With 2020 behind us, dealership leaders are entering the new year with many important lessons learned on pivoting and keeping their businesses moving forward despite industry disruption. 

Proactive dealerships stayed ahead of the curve by adapting to their customers’ needs, accommodating new buying behaviors and meeting their customers where they are by embracing new sales models. According to IHS Markit, 65% of dealers now expect an acceleration in the development of online vehicle sales and booking platforms.

However, as growing car buying trends cement into ongoing consumer buying habits, dealers are challenged to strategize for success for the long haul – with no time (or resources) to waste. 

In recent IHS Markit forecasts, light vehicle demand is projected to continue to pace the economic recovery this year. In this “baseline scenario,” automotive sales are projected to grow 9% year-over-year in 2021, rising from under 75 million in 2020 to almost 82 million.

To embrace these 2021 car sales opportunities, dealers need to ensure their sales team and process are nimble and ready to adapt. In this blog post, we share three ways for dealerships to embrace auto industry trends and strategize for success in 2021 by: 

• - Putting the right people in the right roles 

• - Refocusing your sales and marketing processes on the customer experience

• - Deploying an inventory strategy driven by data

The Right People in the Right Role

In previous years, your sales process – and your sales team – was likely structured differently than it is today. Dealerships and team members that resisted change and digital transformation inside the dealership now can’t afford to ignore growing consumer demand for new buying experiences. 

With dealers facing increasing tight margins, embracing new sales models continues to be a critical trend in automotive, even as buyers begin to return to showrooms, revealing key efficiencies that will serve dealerships long into the future, regardless of what 2021 looks like.

One important element for staffing your departments with future-ready staff is the understanding of digital retail options and how they can improve overall efficiency. According to a recent IHS Markit study, consumers who purchased at the peak of the pandemic and completed their entire transaction at the dealership interacted with 3.8 dealership personnel on average. This number drops to 3.0 for consumers buying partially online and partially at the dealer and only 2.1 personnel on average for online-only buyers.

With digital platforms automating the process, customers can take a self-serve approach to actions such as negotiating their trade-in, reducing the overall number of staff touchpoints and improving the efficiency of the sales process. 

However, the physical dealership experience is an automotive trend that still matters. The same previously mentioned IHS Markit study found 79% of all surveyed consumers test drove their vehicle prior to purchase – 69% of those consumers at the dealership. 

By embracing an omnichannel approach, dealers are empowered to both implement new cost-saving efficiencies and ensure their dealership’s online and offline experiences are seamlessly integrated. But you need the right team to support the process.  

Audit your current tools and technology to identify opportunities to integrate data from tools such as your CRM, DRM and sales platform to unlock greater impact for your team. Ensure every member of your team can confidently use employee-facing technology and are particularly adept at seamlessly transitioning their approach from online to in-person to offer customers a consistently great experience at every step. 

To foster these skills dealership-wide, talent management and retention are increasingly valuable. When hiring new employees, seek out recruits who are digitally proficient, as well as those who are willing and excited to expand their horizons and seek out ways to grow beyond their current experiences.

Don’t forget to inspire and incentivize your team to continue growing their sales skills by participating in ongoing training and education opportunities. With the increasing popularity of virtual events, these previously cost-prohibitive trainings are more accessible than ever. 

Refocusing Processes on the Customer Experience

When consumers are determining where to buy, regardless if that’s online or in-store, convenience is critical. Research from IHS Markit finds both online and in-person car buyers ranked convenience as the leading factor when deciding where to buy a vehicle – ahead of any other consideration, including price.

Every experience your customers have with your dealership online and in-store should reflect your internal brand values. With dealerships around the country competing for attention and sales, it’s critical to cut through the noise by delivering the right message at the exact right time.

By leveraging high-quality data and intelligent marketing technology, dealers can identify prospective buyers predicted to begin shopping for a vehicle soon and begin targeted and tailored outreach before the competition.  

Personalized messaging helps “cut through the clutter” and consistency is key to maintaining an exceptional customer experience throughout the entire customer journey. This approach extends to maintaining communication with your existing customers to promote future loyalty and to proactively defend against defection. 

For example, service alerts are a great way to keep customers engaged with your dealership after the sale, while also delivering the kind of care and convenience today’s customers crave. 

Committing to an Inventory Strategy Driven by Data

With so many aspects out of a dealer’s control when it comes to inventory constraints, dealership success in 2021 rides on “controlling what is controllable” starting with utilizing the wealth of data locked away in your CRM and DMS to fuel a data-driven inventory strategy. 

With wholesale pre-owned prices performing consistently strong, many dealers are sending more cars to auction now than ever. But with wholesale prices slowing, some dealers are holding onto trade-ins they may not have in the past to help fill their lots. 

With retail typically generating less overhead than auction, this approach poses a valuable opportunity for dealers with the right customer and market insights. Before sending vehicles to auction, identify prime retail opportunities by analyzing factors like the vehicle’s maintenance history report to better predict reconditioning costs and see how quickly similar vehicles have sold in the past.  

By utilizing behavior prediction technology that integrates with a dealership’s CRM, DMS and inventory data, dealerships can take this approach one step further by proactively identifying owners of in-demand vehicles, engaging prospects driving highly profitable trade-ins before they start shopping around. This allows dealers to effectively automate the process of growing a profitable used vehicle inventory by acquiring in-demand makes, models and trim packages while subsequently improving the customer buying experience.

While by now, discussions surrounding the “new normal” inside the dealership may seem redundant, the processes and auto industry trends that emerged in the last year have changed the way dealers think about how they hire, how they interact with customers and how to manage their inventory. By embracing these trends in automotive, and our new normal, dealers are well-positioned to strategize for success in 2021. 

