Hiring and staffing can be one of the most frustrating and tedious components of life at auto dealerships. And now more than ever, making the right hiring decisions and developing a strategic staffing plan is crucial to keeping up with an ever-changing market. 

Industry research finds employee turnover at dealerships (46%) is more than double the average U.S. employee turnover rate (19.3%). These numbers are even higher when you look at just dealership sales staff, averaging about 80% annual turnover, according to that same report. 

This kind of revolving door can make developing and implementing any kind of business plan next to impossible, much less support the nimble approach that today’s dealership leaders must embrace to strategize for future success. 

Forward-thinking dealership leaders have taken a proactive approach to strategic staffing by raising the bar regarding who they hire, determining the skills and mentality each future team member will need to possess and spending more time vetting candidates to ensure they fit the bill perfectly. 

While every dealership will face unique challenges, in this blog post we outline four strategic staffing best practices for dealerships, including:  

• - Determining the right size staff to create the ideal customer experience

• - Focusing on the future and new opportunities

• - Redefining what it means to be a good fit for your dealership

• - Developing a robust – and authentic – dealership onboarding process for new hires

Determining the Right Size Staff for Your Dealership

When the COVID-19 pandemic began, many dealerships were forced to reduce their staff to cut costs and reduce the spread of the virus. However, as we settle into a full year of “the new normal,” dealership leaders are now asking how they can sustainably restructure their operations to both support long-term success and their team – while still providing an excellent buying experience for customers.

Increasingly thin margins and uncertainties ahead underscore the need for auto dealers to question how many employees are truly needed to deliver an optimal sales experience. 

Studies regularly highlight the potential consequences of understaffing, creating negative morale and impacting a dealership’s ability to deliver effective and speedy customer service. Striking a balance with your dealership staffing strategy is key.

By hiring the correct number of qualified, keyed-in employees, dealers can mitigate the risk of bad reviews and lower NPS and CSI scores. Make well-researched decisions based on your store’s exact needs starting by interviewing your managers and team members to see where they feel spread the thinnest. Ensure you’re taking a comprehensive look at your dealership’s reporting dashboards to look at both individual employee and team performance to uncover opportunities to promote efficiency or identify areas of needed improvement. 

For example, Market EyeQ includes salesperson evaluations that enable data-driven, user-by-user analysis to determine how each of your salespeople is performing, whether on their own or compared to the rest of your sales team. 

Focusing on the Future – Right Now 

This is also the time to begin analyzing which dealership tools and technology empower your team to work more efficiently or automate tasks previously done manually. Look for solutions that help your existing staff do more, such as predictive marketing tools that reduce the time your dealership’s Business Development Center spends chasing down weak leads.  

Ensure every member of your team can confidently use employee-facing technology. Evolving consumer tastes and buying experience demands, in addition to rapidly changing technologies, have made way for new buyer expectations. It’s critical to assess whether your current employees possess the necessary skills to fully adapt to a digital-first retail world alongside your dealership – as well as inspire your team to participate in continued learning to further refine their skills. 

Broaden Your Hiring Horizons

While some of your dealership’s best sales consultants won’t be as effective as digital retailing concierges, they may still possess the soft skills like empathy, attentiveness and emotional intelligence that are key to a successful team moving forward.

With the automotive industry hurdling at lightspeed toward digital retailing, it is crucial to identify the skills – and the types of team members – that will scale with your dealership well into the future.  

Redefining how your dealership identifies and retains talent is more important than ever. 

Ensure your dealership’s hiring managers are exploring recruits with various skill sets and backgrounds. Given this shift to digital retailing, dealers have the opportunity to connect with an entirely new pool of talent they possibly hadn’t considered working for a car dealership in the past. 

The modern dealership can lure great talent from other industries impacted by the pandemic, including tourism, entertainment and hospitality. By taking a competency-based approach to strategic dealership staffing, your team can search for candidates who possess the specific skills your dealership needs, even if they lack formal dealership experience. Outside of being digitally savvy, look for recruits who possess creative problem-solving abilities and those eager to take on a new challenge.

Develop an Effective and Exciting Dealership Onboarding Process

Once you’ve decided on the level of staffing your dealership needs, who to keep on board and established a new criterion for your recruiting efforts, you’re now challenged to keep employees interested and engaged to prevent a new cycle of excessive turnover.

After any new hire, it’s critical for dealerships to have a well-defined onboarding process designed to both quickly get recruits up-to-speed on position-critical processes and inspire their contribution to the overall dealership team. (The same holds true for “reboarding” furloughed employees that are returning.)

While this onboarding process should be unique to your dealership, it’s critical to begin before the employee’s first official day of work. Ensure leaders are aligned on what this onboarding process will look like before it begins to prevent any “awkward downtime” or miscommunication between teams. 

