You may be familiar with the saying, “Never let your emotions overpower your intelligence.”  This advice is smart and logical, but how many people follow it?

When it comes to car buying, not very many. Emotions often take center stage. 

Don’t get me wrong. There’s nothing inherently bad about putting emotions first. Consider a couple buying a new car because they are expecting a baby. Or parents buying a car for their teenager who’s going off to college. These are big, emotional decisions.

Unfortunately, many salespeople focus on selling vehicle features instead of meeting the emotional needs of customers. The typical qualification process is often dismal, with questions like “How are you today?” and “Are you looking for a new car today?”

It’s natural for salespeople to slip into the path of least resistance. However, tapping into customer emotions can help you sell more cars. Here’s how to get into an emotions-first mindset:

Operate as a trusted advisor. A study by Urban Science in conjunction with Harris Poll found that 81% of shoppers trust the information they receive from a franchised dealership, and 72% are influenced to work with a dealer based on staff experience. The salesperson is becoming a trusted advisor. That’s what our entire industry has hoped for. When you approach customers, be mindful that they are seeking expertise and vehicle knowledge.

Know that most buyers are undecided at the beginning of the shopping process. According to Autotrader, 6 out of 10 customers are open to multiple vehicle options when they first begin the shopping process. Uncover the emotions driving a purchase and you have a lot of opportunities to steer them towards the right vehicle on your lot for their needs.

Answer the customer’s questions first. We all know that today’s shoppers go online to do initial research before they pick up the phone or show up on your lot. A little bit of research often leads to a lot of questions. Answer every question and take notes in your CRM before you ask for the appointment or suggest a specific vehicle. This shows you’re there to meet their needs, not simply to sell another vehicle.

Focus on vehicle benefits, not features. Once you’ve answered every question and know the driving motivation behind a purchase, don’t fall back on selling vehicle features. Customers want to know how a vehicle will benefit them. Will it keep a baby safe? Will it help a teenager spend less money on gas? You get the idea.

Talk about how a car feels. The way a car feels to drive is important. Customers have to enjoy driving a car as much as they enjoy looking at it. Talk about how a reverse camera will instill a feeling of confidence. Or how plush seats and a smooth ride spark joy and happiness during a long commute.

Now that you’re focused on uncovering emotional needs, you can fine-tune your needs assessment process. A solid process is key to uncovering what is truly driving a customer’s purchase. Here is a sample of questions to ask:

 - Are you replacing a current vehicle or buying a second vehicle?

 - Are you buying a vehicle for someone else?

- What’s important to you in this new vehicle? What specific needs do you have?

 - What have you looked at so far? What did you like/dislike about that vehicle?

 - What’s your buying time-frame?

 - How much are you looking to spend?

Put on your investigator hat and follow up on every answer. Buying a car for a teenager going away to college? Okay, great. How often will your child be driving home? Will they have covered parking? Will they be paying for their own gas? Make sure to take notes and record everything in your CRM as the building blocks of a long-term relationship.

Keep in mind that most people don’t mind talking about their needs. In fact, it will probably be refreshing and welcomed. This is how you get customers to paint a picture of what they want. This makes it much easier to sell them the vehicle they need.

For many buyers, a vehicle is an emotional purchase. Tap into those emotions with a solid needs assessment process that uncovers the customers’ why, and you’ll sell more vehicles.

We all know that a sale is just the beginning of a customer relationship. But how do you manage that relationship so customers not only come back for service but also repeat sales?

Right now, dealers are focused on the here and now. I get it. Everyone is scrambling for used vehicles to meet the surging consumer demand as OEMs rebound from the slowdown in manufacturing. Used car inventory is low and the value of a trade has never been higher. Everyone is worried about coming out on top of the current economic crisis.

Retention has understandably been on the back burner for many dealers. But as we look forward, whatever the timeframe, we will return to a sense of normalcy and customer retention is a key part of ensuring your dealership’s success for years to come.