Dwelling on the problems brought on by the pandemic can be exhausting, but there are many silver linings. Perhaps no lesson was learned as quickly as auto dealerships’ dependence on in-person sales – and the critical need to quickly adapt to a virtual dealership model.  

With restrictions and spikes in COVID-19 cases around the country keeping customers from shopping in-person, embracing omnichannel and digital retailing became crucial for the survival of nearly every dealership in the country. This quick shift in approach provided many new opportunities.

In a recent industry survey, 70% of dealers using omnichannel retailing solutions say their sales process is more efficient as a result. In this same survey, dealers ranked "Technology Savvy" as their #1 most valued skill among employees, rising from the #3 slot just a few months ago. 

To continue advancing into a digital dealership model in the new year, dealers need to ensure they have both the right tools and the team to succeed in today’s increasingly digital market. In this blog post, we share three best practices for building a digitally savvy dealership team, including: 

• - Creating a dealership culture focused on the customer experience 

• - Building a digitally-savvy team with diverse skills that is able to pivot and evolve 

• - Embracing data-driven, digital tools for a competitive advantage

Create a Dealership Culture Focused on Customer Experience 

Online and in-person car buying experiences are becoming increasingly intertwined. For example, research from IHS Markit found nearly 60% of consumers who purchased a vehicle during the peak of the pandemic did so at least partially, if not fully, online. However, the physical dealership experience still matters, with 79% of all surveyed consumers test driving their vehicle prior to purchase – 69% of which test drove at the dealership.  

Thus, building a digitally savvy dealership team starts with fostering a dealership culture focused on delivering a consistently exceptional customer experience across all platforms. Set clear goals and expectations for your team. Every experience your customers have with your dealership – online and in-store – should reflect your brand promise. Ensure these goals are SMART (specific, measurable, achievable, relevant and time-based) and are regularly communicated across teams. 

Just as you need to train your staff to assist customers across platforms, you also need to ensure your dealership’s platforms are equipped to digitally assist customers in whatever ways they need. Enhancing your customers’ digital experiences doesn’t just mean keeping prices and photos updated on your website – this also includes creating a fully digital pre-purchase experience customers can enjoy from start to finish. 

Ensure customers can take a self-serve approach to actions like negotiating their trade-in to reduce the overall number of staff touchpoints to promote consistency and improve the efficiency process.  

Build a Digital Team With Unique and Diverse Skillsets

Whether you’re transforming your BDC into a new kind of digitally-focused department or developing a new department within your dealership to solve specific problems, your team must have diverse skillsets and strengths, while also being unified in their focus: Tackling whatever problem lies ahead.  

Seek to hire and retain employees with various experiences and backgrounds. These employees must also be able – and eager – to adapt to every challenge the future can throw at your dealership. While it’s impossible to know exactly what lies ahead, proactive dealerships staffed by teams ready to flex and find solutions can more quickly adapt and remain nimble amid change. 

Finally, ensure leadership is fostering innovation and inspiring your team to continue developing new ideas. Encourage your staff to continue growing these critical thinking skills by participating in ongoing training, digital sales training, or educational opportunities, many of which are now available virtually. 

Embrace Modern Digital Tools

With so much in the current marketplace out of dealers’ control, success is often dependent on dealers focusing on what they can control, starting with utilizing the wealth of data locked away in your sales and service systems. But to take advantage of this wealth of knowledge and fuel your dealership’s digitally-focused sales team, you need the right tools. 

By utilizing advanced marketing technology, dealers can accurately and efficiently utilize every available dataset, from sales to service and beyond, turning raw data into actionable customer insights. 

With these insights at your fingertips, your team can predict which customers in your CRM and DMS are reaching a point in their lives where they will likely be shopping for a new vehicle soon. These factors can include changes in a person’s career or identifying growing families currently driving vehicles too small for their situation, allowing your team to proactively meet your audience where they are, in the format of their preference and with intelligent and personalized messaging. 

Not only can these predictive tools be leveraged to identify prospective buyers, but this approach can be critical to the development and management of a healthy used car inventory. By utilizing those same data-driven customer insights, your service team can identify drivers of in-demand makes, models and trim packages predicted to reenter the buying journey soon and engage prospects driving highly profitable trade-ins before they start shopping around.

For decades, automotive digital retailing and the concept of “buying online” was the future, deemed cutting-edge…and for some, a passing fad. 

By now, many dealers have at least accepted digital retailing isn’t going anywhere, with a recent survey from Automotive News finding 88% of dealers are likely to increase their use of digital tools to increase customers as a result of COVID-19. However, simply having a dealership digital retailing option isn’t enough – especially if that option isn’t turnkey or is inefficient.

In the current competitive landscape, if your dealership is ill-prepared to deliver an efficient, user-friendly digital retail experience, you risk watching from the sidelines soon.

In this blog post, we outline three ways dealerships can improve the efficiency of their digital retailing processes by: 

• - Investing in digitally-savvy personnel and continued learning

• - Using high-quality data to fuel dealership operations

- Embracing omnichannel marketing solutions 

Invest in Tech-Savvy Personnel and Continued Learning

Chances are that your dealership is staffed by all sorts of interesting people. From long-time industry vets to up-and-coming Gen Z leaders, oftentimes a dealership’s greatest strength is its team’s collective and diverse skill set. But in a quickly evolving, digital-first market, it’s critical your team shares one common trait: tech savviness. 

Whether it’s video production, social selling or confidently using customer-facing technology, every member of your sales team, from top to bottom, should be capable of and actively engaged in contributing to your dealership’s digital retailing process. 

