The Buyer You Forgot About
The Buyer You Forgot About. I recently read a statistic that stated the cost for a dealer to convert a new car buyer at around $500. Why is the push for new customers so valuable to the decision makers at a dealership when the biggest opportunity lies within their very own DMS, and all the owners who have already said ‘yes’ and continue to do so by returning to the service drive to service their vehicle?
Automotive dealers have thousands, in some cases tens of thousands, of potential buyers in their DMS. These are ideal candidates who will consume information at a minimal cost, whereas an email – which has no cost – will get in front of and viewed by potential buyers who have trusted your store in the past. Although some of those relationships have been lost due to poor service, bad purchasing experiences, relocation, etc., there are plenty of success stories that you can capitalize on in a big way!
When it comes to vehicle sales, there is no real way to force a deal. What I mean by this is that the market is going to do what the market is going to do. There is a certain amount of vehicle sales that a giving market will accommodate. The only way to gain market share is by taking it away from your competitors through expensive marketing campaigns, differentiation in your experience (both in-store and online), or worst-case scenario, by discounting and losing margins. Yet this does not mean more sales. It just means some dealers will position themselves to take more of what is already available in a given market.
I am not advocating that you should not advertise for new customers and new business, because you absolutely should. What I am hoping to convey is the fact that dealers already have a primed buyer who you can move into a vehicle at a much lower acquisition cost to you and one that will allow you to keep more profits. This buyer will generate plus units in your monthly count. Think about it this way: If you can convert customers from your DMS that is not in the market, that is a truly new opportunity. Those buyers were not going to shop at your store, and they were not going to shop at your competitor’s either.
How many more sales could you generate from the hundreds – maybe thousands – of vehicles that circle your service drive every single month?
Here, I am going to share a strategy that I have implemented time and time again with great success at many dealerships. I promise you, that if you follow this strategy, you will sell additional true units. All I ask in return is if you implement this, send me a note on LinkedIn and share your success story with me.
Step 1. Identify a Buyer
The number one rule of sales is you must have a buyer. Dealerships have many qualified buyers within their DMS that they can tap into every single month. These are buyers who already have a relationship with the store and are more likely to consume the information that is put in front of them.
Pull a list from your DMS of brand owners whose last purchase was three years or more who also have more than 50,000 miles and who are in a positive equity position.
Note: You do not need positive equity for this to work, but it will give you a solid value proposition that, if communicated effectively, will be hard to pass up on.
Here is the most important step: You can further filter the list to include only those customers who have had two service visits in the last twelve months.
Note: If you want to make this even more effective, look for the owners that have serviced their vehicle at the dealer since the time of purchase.
You want to ideally have email and phone numbers available for this effort.
Step 2. Set Yourself Up for Success
This will not work nearly as well as it could otherwise if you just start dialing or emailing these customers.
What you must recognize is who owns the relationship with the brand owner. It’s not a BDC agent and it certainly is not the person that sold the vehicle. It’s the service adviser, hands down!
The loyalty that customers have with their adviser, especially a trusted one, is a very strong bond. Dealerships will lose customers when a good service writer changes facility, that is how strong that relationship goes.
Trust me, the service adviser is the most under-utilized resource at almost every dealership when it comes to generating sales. These individuals know the owners better than anyone. The brand owners almost always trust their guidance.
Note: Make sure the list is broken up by adviser, meaning pair up the owners from your list with the adviser they see on a regular basis for best results.
Step 3. Communication Approach
Because of the specificity of this list, the conversion on it will be very high. Remember you are targeting customers that already have a relationship with your brand and dealership. They continue to say ‘yes’ to you by servicing their vehicle with you. This is a value proposition (potential equity upside) or it could be the idea of an upgraded unit for slightly higher payment or the potential savings in additional maintenance as the vehicle ages.
I recommend using email and voice for this specific effort. You could try direct mail and/or social media, but it won’t be as personal of a touch. You want to capitalize on the trusted relationships your customers have developed with your service adviser.
Send an email first, then follow these guidelines:
1. Make sure the email is coming from the advisor! Make it sound personal by including specific details, like time-servicing their vehicle, accurate make and model, and even mileage if possible.
2. Get straight to the point. Once the introduction is made tell them exactly why you are reaching out.
3. Consider this email just the preliminary contact and make sure the owner knows it. Set up a follow-up phone call to review the details.
4. Let the brand owner know that you take your responsibility to ensure they are taken care of very seriously. You can do this by saying, “When I heard of this unique opportunity, I had to let you know myself!”
5. Make sure the email is signed by the adviser, not the GM, owner, BDC agent, etc. to leverage the relationship.
6. Set up a timeline where the advisor will make the call to follow up with the brand owner, and then make sure that the calls take place.
7. Set a vehicle evaluation as the call to action, then invite the brand owners to come in when it is convenient for them.
Step 4. Make it Worthwhile
Set up a compensation agreement with the advisers! This is not a free effort for your ASMs. You will pay a referral fee to a stranger, but not the employee who is leveraging his relationship on your behalf.
If you are expecting the advisers to take time out of their busy schedules to make these calls for nothing, do not even start this strategy. The adviser should benefit from their efforts and, if you are fair, you will see some incredible results with this campaign.
Step 5. The Experience is Key
The experience is still king. Remember that you are tapping into your most valuable resource: brand owners who trust you and have already chosen you repeatedly. Make sure that you are not turning this opportunity into a negative experience that can damage that long term.
Evaluate the vehicle, and present the facts as a soft touch, this is not the time to high-pressure close. Remember these consumers are not in the market. They are not buying from you or your competitors. Leave them with the information on potential savings or, if there is no equity opportunity, leave them the information on features and benefits of the upgraded vehicle and of potential long-term repair savings. They will then start to inquire as their vehicle ages and experience more wear and tear.
If you use this strategy, an extra benefit I typically see is gaining more profit per deal as the consumers have not conducted the fourteen-plus hours of research they average prior to making a purchase.
If you get overly aggressive and pressure the sale, you will likely lose the customer altogether.
If you follow these steps and present the facts to the potential owners, I promise you will sell more cars every single month and you will gain the opportunity not just to make another sale, but to also continue the ongoing relationship between you and the brand-owner. This is ultimately the biggest win!
One last parting thought: It is always advantageous in business to focus on keeping the customers that we already have instead of acquiring new ones. Dealerships have so much upside potential when it comes to this as they have a DMS full of potential buyers who are ready to transact provided we give them a reason to!
If I can help your current efforts in any way, please feel free to contact me.
As always, I am here to help!