The good news is that dealerships are doing a better job of converting sales customers into service customers. According to the J.D. Power 2020 Customer Service Index Study, dealers capture 88% of customers’ annual service visits in the first three years of ownership vs. non-dealers. This is up from 79% in 2015. However, defection to the aftermarket occurs rapidly once warranties expire.

There are some simple, key practices you can put in place to inspire customer loyalty and keep retention rates high. The following list will help you get the customer back into the dealership for that first service, second service and all the way to their next new vehicle.

• When you deliver the vehicle, use your service lane software to set the first service appointment for 3 months in the future. Emphasize to the customer how important this service is in making sure the vehicle is performing at its best. Schedule a reminder call for your service advisor or BDC in your CRM. You wouldn’t believe how many dealerships forget to remind customers of these crucial appointments. Schedule that reminder and get it done. Customers lives get busy. If you want that first appointment, you have to earn it.

• Process Improvement: The service advisor and the sales representative who sold the car should greet the customer when they come into your shop. This personal attention shows the customer that their business is valued and appreciated. If a customer wants touchless drop-off, have the sales rep give a welcome call instead.

• Prove that you want the customer’s business by offering options for their convenience. This may include vehicle pick-up and drop-off, and/or offering a loaner vehicle. Make life as easy as possible for your customer. They will remember and appreciate it.

• Use technology to the customer’s advantage. Implement online scheduling, enable a mobile platform so service advisors can text customers and get fast RO approvals and allow customers to receive invoices and pay via text. Again, it’s about making the process as easy as possible so your customers want to come back.

• Change your language when setting the next service appointment. Don’t ask for the next appointment. Let the customer know that based on mileage, a certain date in the future is the best option to keep their vehicle running at peak performance. Then ask what time on that day works for them. The customer will be more likely to schedule because you’re counseling them on what is best, not asking for the appointment. Change your words, change your results.

• Answer your phones. Customers get frustrated when they want to schedule an appointment or have a question, but they can’t get anyone on the line. Dedicate one person during your busiest times to pick up the phone. This person’s sole responsibility is to make sure every call gets a live voice on the other end. Can’t make this happen with current staffing? Consider a third-party BDC service. You’ll close more service business and keep customers happy when every call is picked up, handled, and routed properly.

• Stay top of mind. Targeted, cross-channel marketing is critical to stay on a customer’s radar. Use your CRM to create targeted customer lists based on mileage, vehicle make, etc. Then create messages to be sent automatically on a pre-set schedule. Don’t inundate customers with messages and don’t make everything about a sale. Seasonal travel tips, holiday greetings and birthday cards go a long way toward cultivating genuine relationships. 

• Create a clear process for equity mining. The ultimate goal of a vehicle sale is to turn that customer into a service customer and then into a repeat buyer. The service drive is a great place to equity mine for the used vehicles you need and move customers into their next new vehicle. But you have to have a process that makes sense. Don’t approach a customer who bought within the last 12 months and encourage a trade-in! Do dedicate an equity mining expert to review all service appointments for the coming day and identify those customers with equity in their vehicles that you can move quickly for higher profit. Have the expert create a written trade-in quote for every eligible vehicle and email, text or hand it to the customer in the service drive. Then have that expert or your BDC follow-up. As I’ve said in previous blogs, a clear equity mining process combined with a strong BDC delivers an ROI of 10 to 1. For every $1,000 you spend, you’ll get $10,000 back.

Retention may have slid to your back burner right now, but it still deserves your attention. Things will get back to a sense of normalcy, and retaining customers is still your best bet for long-term success in your market.

The vehicle sales forecast for 2020 looks strong, with S&P Global Ratings expect sales to hit a relatively healthy 16.8 million units. But earning your share of this market depends a lot on how well you manage your inventory: what you stock, when you stock it and how quickly you can get vehicles off your lot. The following inventory strategies will set you up for a profitable New Year.