That doesn’t mean you should clean house and start from scratch. Just as elements of your dealership’s traditional sales strategy translate to your digital retailing strategy, focus on transitioning and readapting your team’s existing skill sets first. Inspire your team to continue growing by participating in ongoing training and education opportunities, such as virtual events that circumvent the formerly prohibitive costs and time lost associated with in-person training events. 

Use Data to Fuel Dealership Operations

With so many variables out of a dealer’s control, digital retailing success hinges on how well you adapt and focus on the elements you can control. The more information you have about what is going on around you, the easier optimizing your digital retailing process will be. 

Start by ensuring the data locked deep in your CRM and DMS can be used to fuel processes like your dealership’s acquisition and inventory strategies. For example, dealers can reduce their dependence on third party lead providers by utilizing advanced behavior prediction technology like Market EyeQ. 

When integrated with data from your CRM and DMS, these tools incorporate intelligence from top-tier sources to predict which of your customers are reaching a point in their lives where they will likely be shopping for a new vehicle soon. By focusing on only the best leads and opportunities, dealers can both reduce time wasted on nurturing unqualified leads and resources lost to spray-and-pray marketing. 

These same advanced tools can also be used to fuel a data-driven inventory strategy. When deciding which vehicles to retail and which to send to auction, dealers using these tools can analyze factors like a vehicle’s maintenance history, current auction prices and local sales popularity to determine which models are most likely to turn a profit – and won’t spend too much time sitting on the lot. 

Embrace Omnichannel Marketing 

While automotive digital retailing is quickly evolving, brick-and-mortar sales aren’t necessarily defunct – far from it. With the pandemic accelerating the use of digital retailing, many dealerships have started seeing success adopting an omnichannel sales strategy and solutions to quickly and easily meet customers where they are – whether that’s online or in-person. 

Not only does this approach empower dealers to appeal to new consumer buying behaviors, it also ultimately enables dealerships to operate more efficiently. In a recent industry survey, 70% of dealers using omnichannel retailing solutions say their sales process is more efficient as a result. 

There’s no singular path every customer takes from their first inkling of wanting or needing a new vehicle to signing on the dotted line. Whether they’re researching, visiting the dealership for the third time with their third salesperson or walking into the dealership ready to submit their credit application, every interaction with your dealership should be connected – and, above all else, represent your dealership’s core values. 

To customers, there is no difference between their interactions in person or online. Ensure your team can follow customers across platforms and seamlessly transition from each touchpoint. It’s critical your dealership’s website and other digital retailing platforms are connected and reflective of your in-person dealership experience and able to support your customers throughout their entire buying journey – and beyond. This means connecting your dealership’s inventory, CRM, DMS, digital retailing platforms and more to provide a simple and straightforward customer experience. 

A sustainable plan for improving your dealership’s digital retailing strategy means taking a deep-dive into critical processes and people supporting your dealership – and may require dealers to reassess the way you are currently doing business. While this might seem like a massive undertaking, in the end, improving the efficiency and efficacy of your dealership's digital processes empowers dealers to continue doing what they do best long into the future – serving their customers. 

This year has been a wild ride, to say the least. Dealerships have done their best to keep up with changing consumer trends and tightening margins, all while staring down the barrel of uncertainty related to COVID-19 protocols and other external factors. Still, dealers and consumers alike have proven to be resilient, bucking some auto sales and financing predictions from earlier in the year. 

While continued marketplace fluctuations make exact predictions surrounding the future of automotive sales and financing nearly impossible, there is plenty of data and forward-facing insights available for proactive dealerships to add critically-important updates to their processes and help cement future success – no matter what lies ahead.

Opportunities exist inside the dealership in 2021 – including in the F&I office. In this blog post, we analyze the state of automotive finance market, including:   

– Changes to current buying preferences
– What’s happening with finance at the dealership level
– How to prepare for future F&I success

The Realities at Dealerships

When asked about their future buying plans earlier in the year, many buyers responded they were delaying their purchase – though not canceling their purchase plans completely. Throughout the summer, consumers increasingly responded positively to impressive manufacturer incentives like 0% financing. By the end of May, one industry study found a whopping 90% of new vehicle shoppers believed it was the ideal time to get a great deal on a vehicle.

According to new findings from IHS Markit, these aggressive manufacturer incentives effectively offset the impact of COVID-19, impacting the U.S. automotive finance market by moving customers away from leases and toward loans. Of the lease customers who returned to market this past January/February, 75% leased again. Between March-July, this number dropped to only 67%, driving up the loan mix from 25% at the start of the year to 33%. 

Similarly, purchasers who returned to market and purchased again jumped from 89% in the early months of the year to 92% in recent months.

With new vehicle inventory still limited for much of the U.S., many of these OEM programs are beginning to fade away, putting the pressure of offering attractive automotive financing options back on dealerships. This means auto dealerships must ensure they’re engaging customers with firm financing offers on all new vehicle sales, highlighting the importance of having your marketing, F&I and sales teams all directly connected and communicating effectively. 

As consumers continue to report being financially impacted by the pandemic, proactive F&I involvement is critical, starting with those first customer touchpoints. Ensure your marketing addresses any identified financial pain points customers demonstrate before they come in, including available OEM CPO programs, automotive financing terms or other special offers.

Addressing Changes in Buying Preferences

With a surge in financial stressors and a dramatic decrease in the number of new vehicles populating lots around the world, pre-owned vehicles are in the spotlight like never before. Proactive dealerships are taking pre-owned sales more seriously, especially when it comes to financing.

According to NADA’s 2020 midyear report, many dealerships have been taking steps and making progress in growing their F&I market penetration, rising from 54.5% in 2010 to 77.8% in 2020. With new vehicle benchmarks set around 80-90%, there’s still plenty of room to grow when it comes to pre-owned vehicle financing. 

