*This article previously appeared in the Reynolds and Reynolds FUEL monthly newsletter*

By Cory Coler

QR (short for Quick Response) codes have been around since 1994; however, it wasn’t until almost three decades later they became more of a solution and less of a novelty. In fact, QR codes are being used more frequently by retailers now than at any other point in history.

The reason for the surge? Growing demand for mobile technology — fueled by the pandemic and the need to provide a safe and hygienic customer experience — has propelled touchless options. QR codes are no longer just a convenience. They provide solutions to problems we face in many retail environments today.

What are the benefits of QR codes?

Hygiene

Hygiene is one of the primary reasons QR codes are seeing such high interest right now. It’s dawning on consumers everywhere that contactless business interactions are the best way to maintain a safe distance and stay healthy. A great example of this is the QR code menu in restaurants. You’ve likely seen them — usually a small sticker or laminated QR code on your table. These replace the single filthiest thing you can touch at a restaurant: a paper menu. (I’m talking filthy as in 185,000 germs per square centimeter.)

Accessibility

Smartphone and recent QR code statistics show 91% of iOS devices have a built-in QR code scanner (Android isn’t too far behind). As older devices are retired and taken out of rotation, that number continues to grow. A study done by Juniper Research suggests 1 billion smartphones will have QR code access by the year 2022. Many people are already walking around with the ability to scan a QR code in their pocket. Don’t believe me? If you’re an iPhone user: simply open your camera app, point the camera at the QR code below, and tap on the notification that pops up. Voila!

Versatility

QR codes have many different uses. They can power anything from simple business cards to more complex touchless payment systems. They enable Wi-Fi authentication, stand in for printed airline boarding passes, and can even be used for service appointment check-in. They are quicker and easier to use and packed with important data. This means less manual entry, less duplication of information, and less room for human error.

Improved Customer Experience

Let’s get specific and look at your service check-in process… By incorporating QR codes into this area of your dealership, customers don’t have to key-in any numbers, wait in a long line, or meet with an advisor face-to-face to signal they’ve arrived for their service appointment. Giving customers the option to check-in using a QR code not only benefits them, but is great for operations as well. It streamlines your check-in process, reduces friction at the check-in counter, and allows advisors to spend more time assisting those who truly need help, which leads to more personalized customer experiences.

Faster Service

Giving customers the option to use a QR code makes for faster service and response time, which leads to more satisfied customers and ultimately, higher backend profits. Saving five minutes per customer may not seem like much of a difference; but, after 20 customers, that’s almost two hours of saved time and labor.

It’s no surprise consumers are more satisfied with businesses who are mobile-friendly, especially since many remain cautious about their health and safety. But more than that, using QR codes in different areas of your business, like the service check-in process, provides a level of digital convenience customers are used to in their other interactions. And, it elevates their experience with your dealership. It’s time to say goodbye to long lines and wasted time… and hello to the flexibility and convenience only offered through QR codes.

About the Author

Cory Coler is a member of the fixed operations product planning team at Reynolds and Reynolds. He began his career in the automotive industry in 2001 at a Toyota retailer, becoming an ASE Certified Advisor and Toyota Certified Assistant Service Manager. In 2005, he joined Reynolds’ Service Price Guides (SPG) department in Tampa, Florida and quickly became a subject matter expert for the product. In 2014, he transitioned to his current role in Product Planning where he is responsible for the enhancement and design of several fixed operations applications.

*This article previously appeared in the Reynolds and Reynolds FUEL monthly newsletter*

By Todd Polak

Running a successful business is no simple task. It requires detail, planning, and strategy. And when you put it all into action, your dealership’s people, processes, and technology must work together to be your best.

However, time and time again I see dealerships that claim to be focused on long-term success forget one of the most important pieces of that effort – reporting.

Whether they are using Excel spreadsheets or building their own in a reporting tool, they are relying on a method that doesn’t align with the long-term success they’re striving for. Simply put, the tools are in place, but the strategy is missing.

The truth is, the right reporting can have a big impact on business success. It means the difference between simply seeing your gross is down this month and seeing a way to fix it. Or finding out how much you profited on a sale versus understanding its true profitability by looking at the entire lifecycle of the full deal.