Clear out the old and bring in the new.

Don’t waste valuable floor space with aging 2019 models. Establish programs, processes, incentives and aggressive targeted marketing to push out the old and make way for the new. Used advanced search functions in your CRM to create a targeted list of customers who purchased a vehicle at least two years ago and make another list of every unclosed lead in the last 90 days. Send a mailer or email and follow up with a BDC call to net up to a 24 percent higher ROI, according to CJG Digital Marketing. 

Lean on your inventory management solution to identify your best new vehicle sellers so you don’t overload your floor. Your solution should also offer real-time updates and market data so you can easily manage your inventory and price vehicles correctly.

Create a pre-owned stocking plan.

Focus on stocking the top 10 vehicles that move fast and have maximum profitability. To be successful at this, you must also pay attention to seasonality. For example, a 2x4 pick-up in the north won’t sell in the winter but in the south, those trucks sell all year long.

We all know vehicles are a depreciating asset. You lose money when you buy the wrong car, overpay for the right car, price vehicles too high for your market or fail to retail every unit in a predetermined time frame. Lean on your inventory management tool and market analytics to avoid these common pitfalls that cost you money.

Eliminate pre-owned “lemons.”

Every dealer has pre-owned vehicles that don’t move and become a liability. Investigate why they aren’t selling. Is the car dirty? Is there an odd smell? Is it stuck in the back of your lot with no visibility? Or is the dealership down the road offering better pricing? Solve whatever problems you can and then market aggressively. Your CRM should match current inventory to customers searching now – or in the past – for similar vehicles. Use that information to send out targeted marketing.

If a car still doesn’t move, cut your losses and sell at auction before you’re in a position of negative equity. Most importantly: Learn from these lemons. If a vehicle doesn’t move or bring in profit, don’t buy it again. Eliminate the problem up front so you don’t end up in the same situation again.

Stock strategically.

Sourcing pre-owned vehicles has become more difficult for dealers with companies like Carvana scooping up a lot of stock. Be very selective at auctions and get aggressive in your store to win trade-ins.

Equity mining is a smart way to get the vehicles you need at a cheaper price than at auction. When combined with a strong BDC, equity mining is a proven strategy that delivers an ROI of 10 to 1. In other words, for every $1,000 spent, you get $10,000 back.

Equity mining in your service lane is an especially sound strategy. After all, you see cars there all day long. You know the cars you service, the problems they have, and their service history. There are no condition surprises and no transportation costs. The benefits here are twofold – you acquire an inexpensive pre-owned vehicle, plus you move the customer into a new vehicle, giving you a sale.

Keep in mind that to reap the benefits, equity mining cannot be a part-time job. You should have a dedicated salesperson who understands what makes a customer a good prospect. A scattershot approach to boost sales at the end of the month will likely only alienate your best service customers, so make sure you implement a solid strategy to keep the process moving all month long. 

This new decade holds a lot of potential for dealers. Set yourself up with a sound inventory strategy now and reap the benefits all year – and decade – long.

Good Selling!

In this episode of Freebie Friday, CDK Global VP of Sales Bill Wittenmyer shares tips on how dealers can get the most out of their CPO programs.

Are the headaches associated with bringing vehicles up to certified pre-owned (CPO) program standards worth it? For dealers, there’s certainly more work, money and time involved with finding, reconditioning and certifying vehicles for CPO programs.

On the surface, it may seem like the higher margins don’t really justify the higher cost of reconditioning and manufacturer fees involved.

But the financial equation isn’t that simple. The fact is, CPO programs attract a certain type of customer that is willing to pay a bit more for a used vehicle in good condition, along with a warranty, roadside service and other perks. This is exactly the type of customer you want in your database, and you have to look at the long-term value of that customer.

Additionally, CPO vehicles are typically sold with 12-month to 24-month warranties, which means you will have several opportunities to cultivate a service relationship with a new customer. What is that opportunity worth?