Ensure your F&I team is focused on pre-owned opportunities and is regularly communicating with your sales team. Just as with new vehicle sales, it’s critical to introduce F&I involvement in the initial stages of the buying process, capitalizing on offers like extended warranties and wrap coverage to ensure customers their pre-owned purchase will be covered for the long-haul. 

Preparing for 2021 Opportunities and Beyond

Perhaps one of the most visible impacts on dealerships in 2020 was the rapid adoption of digital retailing. Research from IHS Markit finds 61% of consumers who purchased during the peak of the pandemic did so at least partially, if not completely, online. Dealers have the opportunity to take this approach even further in 2021 by bringing other elements of the dealership online. 

In the previously mentioned survey, respondents who purchased at the dealership in 2020 ranked negotiating a vehicle price and securing F&I products among the top 5 touchpoints they would have liked to have completed online. 

Ensure your BDC is equipped with the tools and information needed to both identify qualified, prospective buyers and seamlessly connect them to your F&I team. From here, ensure your F&I team is prepared to offer services virtually, including options like video chats and e-signing. 

Taking F&I processes online allows dealers to appeal to new consumer behaviors and improve efficiency, reducing some of the friction typically seen in F&I offices that could negatively impact results. Its critical dealers embrace digital solutions that automate steps in the process, such as pre-filling forms and documents, such as credit applications. 

Offering F&I services virtually isn’t simply a “nice to have” option for dealers – it offers serious benefits to your bottom line, especially with uncertainty still on the horizon. A study in April 2020 by NADA discovered a 58% increase in F&I profits from February to April for buyers who worked through a digital purchase process, where traditional dealerships only saw a 35% increase over the same time. 

While what exactly 2021 will hold for dealers may be uncertain, the past year has proven dealerships that take a proactive approach to adapting sales and automotive financing processes have every opportunity to succeed.

From OEMs to dealerships, predictive analytics tools are revolutionizing the automotive brand experience for consumers. Simply put, these tools analyze trends and data from the past, along with what’s currently happening, to predict what is most likely to happen in the future. 

Across a growing range of industries, predictive analytics drive things like auto insurance rates, sports team strategies, airline ticket prices, YouTube video suggestions, how much your rideshare trip will cost and much more. 

From an automotive retail perspective, dealers can use predictive tools to inform decisions related to inventory, merchandising, pricing and more, resulting in improved efficiency and efficacy to pave the way to greater ROI.   

When fueled by high-quality, relevant data, predictive marketing software  can generate insights that empower brands to intelligently identify, engage, convert and retain more customers. With 80% of dealerships expecting a future change in the way business is being done away from the traditional approach, these tools offer dealers an especially valuable opportunity to look ahead and proactively plan for success. 

In this post, we’ll share how predictive analytics empower automotive OEMs and dealers to adapt and evolve and innovate, including: 

• – Upending the traditional sales lead “quality versus quantity” model

• – Revolutionizing marketing and dramatically redefining the ROI equation through personalized marketing

• – Providing the necessary insights to win and keep customer loyalty

How Predictive Analytics Benefits the Sales Lead Equation

We’ve previously explained how predictive analytics have upended the traditional balancing between quality and quantity for automotive sales leads. 

Predictive analytics lead scoring tools like Market EyeQ combine customer insights from dealers' CMS and DMS, as well as demographic, historical and financial data from third-party data partners such as IHS Markit, TransUnion and CARFAX in a single environment. From here, Market EyeQ automates the process of sifting through leads by leveraging predictive analytics to assess each household in a dealer’s market and identify which customers are most likely to buy. 

Instead of a stack of leads, sales and marketing teams receive an actionable assessment of customers ranked on a 0-100 scale according to Market EyeQ’s Behavior Prediction Score®, along with the actionable insights explaining exactly what went into that prospect’s ranking. 

This predictive analytics lead generation approach empowers sales teams to make the most of their leads by focusing their time and efforts on their best opportunities. As a result, dealers who leverage Market EyeQ’s Market Conquest gain up to 15 incremental new conquest sales a month.

Revolutionizing Marketing ROI with Predictive Analytics

To understand the power of customer-centric marketing powered by predictive analytics, look no further than one of the standard-bearers of analytics in business: Amazon. 

Amazon is famous for its “obsession,” as founder Jeff Bezos calls it, with customer service – and dealers know how much customer service impacts sales. Amazon’s focus on customer service is rooted in its use of predictive analytics and intelligent, personalized marketing. The company’s predictive marketing is critical to its success, with research finding 73% of regular online shoppers had clicked on a personalized Amazon product ad – 83% of which converted to buyers.

For automotive OEMs and dealers, results like these come from connecting customer insights, just as Amazon does, with high-quality third-party data to automatically identify consumers who are predicted to be in the market for a vehicle – along with those who may not be shopping yet, but are predicted to enter the market soon. Predictive marketing software like Market EyeQ automatically engage these high-potential buyers when they are most likely to respond with personalized messaging designed to shorten the length of the sales cycle. 

By deploying this type of low-touch marketing, Mastermind’s Market EyeQ sales platform lowers dealers’ cost-per-sale by an average of 80% and generates up to 15x ROI.

Changing the customer relationship

In the modern automotive environment, brand loyalty is largely dictated by a customer’s experience – and knowing what customers want. Research from Mintel found 44% of U.S. automotive consumers were looking to change automotive brands on their next purchase, with 53% citing their needs not being met as a reason for defection.

Predictive analytics tools often generate insights that empower brands to rethink what “everyone knows” about what matters to consumers. For instance, analytics-powered research conducted by IHS Markit for Toyota found that the strongest driver of automotive brand loyalty was, of all things, collision repair orders. Meanwhile warranty repair orders – commonly considered an important customer service touchpoint by dealers and OEMs alike – had no impact on brand loyalty. These findings, in part, lead the automaker to expand its certified collision program.  