Especially when you implement technology with a profit-centric focus, reporting should be the first place you turn when looking to maintain long-term profitability, success, and efficiency.

Here are 3 keys to success that take your reporting to the next level and allow you to make more strategic business decisions.

1. Have access to accurate and key business information at any time.

If it takes a day, a week, or longer to view a report, you’re at a disadvantage. Not only is the information no longer current, someone is spending valuable time putting it together when their expertise could be used in better ways.

You need already-built reports you can access in a matter of seconds. Timing is everything, right? When you can see how your dealership is performing today, good or bad, you have the ability to make strategic decisions to impact it.

Whether you’re in the dealership or on the go, being able to see what’s holding up contracts in transit, which open ROs should be closed, or the status of unbooked deals gives you the visibility to hold people accountable and run a more profitable business.

2. View reports that provide insight, not just numbers.

Looking at a spreadsheet can be overwhelming or confusing. The more data you have, the more crowded the report, and the harder it is to take anything away from it.

When it comes to building your reports in a tool, you might have a little more insight into the basics. However, it shouldn’t be your job to know how and where to manipulate the numbers to see the information you want. You could be missing important hidden trends that you don’t know how to find.

Reporting is only as useful as the takeaways you can get from it. To take your reporting to the next level, it must be presented in a way that is easy to digest and understand. No confusion, no hidden trends.

Using colors and signals to call out problems and successes, drill down capabilities that connect your data, and intuitive reports that know what information to combine all allow you to understand your performance, not just review it.

3. Identify profit opportunities with ease.

Being able to see where your dealership’s profit opportunities are is a huge advantage when trying to run your most profitable business. But, you can’t have opportunities without access and insight.

Without access to reports in seconds, the profit opportunities would be behind you, in the past, unattainable. And if you take away insight, sure, you might be able to see your reports in seconds, but that means nothing if the data is confusing.

You see, when you can combine access and insight, you have a reporting tool that shows profit opportunities you can actually leverage. It’s one thing to review information, but what sets you apart is the ability to act on it.

Effective reporting can show you what is beneath the surface. It knows what to look for and where to find it. No one has to spend time compiling anything.

Therefore, opportunities like the profit potential of sending deals to your best F&I manager are easy to see. With information like that in mind, you can be strategic about which deals go where and end the month more profitably.

Conclusion

Reporting is more advanced than ever; now it’s time for you to capitalize on what it has to offer. Although your business may be successful today, the icing on the cake is having a reporting solution on your side to provide you the access, insight, and opportunity to run your most profitable dealership yet.

About the Author

Todd Polak is a product planning manager with Reynolds and Reynolds. He is currently responsible for business employee management applications, GAS, security management, and general systems. He joined Reynolds and Reynolds in 2012, working with the remote software implementation department specializing in accounting and payroll products and installations.

*This article previously appeared in the Reynolds and Reynolds FUEL monthly newsletter*

By Tim Eckert

With the growth of online and contactless payments, businesses everywhere are providing efficiency and convenience to customers by adopting an online payment system. In order to get customers to pay online, they need to be made aware you offer online payment options. If you don’t promote it properly, you may miss out on opportunities and even end up losing money down the line.

Here are five things you can do to encourage your customers to pay online:

1. Use signage in the dealership. Post eye-catching signs around the dealership that make your customers aware of the different payment options. You can also staple a flyer explaining online payments to customer ROs or invoices. Many customers are interested in paying online but are simply unaware that they can do so. It is your job to bring about that awareness.

1. Promote the security of online payments. It is understandable that customers think twice before paying online. Therefore, it may take some convincing to make your customers comfortable with online payments. Let them know that it is safe by promoting the ways their information is protected, like encryption of card data and secure vaults that mask card information from malware. You can also display this security information in your store or staple it to ROs and invoices.

1. Use express check-out lanes for customers who paid online. Some people are driven by incentives and time-based rewards. Set up an express check-out lane so that customers who have paid online can come in and complete check-out in a matter of minutes.

1. Let your other solutions help. Use your CRM to send emails to service customers encouraging them to pay online and explaining the payment process. Include links to the payment portal so they can easily get there.