The key to making a CPO program successful is deciding that it’s going to be successful. Like any investment, the secret to maximizing ROI lies in your ability to streamline operations and create process efficiencies. This includes sourcing, reconditioning and marketing your CPO vehicles.  

Don’t Rely on Auctions

To maximize CPO gross margins, it’s important that you don’t pay too much for a vehicle to begin with. Sometimes you can find a good deal at an auction, but many times you can’t. Your used car manager should know how to spot a good deal and when to pass. If he doesn’t know, help him create a formula.

The best source of vehicles for a CPO program are the cars you have already sold. Do regular database searches to find vehicles that fit your manufacturer’s criteria. With the addition of an equity mining tool, it’s easy to identify former customers who are in a position to trade-in their vehicle.

Additionally, set up a vehicle exchange program in your service lane. Creating a process to approach and make offers to service customers will net a steady supply of vehicles for your CPO program.

Improve Your Recon Process

If you’re serious about maximizing the profitability of your CPO program, an efficient reconditioning process is an absolute must. The ability to track vehicle progress, set alerts at every stage and hold personnel accountable for deadlines is necessary.

One of the biggest benefits of a CPO program is that the vehicles sell quickly and deliver higher grosses. But you can’t sell a car that’s sitting in your shop. Every day it sits, you lose gross. In the event of a service backlog, you’re probably better off paying techs overtime so you can get your CPO vehicles turned in a timely manner. Do the math.

Promote Your CPO Program

Think of your CPO program as an investment. You have created an efficient process to source vehicles at a good price and push them through recon. You’ve paid the manufacturer fees, and you have a supply of excellent CPO vehicles on your lot ready to be sold.

The last piece needed to maximize your ROI is marketing. There’s demand for your product, but people can’t buy something they don’t know exists.

Many dealers are afraid to promote their CPO program, believing that some of their customers will buy a CPO instead of a new vehicle. You know what? They’re right.

At some point during the purchase process, some new car shoppers will decide that a CPO is a better option for them. That decision will be made by your customer based on their financial situation, not on anything your salesperson did or didn’t do. When a customer comes to this conclusion, your best salesperson will not be able to dissuade them, nor should they even try.

I’ve talked a lot about how the role of the salesperson is changing in the auto industry. We should not be selling; we should be helping the customer make a decision that’s best for them. If your salesperson tries to push a new vehicle that a customer doesn’t want, there’s a good chance that customer will leave and buy a CPO from your competitor.

Wouldn’t you rather get the CPO sale instead of no sale at all?

First, the margins are higher on CPOs so you’re netting more profit overall. Second, only a certain percentage of new car buyers will decide to buy a CPO, and you’re not losing them. You’re still selling a car and gaining a potential service customer. CPO sales should be celebrated, not treated like red-headed stepchildren.

Third, promoting your CPO program with marketing campaigns is going to create more new opportunities than it will ever cause you to lose. Think about consumers in your area and/or in your database who are still driving 2008, 2009 or 2010 vehicles. They are probably ready to upgrade soon. Chances are they won’t be buying a new vehicle, but they may be very excited about the opportunity to purchase a CPO. To them, a 2015 vehicle is new.

Finally, establishing your dealership as a trustworthy source for CPO vehicles is an extremely appealing value proposition for many consumers.

Don’t be afraid to invest in your CPO program. If you stay committed and create efficient processes, the gross profits returned will add substantially to your bottom line.

Sales isn’t a spectator sport! In this Freebie Friday quick tip, ELEAD1ONE Partner Bill Wittenmyer shares the importance of getting in the game and taking control of your destiny – and your paycheck!

ELEAD1ONE partner Bill Wittenmyer shares an effective, easy-to-implement strategy for maximizing profits and replenishing the pre-owned vehicle inventory at your dealership. Hint – it starts with service advisors. http://www.elead-crm.com