At a dealership level, it’s insights like these from predictive analytics tools that provide real opportunities to proactively build the kind of customer experience-driven loyalty that is so important to a dealer’s bottom line. 

Simply knowing what factors are impacting customer loyalty is only half of the equation. You still need the tools and high-quality customer data to leverage those insights in an efficient and meaningful way. According to Microsoft, more than 75% of consumers expect customer service representatives to have visibility into previous interactions and purchases, and 70% expect you to know their contact, product and service information and history in front of them –  regardless of the channel. 

Market EyeQ’s intelligent behavior prediction modeling algorithms empower dealers to do just this. By both identifying which customers are ready to re-enter the sales cycle and generating personalized messaging based on the specific factors predicted to influence their purchasing decision, our dealer partners are able to deliver an exceptional customer experience – and increase retention up to 15%.

It’s long been the responsibility of dealers to identify and grow today’s automotive retail professionals into the dealership leaders of tomorrow. The dramatic challenges facing the automotive industry in the past year have largely emphasized this, plus the critical importance of ensuring dealership leaders are coached and prepared for whatever new obstacles may lie ahead. 

This preparation starts with effective leadership coaching. NADA research finds that 90% of dealership executives consider leadership coaching a critical topic for dealership success. It’s more important than ever that dealers design and implement automotive leadership trainee programs that provide effective leadership coaching to prepare the next generation of leaders in the automotive industry for future challenges and opportunities. 

In this post, we share starting points for your dealership’s automotive leadership trainee program and best practices for coaching and mentoring leadership, including:

• – Prepare and plan

•  

– Give them what they need to succeed 

• – Identify the right leadership coaches

•  

Have a plan and set expectations

Research finds leadership coaching offers real benefits, both to the recipient and organization. From the individual side, 80% of people who received coaching report increased self-confidence, and more than 70% said they benefit from improved work performance, relationships and more effective communication skills. Meanwhile, surveys found that 86% of companies report a positive return on their coaching investment.

Leaders in the automotive industry know all too well dealership success hinges on setting effective goals and measuring outcomes. That’s not just for sales quotas or F&I upsells, but also true for your automotive leadership trainee program. 

Make sure you’re setting clear targets for your dealership leadership coaching programs, both for the program as a whole and individually with personal targets for participants. Ask if the goals you set for your team are SMART: Specific, Measurable, Actionable, Realistic and Timely, and ensure you have the proper tools in place to track progress. 

Your expectations should mirror those of your customers. Ensure your team is thinking of evolving buying behaviors and focus on building a team culture based on delivering a great customer experience. These metrics won’t always be sales numbers, per say. Look at the behaviors that empower your team to deliver that exceptional customer experience – engagement with teammates, engagement in training, effective use of resources and tools – and incentivize participants to take these actions. 

Identify the right coaches – with the right mindset 

As we’ve noted before, Google’s own internal research found the top attribute of a successful manager in their organization was “Is a good coach.” However, don’t assume this means the best performers in your dealership are automatically the right people on your team to run your automotive leadership trainee program.

Consider that in sports, superstar athletes rarely become great coaches. Rather, many of the best coaches in sports history were “grinder” players in their day who built their careers figuring out how to maximize every facet of their own skillset or finding innovative ways to overcome challenges. Similarly, in a dealership your best leadership coaches may not be the top sellers, but rather the people who had to learn how to overcome challenges. 

When you’re looking for the first cohort of coaches, start with the people who had to work the hardest to get where they are today. This tenacity is a critical trait during times of market volatility. Seek out those who look for creative solutions to challenges or limitations, as they’ll be more likely to provide effective coaching and mentoring leadership themselves. 

Help your dealership team  succeed now and in the future

Coaching isn’t cheerleading – and it isn’t necessarily managing either. One other difference between coaching someone and managing them is the role of advice in the relationship. Effective leadership coaching encourages – and sometimes even forces – the person being coached to develop the answers themselves. 

To empower your team to develop these dealership leadership skills requires giving them the tools and training they need to succeed. Audit your current tools and technology to identify opportunities to improve. Look for areas of opportunity like integrating data from tools such as your CRM, DRM and sales platform to unlock greater impact for your team. Ensure every member of your team can confidently use employee-facing technology and can take advantage of its full range of applications.    

Many times, dealers will invest in the tools, but not the training. In fact, a recent industry study found 1 in 3 dealership leaders aren’t investing in employee training opportunities beyond what the OEM provides. Encourage future dealership leaders to expand their horizons and seek out ways to grow beyond their current experiences through expanded professional development and automotive sales training. 

Remember: You’re coaching someone, not cloning yourself. Instead of doubling down on the way “it’s always been done,” encourage mentees to develop the tools and habits they’ll need as a dealership leader when they’re the one being asked for advice rather than doing the asking. 

Here’s a leadership coaching principle to keep in mind: If you’re trying to turn them into you, they’ll never get any better than you.

Dealership best practices for engaging auto sales leads have evolved over the years to keep pace with changing automotive consumer preferences and marketplace conditions. With each advance in technology or shift in the market, the best practices in automobile dealerships have kept pace as dealers innovated to close sales and build customer relationships better, faster and more efficiently than their competitors.

That remains true today, as broad trends have unexpectedly accelerated, and consumer needs have suddenly shifted due to the COVID-19 pandemic and other factors in play. While the fundamentals of the automotive business remain the same, many dealership best practices for identifying and engaging prospective customers are changing – with dealers discovering the key to generating auto sales leads is to identify prospective buyers early in their car buying journey – or better, before it even begins.  