1. Motivate your employees to suggest online payments through contests. Word of mouth is your most powerful tool. If you’re not seeing an increase in online payments, this may mean there is room for your employees to do more to excite your customers. Run a contest in your service department that awards service advisors based on the number of online payments their customers make. This creates incentive and motivates employees to discuss online payments with customers.

By following these tips, you will excite your customers about the online payment option and offer them a quicker, more positive experience in your dealership.

About the Author

Tim is a Product Planning manager at Reynolds and Reynolds for the ERA-IGNITE platform, Business Office applications, Document Archiving solutions, Networking solutions, and ReyPAY®.

*This article previously appeared in the Reynolds and Reynolds FUEL monthly newsletter*

By Brad Schaefer

It’s common for dealers and vendors alike to regularly revisit best practices for pre-owned sales. Everyone wants to unlock new ways of capturing some additional profit!

What’s easy to overlook is what goes on before a used vehicle ever makes it to the lot: the reconditioning process.

The national average cycle time for reconditioning a vehicle is 12.2 days – that is, it takes nearly two weeks from the day a vehicle is acquired to the time it’s ready to go on the lot. Most dealers have a hard inventory turn time in the range of 45-60 days, meaning your salespeople have a month to a month-and-a-half to sell the vehicle before you wholesale it.

This has been the norm long enough that, on the surface, most dealers probably don’t see an issue. That’s just the business. If you have a decently performing sales staff, the process, while imperfect, seems to work as well as it possibly could, right?

Wrong. The truth is, you lose significant profit opportunity every day a vehicle spends in reconditioning, and it turns out that several days’ worth of reconditioning time is totally unnecessary.

The Time and Money Lost in Reconditioning

How does this loss occur? Reconditioning is a dealership-wide process riddled with inefficiencies and opportunities for delays and bottlenecks. A few real-world examples include:

A trade is not properly stocked in.

A wait in deciding if a vehicle should be retailed or wholesaled.

Technicians can't get to the inspection because customers' vehicles are considered higher priority.

Delayed approval for requested repairs.

Holdups in performing the repairs themselves.

Waiting for back-ordered parts.

Waiting on outside vendors to complete their jobs and pick up or drop off vehicles.

Fixed ops personnel simply forgetting about the vehicle altogether because there's no customer asking about it.

These problems are exacerbated by the fact that reconditioning is a multi-department effort that remains manual, disjointed, and often out of sync. There’s back and forth and finger pointing due to a lack of transparency. There are no metrics for tracking how effective each step is. And let’s not forget a vendor’s role in the process: They typically don’t provide services on-site, and too often your priority isn’t their priority.

What’s the true cost?

So, what’s the true cost of a manual, inefficient, time-consuming reconditioning process?

It’s estimated that every day added to the reconditioning process is another $50 lost per vehicle. If your dealership is average, running a 12.2 day recon cycle time, that’s $610 total per vehicle.

Let’s assume you move 100 used vehicles through the recon process every month. That’s $61,000 lost monthly because of the recon process ($732,000 annually).

Or maybe your dealership hits a couple of roadblocks during the process – a rescheduled vendor pick up, delayed parts delivery, busy employees – and your cycle time gets pushed back another 3 days. That’s another $150 per vehicle, $15,000 per month, $180,000 annually.

You can start to see how these delays really add up!

Overcoming These Obstacles

The pitfalls built into the reconditioning process – manual, disjointed, prone to error and delay – may seem insurmountable. Fortunately, focusing on your processes and diligently tracking them makes it possible to implement impactful change.

Imagine a single, intuitive application governing the entire process from beginning to end. It tracks every vehicle, electronically dispatching jobs and automatically assigning vehicles to the next department as jobs are completed, providing a digital platform for managers and vendors alike. Perhaps most importantly, it reports live cycle times so you can spot the bottlenecks in your process in real-time.

When it comes to maximizing profit on your pre-owned inventory, dealers who take a step back to reassess their whole approach, from acquisition to sale, have an opportunity. Automating the various workflows within the reconditioning process until you have one seamless, cross-departmental process will empower you and your employees to resolve delay-causing issues immediately upon discovery.