Consider treating day one as a true first day of work as opposed to an introduction into a week worth of paperwork, tours and process meetings. Research finds this sort of structured onboarding results in stronger employee engagement and improved retention.  

As dealers continue to adapt in the new consumer-first era, strategic staffing decisions are more critical than ever. Whether you are bringing team members back or hiring entirely new trainees, developing a staffing strategy curated for your dealership – and powering that plan with the right people, processes and technology – is critical to scaling your business well into the future.

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.

As dealerships from coast to coast are tightening their belts in preparation for uncertain months ahead, many proactive dealers are turning away from expensive third-party auto lead providers and either reallocating the funds or simply cutting budgets for lead generation. 

This may seem counterintuitive – more leads normally mean more sales, right? Third-party leads are plentiful and often come with grand claims from the external provider about how their leads are “ready to buy” and “motivated for purchase.” Oftentimes, these statements refer to a percentage of those leads, and even if these leads are ready to purchase, they’ve likely been sent to multiple dealerships, including your competitors.  

While these leads close at different rates depending on various factors, selling is all about percentages and volume. Closing a low percentage of deals from a massive pool of paid leads is far less cost-effective than closing a higher percentage of internally generated sales leads at a significantly better ROI. For dealerships looking to achieve sustainable success throughout 2021, swapping third party auto leads for sales opportunities generated by high-quality data and actionable insights on each individual prospect is key. 

In this post, we share three steps to ditching third party auto lead providers and generating your own sales opportunities by: 

– Using high-quality data to identify prospective buyers
– Mining the service drive for sales opportunities
– Taking a proactive approach with your BDC 

Using High-Quality Data

The first step to proactively and successfully “cut the cord” from third party auto lead generation companies is to properly gather and utilize high-quality data from within your own dealership’s walls. 

When it comes to auto lead generation, the adage “quantity vs. quality” is largely outdated thanks to modern dealership technology. While some dealerships remain focused on generating and sifting through large numbers of typically low-quality leads, innovative dealers are using modern behavior prediction and automated marketing tools to do significantly more with less.

Instead of manually sifting through large stacks of leads, advanced marketing tools allow dealers to automatically analyze data from their DMS, CRM, sales platform and other datasets to identify and rank prospective buyers predicted to be ready to enter the buying cycle – before they’ve started shopping around.

To accurately identify customers early in their buying journey, or to avoid nurturing a lead who seems like a good opportunity on the surface, but deeper factors render them unlikely to purchase soon, dealers need high-quality, up-to-date data. The data also needs to be relevant. 

A customer’s intention can be determined through a variety of factors, including financial considerations, online buying behaviors, demographic information and more. With so many factors and data sources, knowing what information to analyze is a growing challenge for many dealers. Fortunately, modern dealership marketing tools like Market EyeQ, fueled by data from sources like IHS Markit, CARFAX, Transunion and other unrivaled sources, empower dealerships to effectively mine their entire local market for sales opportunities. 

Identifying Service Drive Opportunities

Dealers have long known their service department can be a critical source of sales leads. But, simply treating every service ticket as a potential sale is as ineffective as sifting through stacks of third-party leads. As with their competitor conquesting efforts, dealers can maximize the efficacy of their service-to-sales process by taking a more proactive, data-driven approach. For example, Market EyeQ's Service Conquest feature empowers our dealer partners to convert service customers into new car buyers at a 4x higher activation rate than the competition.  

Breaking down the barriers between sales and service is the first crucial step to discovering proactive success at your dealership. Some dealerships employ a service-to-sales liaison, either dedicated as a go-between or as an extension of the BDC, to identify, engage service-to-sales leads using insights from their CRM, maturity manager or data mining tool. With increasingly thin margins, if a dedicated salesperson is not an option for your dealership, arming every service technician with the training and technology needed to carry out this process is critical. 

With the number two influence on brand loyalty (only after the sales experience) being a customer’s maintenance and service experience, and loyalty customers typically generating the most profitable sales, it’s critical to utilize your service drive to build loyalty and proactively identify when customers are ready to re-enter the sales cycle. 

Proactive dealerships approach building customer loyalty by utilizing advanced marketing tools and customer data to serve as an ongoing customer concierge through well-timed service alerts and offers. These same tools allow dealers to prioritize and engage the buyers predicted to be ready to buy again soon. No matter their reason for buying, delivering service customers specific messaging that motivates them to purchase before they enter the buying cycle is crucial to nurturing auto sales leads through their buying journey and maximizing ROI. 

Proactive vs. Reactive BDC Strategy

A proactive strategy shouldn’t be confined to the sales floor and service drive. Many dealers skip the BDC, assuming their role is to make as many calls as possible to the third party-generated leads, waiting for the proverbial wide net to capture some customers ready to buy. With more options than ever when it comes to where and how to buy, staying ahead of customers has never been more important – and never been more possible. 