In this post, we look at four valuable auto dealership best practices for engaging auto leads in a rapidly changing marketplace to stay ahead of the competition, including:

• – Powering your outreach analytics with high-quality data

• – Analyzing your local market for opportunities

• – Maximizing your dealership’s virtual retailing process 

• – Proactively engaging loyalty and service conquest customers

Start With Quality Data

The past year has been marked by incredible volatility, impacting the finances of everyone from OEMs to buyers and driving major change in consumer buying habits. In fact, a recent automotive industry survey found one-third of customers intend on spending less on their next vehicle as a result of COVID-19. 

If your audience’s finances and buying preferences are changing, does your auto dealership’s data reflect that? When it comes to the quality of the data your analytics are using to generate auto sales leads, remember the old computer industry saying: “Garbage in, garbage out.” 

Low-quality data generates low-quality analytics insights, low-quality analytics insights create low-quality auto sales leads and low-quality leads cost you time, money and profits. There’s real money at stake: Gartner estimates that bad data costs the average organization it surveyed $15 million a year, in everything from wasted time to increased risk to decreased consumer confidence.

With increased competition and thinning margins, access to reliable data offers auto dealers an invaluable competitive advantage – especially when their competitors don’t have access to that same data. For example, Market EyeQ incorporates high-quality proprietary data from partners such as IHS Markit, TransUnion and CARFAX, with information from our dealer partners’ own DMS and CRM data, giving them a comprehensive look at the local market – something their competitors simply don’t have. As a result, our auto dealer partners report gaining up to 15 incremental deals per month, on average.

Pay Close Attention to Your Local Market

It’s always been important for a dealer to pay attention to what’s going on in the world outside their walls, but that’s arguably never been truer than right now. While this is certainly the time to search out the latest information about big picture automotive industry trends, consumer sentiment and other relevant information on a monthly or even weekly basis, it’s equally as critical that dealers monitor their local market for changing buying behaviors – and potential opportunities to attract auto sales leads. 

According to IHS Markit’s review of U.S. registration data, the automotive shopper mix is different in 2020 than it was a year ago. Compared to 2019, characteristics of 2020 car shoppers who are back in the market so far this year are:

• – More likely than they were to own a light truck, with pickups being the most popular body style overall

• – More likely to buy domestic

– More concentrated in small towns and rural areas

• – Older

•  

•  

– More likely to purchase than lease

Do you know which makes and models are popular right now in your unique, local market? By analyzing their local market and ensuring their available inventory mix reflects changing consumer behaviors, dealers can create a more welcoming environment for auto sales leads, paving the way for an exceptional customer experience from that very first touchpoint. 

This approach to engaging auto leads is especially impactful in today’s market where an increasing number of consumers are now considering both new and pre-owned options. Edmunds reports 29% of current new vehicle buyers are also considering used – a 5% increase in just a few months. By taking a comprehensive look at their local market, dealers can both create an attractive inventory and engage prospective buyers more effectively by matching them to the vehicle they’re most likely to purchase – whether that’s new or used.

Deliver the Sales Experience Customers Want

Consumers haven’t just changed which vehicles they’re shopping for – they’re also changing how they’re shopping. According to a recent study, more than 75% of Americans have tried new shopping methods, brands or places during the pandemic, and at least 60% have the intention of sticking with them in the long term. 

Online,  auto dealers aren’t just competing with local competitors or even other dealers – they’re competing with the estimated 4,000 to 10,000 advertisements the average American sees each day.

To both stand out among the noise and deliver the new experience buyers have come to expect, it’s critical dealers take a data-driven approach to their conquest marketing strategy. This goes beyond utilizing the right marketing channels. Rather, by leveraging predictive dealership marketing tools dealers can ensure they’re both targeting the right prospects and delivering the right message at the right time and in the format predicted to convert those prospects into buyers.  

Another notable trend is the rise of mobile online shopping: Comscore reports that in the first half of 2020, almost twice as many online automotive shoppers were on mobile devices than on desktop computers. 

Is your automotive dealership’s virtual retailing process optimized for mobile shoppers as opposed to desktop users? Is your BDC taking advantage of text and other forms of mobile communication? Now is the time to ensure you’re maximizing your dealership’s virtual retailing process to take advantage of every sales opportunity. 

Drive Auto Leads With Dealership Loyalty & Fixed Ops

Dealers have long understood the best auto sales leads are the ones you create, rather than discover. Loyalty sales are the most profitable thanks to the low cost of customer acquisition and pose a valuable opportunity for dealers to be proactive in identifying and engaging auto sales leads. 

Like conquest auto sales, predictive analytics combined with personalized marketing solutions are one powerful answer for how to generate and engage loyalty leads in an efficient and profitable manner. 

For example, according to IHS Markit, more than 3 million leases will expire before the end of 2020. Predictive analytics allow dealers to not only identify prospects coming up on lease-end, but also those whose vehicles will likely qualify for factory certified pre-owned status, offering dealers additional revenue opportunities, including F&I reserves, upsells and initiation fees.

Another long-time dealership best practice, service conquest can also be taken to another level with predictive analytics and personalized marketing solutions. The combination of high-quality third-party data with a dealership’s own internal DMS and CRM information and insight into a service customer’s existing vehicle turns service conquest into an increasingly powerful generator of auto sales leads – as well as a source of trade-ins to profitably fill used vehicle inventory. Using this data-driven approach, Mastermind’s dealer partners convert service customers into new car buyers at 4x the rate of competitors. 

While customers may shop around for fuel efficiency, they have nothing on dealers who are seemingly on a constant search for operational efficiency. With razor-thin margins and cutthroat competition, dealers know they can’t afford to allow inefficiencies to build up in their operations if they want to protect and grow their bottom line. 

