boost your dealership’s pre-owned sales and get your entire team on board, aligned in knowledge and processes.
2. Effective Marketing and Digital Presence
Leverage digital marketing channels, such as email campaigns, social media platforms, and targeted advertising, to reach a broader audience of potential buyers, showcase your inventory, and engage with customers. Create compelling content, such as vehicle walk-around videos and testimonials, to highlight the value of your pre-owned vehicles. Create customized templates and campaigns to target the customers you want for a time-saving, strategic, innovative, and personalized approach that shows your customers you are paying attention.
Targeted marketing also works for aged and used inventory you need to move. You can build filters in your equity mining platform and find customers who will benefit from personalized marketing campaigns. Then, you can filter who engaged with the message and determine your next approach.
Marketing campaigns are for more than for new sales. Utilize AutoAlert’s Service Marketing to put tailored messages in front of upcoming service customers about their current service-related life-cycle position. This gets them thinking about their options before arriving on the drive.
3. Communication is Key
Personalized communication makes a difference. It does matter what you say and how you say it. If you can’t speak to that customer’s needs, they will tune you out, diminishing your relevancy.
Meet your customers where they are for a much more strategic approach than waiting and hoping for a customer to come into the store. Leverage the previously noted advanced marketing technology tools to proactively engage potential buyers and deliver the right message at the right time.
Automatic messaging makes this process much less hands-on but equally effective. Instead of your team spending hours filtering your database and crafting messages, your platform can work these tasks in the background. A recommendation engine that can personalize conversations and highlight customers that transact with your dealership or need your attention, like AutoAlert AI Assistants and Wishlist, makes leveraging vehicles simple.
This level of communication, combined with speed and defined processes, gives you a formula for consistently engaging customers.
4. Finding a Buyer
Identifying prospects before they enter the buying journey requires understanding which consumer behaviors typically precede a purchase, such as changes to a person’s career or a growing family.
Finding a buyer is a concept that can be difficult to conceive when you don’t have the data or the tools to provide it. It would only be done sometimes if the information filtered from an equity mining platform had to be performed manually.
Start with the basics, such as transactions and info added to the DMS. Then, add in the marketplace, their lifestyle, possible events, and any objectives that meet the customer criteria. Use all the pieces of data available to tell the complete customer story.
Having the correct data allows you to ask pertinent questions and have meaningful conversations. The system will alert you when your customer engages with you and when it’s time to have that conversation.
Another strength of a data-driven platform is the ability to customize based on your preferences. You can prioritize the customers flagged as key opportunities, receive valuable insights such as who will be in the service drive soon, and plan to begin communication with the right conversations.
The user sets filters for the needed information, and AutoAlert will prioritize the data overnight. The next day, the dashboard is ready for the salesperson to tackle the day, starting with the highest priority.
Build a specific inventory of cars, whether a particular make and/or model or type, like CPO. AlertMiner is a tool that helps you find and source cars quickly. And because AutoAlert opportunities are proven to convert at a higher rate than opportunities sourced other ways, your team will gain confidence with increasing success.
5. Leverage the Service Drive for Vehicle Acquisition
Leveraging the service drive will give you the most significant return when it comes to vehicle acquisition. You can be alerted to who’s coming in for service today and who just entered the service drive. Be ready with the service-to-sales opportunity they will most likely be receptive to (trade keys, upgrade, etc.). Given this knowledge, you have a better chance of sourcing their car.
Access all the available information about your customers and what used inventory your dealership needs to restock with Service Lead Management. Plan the questions to ask that align with their current situation. You can even ask if they plan on upgrading soon and tell them you want to purchase their vehicle.
Statistics show that about 10% of service customers are likely to upgrade or have some transaction with your dealership. You may not close them today, but you will make an impression and let them know they have options.
Having those conversations with customers when they come into the drive is critical. They will be there anyway, and you have nothing to lose.
By implementing these dealership best practices, you can differentiate your pre-owned vehicle sales operations, attract more customers, and drive higher sales volumes and profitability. Stay committed to continuous improvement and adaptability in response to changing market dynamics to maintain your competitive edge in the automotive industry.
AutoAlert provides dealerships with valuable insights to make informed decisions, the ability to optimize operations, generate revenue in the used car market, and improve customer targeting, inventory management, customer retention, and overall business performance.
Dealerships are a prime environment for putting AI into action due to all the data available via the DMS, social media, the internet, etc. The more data, the faster its learning capabilities and goals are reached.
Many dealerships declare that they have AI built into their platforms and solutions. However, AI is so overused and covers such a broad range of capabilities that it becomes challenging to discern the genuine AI-driven nature of every platform.
Powerful AI Needs History & Accuracy
Knowing your customer better than the competition requires powerful Machine Learning and Artificial Intelligence. This does not come overnight. The longer the data has been collected, analyzed, made actionable, and interpreted, and the cycle repeated, the more powerful it is. So, the older the original data, the more knowledgeable and accurate the information it relays.
If you’d like to hear more about dealership best practices for preowned acquisition, visit our webinar: Navigating the Used Car Market: Overcoming Challenges and Maximizing Success.