Industry research finds 80% of car buyers start their journey online. For a BDC to effectively get ahead of online buyers and engage them before they begin shopping around, being able to identify the behaviors and influences that precede a purchase are key. Here, advanced marketing tools are irreplaceable, able to both identify pre-purchase consumer behaviors and generate personalized messaging based on the specific factors predicted to influence a prospect’s purchasing decision. 

Turning away traditional, paid third party dealership leads in favor of in-house lead generation may seem to be counterproductive at first glance, and in truth, it can be challenging. But when high-quality data is combined with a proactive strategy and buy-in from across the dealership, the results will speak for themselves.

It’s rare to find a dealership completely unaware of the value of their service drive. Parts and service sales currently account for 12.5% of new vehicle dealership’s total sales, according to NADA’s latest report. However, few are truly maximizing all the profitable opportunities available in the service drive, discoverable only by connecting a dealership’s service with their sales teams. 

In this blog post, we outline three dealership service drive best practices to drive vehicle acquisitions, conquest sales and loyalty through the service drive by:

• – Breaking down the barriers between service and sales departments

• – Building an effective data-driven service-to-sales process

• – Identifying and proactively engaging service-to-sales prospects to drive sales and build long-term customer relationships 

Break Down the Barriers Between Service & Sales

Many service drives remained bustling during the early days of the pandemic by serving as hubs of constant customer interaction while sales floors fell quiet. In 2020, sales and service revenue decreased its average share of total dealership revenue by only 0.3% compared to 2019, according to NADA. 

However, as customers return to the market quicker than initially anticipated, driven largely by OEM incentives, dealers are presented new opportunities to drive revenue through an effective service-to-sales process. 

This starts with breaking down the barriers between your service and sales departments. Many auto dealerships find success by deploying a dedicated service-to-sales manager to identify and engage service-to-sales prospects. Every dealership’s needs are different, so while considering this dedicated service-to-sales staff, assess the value by asking questions like how many repair orders your service drive completes per day and how robust is your current service department.

With many auto dealers strapped to “do more with less,” a dedicated service-to-sales manager may not be possible. In this scenario, many dealers are finding success by utilizing their BDC to proactively identify potential service-to-sales prospects, engaging those prospects and nurturing them through the car buying cycle. 

To have an effective automotive service drive sales process do this effectively, your BDC can’t simply view every upcoming service appointment as a potential sale. Instead, leverage insights from your CRM, maturity manager or data mining tool to quickly and easily identify your best service-to-sales opportunities. 

Solidify Your Dealership Service-to-Sales Process

Dealerships waiting for customers to decide when and where they want to shop – or have their vehicle serviced – are playing a game of chance with their profits, ignoring tremendous opportunities that come with proactively identifying and engaging prospects. In this same way, building an effective automotive service drive sales service-to-sales process hinges on a dealer’s ability to proactively identify and engage potential service-to-sales prospects. 

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. Behavior prediction technology tools enable dealers to do this by analyzing all the available data in a dealer’s CRM, DMS and sales platform to predict which customers are most likely to be shopping soon. 

Forward-thinking dealerships using these tools to proactively engage potential buyers are empowered to meet customers where they are with the right message at the right time, rather than waiting and hoping that customer comes to them. It’s in this way Market EyeQ's Service Conquest feature converts dealership service customers into new car buyers at a 4x higher activation rate than the competition. 

Create and Capitalize on Dealer Service Drive Loyalty

One of the most important aspects to any dealership’s long-term success strategy is creating and capitalizing on customer loyalty. Loyalty customers are always the highest profitable sales, and keeping a customer long-term means keeping them from becoming a conquest victory for your competition. OftentimesOften times, this loyalty is built in the service drive, with the number two influence on brand loyalty (only after the sales experience) being a customer’s maintenance and service experience. 

Much like identifying service-to-sales prospects, progressive dealerships are taking a proactive approach to building customer loyalty in the service drive to increase service department sales. By utilizing behavior prediction technology, auto dealers can maintain consistent communication with buyers and build long-term customer relationships through convenient service alerts. 

By serving as an ongoing customer concierge through well-timed service alerts and following dealership service drive best practices, dealers can build the type of service experience that keeps customers coming back and prioritizes the buyers who are most likely to re-enter the sale cycle soon. By proactively identifying and engaging loyalty customers before they enter the sales cycle, dealers who market with Market EyeQ increase retention sales up to 15%. 

While breaking down the barriers between your sales and service teams may seem daunting, the potential benefits that come along with solidifying this automotive service drive sales process in your dealership can’t be ignored. By building a proactive service-to-sales process, supported by data-driven tools and best practices, dealers are empowered to take advantage of additional sales and acquisition opportunities while building long-term loyalty.