A recent study by Automotive News found 88% of dealers are likely to increase their use of digital tools to increase customers as a result of COVID-19. 

The digital revolution in the automotive industry has given dealers a whole new set of tools and capabilities to drive deep and meaningful gains in efficiency throughout their dealership operations. But for all the ways in which digital tools have improved auto dealer efficiency, possibly none has been as powerful as the revolution in auto dealer marketing. 

The combination of high-quality digital marketing for car dealers, along with new capabilities in conquest marketing and the implications for the entire sales and service process, are driving powerful bottom-line changes for dealers who have embraced it.

In this post, we examine three key ways to improve auto dealer efficiency with the right digital tools by:

• – Improving dealership marketing ROI with predictive analytics

• – Reducing the time wasted on low-quality auto prospects

• – Activating more service customers as conquest leads

Digital Automotive Tools – Not Just Digital Automotive Marketing 

Dealership efficiencies from applying digital tools to auto dealer marketing aren’t found solely in cutting ad buys to print or TV in exchange for digital ads. Of course, automotive digital marketing is a powerful strategy that plays an important role in any dealer’s marketing portfolio, but the truly game-changing capabilities of digital tools when it comes to improving dealership efficiency is realized in the application of predictive analytics tools to create personalized predictive marketing campaigns.

Using high quality data sources and AI-powered analytics tools, predictive marketing personalizes and targets auto dealer marketing messages in a way that isn’t possible with a non-digital strategy. Each consumer touchpoint is targeted to its individual recipient based on channel, timing, messaging, offer and more to maximize the person’s potential engagement with the dealer and conversion into an active high-quality auto lead. 

This one-on-one personalized outreach would be immensely expensive if your dealership had to do it manually but becomes less expensive than legacy auto dealer marketing campaign models – while also generating significantly more actionable auto leads – by automating the entire car sales process through the power of modern digital tools.

Virtually anything that would make a previous dealership process 15 times more efficient than before is worth embracing wholeheartedly, and that’s the kind of results Market EyeQ’s predictive auto dealer marketing solutions are generating for our dealer partners: 15x marketing ROI over industry averages.

Improve Dealership Employee Time Management

When it comes to improving dealership efficiency, the importance of dealership marketing isn’t just in how much it costs, but also in what kind of leads it generates. 

Simply put, low-quality leads cost your dealership time and money. That might be time your dealership’s Business Development Center spends chasing down a weak online lead, or it might be wasted marketing spend reaching out to someone who seems like a good opportunity but already bought elsewhere because you are using a reactive dealership marketing approach versus a proactive dealership marketing approach.

Another important reason to improve your auto lead quality and reduce the time your salespeople spend on low-value prospects is to avoid the efficiency trap of constantly losing good people to greener pastures. 

Great salespeople won’t stick around long in an environment where they aren’t being supported with the right tools. Research found that 61% of all dealership employees don’t think their dealership is using the latest technology, and 25% were considering leaving as a result to find a job somewhere with a brighter future. High performers don’t want to be left behind, especially in an industry as competitive as auto sales, and they want the tools they use to be effective and efficient in getting the job done.

This drive for efficiency is one factor of Market EyeQ’s Behavior Prediction Score® that ranks every prospect on a 0-100 scoring system. The simplicity of a single numeric score according to the likelihood of a sale allows salespeople to quickly and efficiently prioritize their leads and give each one a realistic share of their time and effort.

Activate Dealership Conquest Opportunities Through the Service Drive

Service drives have long been epicenters of key customer experience touchpoints at the dealership. Attracting new service customers through effective automotive digital marketing is not only key to running a profitable service department, it also serves as an increasingly valuable conquest marketing opportunity.  

Conquesting service-not-sold leads has become a critical practice in the current automotive sales environment when the service drive is often the de-facto front door of the dealership, and digital tools like Market EyeQ’s Service Conquest functionality supercharge the process. 

Market EyeQ automatically mines the service drive for sales opportunities by assessing each upcoming service appointment and every drive-up customer as a potential sales lead, combining information from your DMS and CMS with data from other sources – and factoring in what repairs their vehicle will need – to generate a ranked list of prospects for your team to engage with personalized offers. 

This model is so efficient that Mastermind dealer partners who use Market EyeQ to convert service customers into new car buyers at a 4x higher activation rate compared to industry averages.

How many sales teams does your dealership have? If your answer is more than one, you may be missing valuable opportunities related to uniting your used and new car sales teams into a cohesive dealership team.

Auto industry sales trends illustrate shocks to customer finances and reduced new vehicle inventory has many would-be new car shoppers opting for pre-owned car options. As a result, a recent used car sales study found used vehicle sales grew by 105.5% from April to May 2020.

By uniting your dealership’s new and pre-owned sales teams, you empower them to take advantage of every opportunity by matching prospects to the vehicle they’re most likely to purchase (whether pre-owned or new) and delivering a consistently excellent dealership customer experience. 

In this blog post, we’ll share how dealership leaders can bring together their new and used car sales teams by:

• – Setting clear expectations

• – Rewarding the right behaviors

– Working from the same information

Set Expectations and Inspire Action

The road to a united car sales team starts with clear expectations and direction from dealer leadership. Your people need to understand that working together as a united sales team will benefit the dealership and one another by improving the customer experience and ultimately the bottom line.

This needs to be part of your efforts to create a dealership culture built on delivering great customer experience, as your sales team is a critical component of that effort. Research finds salespeople are the largest driver of car buyer satisfaction, ranking more than twice as important to customers than the time a purchase takes or even the vehicle sales price.

Find opportunities, such as during your daily Save-a-Deal meetings, to inspire your team while setting collective expectations and promoting collaboration by giving your teams a collective goal to work toward.  

Recognize and Reward Teamwork

When your team meets these car sales goals – reward them. Make sure your compensation and employee recognition tools can identify and track both individual and group efforts. Reward teamwork that closes a sale and gives the customer a great experience.

For example, one key dealer solution Market EyeQ includes in the performance insights reporting is a user-by-user view of how each of your salespeople is using the dealership platform tools, including total activity, activity by deal type (lease, cash or finance) and activity by Behavior Prediction Score®. 

This practice is valuable beyond just your sales teams, of course. BDC, F&I, fixed ops – if there were ever a time to identify and recognize employees who are making an extra effort to help deliver a great customer experience and contribute to the dealership’s bottom line, it’s now.

Work From the Same Information and Insights

It’s difficult to overstate the importance of having your entire car sales team working from the same set of customer and inventory insights. Collecting and analyzing data from your dealership’s CMS, DMS and inventory from a single sales platform allows your sales team to create a consistent sales experience while maximizing customer engagement by efficiently matching customers with the right offer and vehicle.

For example, Market EyeQ provides sales teams with unified customer insights to allow them to identify which prospects in your marketplace are most likely to purchase, whether that’s new or used. It also interfaces with personalized marketing campaigns to engage your best prospects with high-ROI marketing touchpoints selected by predictive analytics tools that deliver actionable offers at the right time, in the right form and through the right channel to maximize customer engagement.

Beyond solely improving your used and certified pre-owned (CPO) lead generation, marketing ROI and closure rates, putting everyone on a single platform also sends the message that your dealership places equal importance on both new and used car sales teams. It makes it easier for employees in different roles to work together to meet customer needs and expectations and reduces the potential for friction between teammates.

There’s no denying that automotive leads are the lifeblood of any dealership. But seldom, if ever, has there been a dealership that is completely satisfied with its car sales lead quality and quantity. 

Some of the most common questions we hear from dealers revolve around automotive leads and prospecting: Where do qualified leads come from today, how do you get more leads and how do you convert them into sales?

According to research from Foureyes, 39% of the average auto dealership’s leads are organic leads generated by searches or research, 28% are prospects who have come directly to the dealership, 23% are from paid advertising, 9% are from referrals and 2% are from social media channels.

But in today’s marketplace, the best automotive leads are generated by high-quality data analysis that develops actionable insights into each individual prospect, giving dealers the knowledge and tools they need to power their marketing, sales and customer experience management.

In this post, we take a data-driven look at:

• – Who are your dealership leads?

•  

• – What do you know about them?

– How do you connect with them?

Who are Your Leads?

Some auto industry veterans may think of automotive leads as people who have somehow indicated to your dealership that they’re in the market for a new or used vehicle. In reality, that’s only one kind of lead.

According IHS Markit research, there are approximately 9 million in-market consumers who are ready to buy without strong loyalty to a specific brand in 2020. These nomad buyers offer dealerships a massive opportunity when it comes to identifying and engaging auto sales leads.  

To take advantage of this opportunity, dealers need to effectively view every single person of car-buying age in their marketplace as a potential dealership lead of greater or lesser quality. That obviously isn’t a prospect list you can plop down on a salesperson’s desk and tell them to start calling, but it is a starting point for modern data analytics tools like Mastermind’s MarketEyeQ. 

By analyzing a combination of public and private information about the consumers in your marketplace – including from sources such as your own DMS and CMS in addition to OEM and third-party providers – MarketEyeQ identifies the consumers who are most likely to be in the market for a vehicle purchase, presented in a 0-100 Behavior Prediction Score® that lets your sales team easily prioritize the highest quality dealership leads.

What Do You Know About Your Auto Leads?

The challenge isn’t that there isn’t enough data. If anything, it’s that the connection of so many parts of our lives to the digital world means all of us – including the people behind your dealership leads – are generating almost inconceivable amounts of data. 

The total amount of data stored worldwide is predicted to grow 16.6% in 2020 alone, reaching 16.6 zettabytes – 16.6 trillion gigabytes – of data. That’s four times the amount of combined data all humans generated in just 2013, which demonstrates how big “big data” has gotten and how it’s getting even bigger.

When it comes to auto dealerships, some of that data is relevant to automotive lead generation, but most of it is not. The increasingly important challenge is to ensure you’re using the right data to maximize sales lead quality. That’s why Mastermind’s predictive analytics tools rely on high-quality data from IHS Markit, TransUnion, CARFAX and other unrivaled sources to give our dealer partners access to insights from 200 million households, 3.2 billion ownership records and 650 million vehicle records.

How Do You Connect With Your Auto Sales Leads?

When it comes to auto dealership leads, sales and marketing are deeply intertwined. The average dealership spent $554,292 on marketing in 2019, averaging $640 in advertising spend per new vehicle sold. With the added pressure of the COVID-19 pandemic challenging dealers to “do more with less,” it’s critical dealerships be more efficient and effective in their marketing without wasting high-quality sales leads. 

But in the advertising marketplace, you’re not just competing against other dealers. Whether it’s conquest marketing, dealership loyalty retention or other forms of automotive lead generation, your messages are competing with the estimated 4,000 to 10,000 advertisements the average American sees each day. 

This isn’t merely ensuring your marketing spend is aimed at the right marketing channels. Rather, the power of predictive marketing in the automotive industry is seen in its ability to determine which channels are most likely to connect with each individual prospect at the right time – and with the right message to influence their decision process. 

The most successful predictive marketing campaigns maximize the effectiveness of your message by building off each previous campaign. In fact, by creating a personalized experience that nurtures leads through the sales funnel, Mastermind’s predictive marketing solutions help our dealer partners gain up to an incremental 15 conquest sales per month.