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%.

Faced with tightening margins, low vehicle inventories and a narrowing opportunity to rebound in 2020, auto dealers are looking for additional ways to maximize dealership profitability at every step.

This begs the questions: How many times can you make a profit off a single vehicle in its lifecycle? With excellent dealer inventory management strategies and strong coordination between new and used sales, service, finance and marketing, the same car can generate profits for your dealership repeatedly.

In this post, we share how to maximize dealership profitability by focusing on cultivating your dealership’s homegrown inventory and best practices for generating additional profits at every rase, including:  

• – Original new vehicle sale

•  

• – Vehicle service

• – 

• Acquire the vehicle as trade-in to enable the next new sale

• – Certified pre-owned (CPO) sales and service

Homegrown Profits Start at the First Sale

Dealership profitability through homegrown dealership inventory starts with maximizing ROI on the initial new vehicle sale. With little flexibility to raise prices, this means minimizing costs, with many dealers looking to improve both the efficiency and efficacy of their marketing to make an impact.  Mastermind’s dealer partners set the bar for this, achieving the lowest cost-per-sale in the industry at $115, versus the $624 industry average.

They do this in part by maximizing lead quality through our Behavior Prediction Score®, which empowers dealers to identify prospective buyers before they enter the buying process. From here, our dealer partners are empowered to engage prospects with effective predictive marketing solutions that build off each other to convert high-potential new and pre-owned car buyers faster. The result is 15x ROI over traditional models. 

Service: Maximize Customer Experience, Loyalty and Profitability

The sales cycle doesn’t end after a buyer converts, and neither do opportunities to maximize your dealership’s profitability, especially with your dealership’s inventory strategy. The service drive is a key component of the customer relationship – and excellent service interactions benefit your bottom line beyond solely service revenue. Industry research finds 74% of buyers who have their car serviced by the dealership of purchase are likely to return for their next purchase, versus only 35% of those who have their cars serviced elsewhere.

Delivering an exceptional customer experience in the service drive is critical to defending against competitor’s conquest efforts, as well. Gartner research found truly helpful customer service interactions create an 82% chance a customer will stay with a company when a competitor attempts to conquest them.  

Even if you didn’t sell the car to your service customers, service-not-sold conquest is also an important contributor to homegrown dealership inventory management. For this reason, service notifications are critical, as is informing service customers of changes to their vehicle’s trade-in value and updating them on any attractive trade offers available at their time of service.  

Market EyeQ’s Service Conquest capabilities help automate this process by identifying high-value sales prospects in your service drive and mapping them to relevant offers and available vehicles in your inventory, tailored to their unique wants and needs. As a result, our dealer partners report converting service customers to new car buyers at a 4x higher activation rate than our competitors due to Market EyeQ’s 99.8% VIN match rate.

Acquire as Trade-in and Sell New (or Pre-Owned) Vehicle

More than leads are acquired in the service drive. According to NADA, roughly two-thirds of car dealership inventory on the used vehicle lot comes from trade-ins, with 43% from new car purchases and 22% used. That’s a very clear reminder of the importance of trade-ins to supply a dealer’s pre-owned car inventory, but also their critical role in powering new car sales.

To make the most of both opportunities, your fixed ops and variable sales teams need to work in tandem, working toward collective goals and allowing for a more seamless customer handoff. For this reason, many dealers are unifying their new and used sales teams on a single sales platform as a best practice, improving visibility, coordination and dealership inventory management. 

This approach allows auto dealers to ensure their service drive successfully acquires in-demand trade-in makes, models and trim packages to make your car dealership inventory more profitable. Dealers who leverage Market EyeQ can take this approach even further by automating the process and prioritizing prospects with in-demand and potentially highly profitable trade-ins.

Don’t Sink Your Auto Reconditioning Profits

According to NADA, the average dealer’s reconditioning costs more than doubled between 2009 and 2017, from $288,479 to $635,453. How much of that was a good investment in dealership inventory, and how much of it was chasing sunk costs?

Auto reconditioning decisions in a dealership are critical to profitability. By utilizing the same data-driven tools and processes used to identify profitable service-to-sales leads to analyze insights like a customer’s maintenance and overall vehicle history, dealers can more effectively predict reconditioning costs and prioritize their more valuable opportunities. 

Keep Dealership Profitability High With CPO ROI

Once reconditioned, dealers are tasked with flipping that pre-owned vehicle before it spends too many days on the lot. This is where predictive marketing tools, such as Market EyeQ with its pre-owned functionality, empower dealers to maximize the profitability of their used vehicle sales by identifying the best pre-owned prospects and automatically mapping them to vehicles on your lot. 

This make-model-trim level approach revolutionizes dealership inventory management and allows you to optimize car dealership inventory turnover ratio.

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.