Interested in revamping your reconditioning process and cutting down on all the wasted money? Check out our eBook to learn more about the value of automating workflows for cycle time savings.

About the Author

Brad Schafer, the director of ReconTRAC® at Reynolds and Reynolds, has more than 25 years of industry experience, having held leadership roles at large dealer groups. Brad is one of the founders of ReconTRAC, a reconditioning software solution. With this solution, Brad has limitless reconditioning expertise and knowledge he uses to help dealerships across the country reduce their cycle time and optimize processes.

*This article previously appeared in the Reynolds and Reynolds FUEL monthly newsletter*

By Raymond Desadier

As scholars ponder the future of the automotive industry, those within its ranks are concerned with the impact it will have on all facets of the business. One profit center the COVID-19 pandemic may not have an adverse effect on is accessory sales.

The market for accessory sales has actually improved when you consider the following variables:

0% financing – Several OEMs are offering zero percent financing for anywhere between 60 to 84 months. Why take on the cost of accessories elsewhere when you can add it to your monthly car installment and pay it out over several years for no additional cost?

Inventory Issues – As inventory shrinks due to production slowdowns, accessories are a way for customers to make sure they get all the features they want in their new vehicle.  Upgraded wheels, chrome inserts, infotainment systems, and hitches are common trim upgrades that can now be accessory opportunities for you.

Trucks Are Still Big – Pickup sales have held strong amongst the pandemic, dropping only 18.7% compared to SUVs falling 36.6%. Trucks are by far the biggest accessory opportunity with so many modifications and add-ons available. Make sure you have a full catalog of accessories to offer your truck customers.

Increased Accessory Budget – Many consumers in the market for a car are likely to be in a stronger financial position now than pre-pandemic. Between stimulus checks, lower expenses, and no opportunities to spend money on entertainment, many have disposable income that wasn’t there previously. In fact, we are at the highest personal savings rates since the 1980s. Now is the time to present accessory options to every customer.

Increased Value of “One-Stop Shopping” – Convenience has become more important than ever as consumers have become accustomed to home deliveries or easy street-side pick-up. The demand for safety and convenience carries over to other purchases as well. Your customers will stick with you if they can get all their vehicle needs from one visit.

Increased Value of Accessories – Some accessories are now even more valuable. Keeping your vehicle clean is top of mind for consumers; all-weather mats are easily hosed down and seat covers can be washed regularly. Storage compartments are perfect for containing extra masks or sanitation supplies. But also, accessories that inspire fun – like spoilers, suspension, and roof racks, have also increased in value. Now that people have to make their own fun, they may turn to their personal vehicle.

There is no better time to rethink your accessory strategy and adapt to the current environment. Make sure you’re ready to take advantage of this lucrative market with a vetted digital solution.

About the Author

Raymond began his career in the automotive industry in 2001. He joined the Reynolds Consulting Services team 15 years later as an accessories business consultant. He has established accessory departments in many dealerships and has helped them thrive with training and recommendations.

*This article previously appeared in the Reynolds and Reynolds FUEL monthly newsletter*

By Robert "Skip" Scott

Working with dealerships across the U.S., one thing is abundantly clear: every dealership wants to make more money, no matter what the economy is like. Unfortunately, most dealerships don’t have a plan in place; or worse, they have one but it’s not obtainable. “If we increase sales by 20%, PVR by 15%, and repair orders by…” – you get the picture. Quite often, they are far off their goals and forecasts by the end of the first quarter. Then, they give up trying to reach them.

It’s time to think differently. Consider all the individual transactions that make up your month – every retail car deal, accessory, and aftermarket product. Think about every bank contract, parts ticket, service repair order, wholesale car deal, and dealer trade. Even the smallest volume dealerships have thousands, if not tens of thousands, of unique transactions by the end of the month.

Improved profitability is more easily obtained by increasing tracking and accountability among team members. By using technology available to dealers today, you can identify and correct inhibitors to profitability. Below are six areas that can lead to increased profitability without directly selling or servicing any additional vehicles.

1. Benchmark your current performance.

Know your strengths and weaknesses. Identify how you’re doing versus other dealers like you. Identify and quantify what areas in your store can realistically be improved, and what you will gain. For example: “My store’s service absorption rate is at 65%. The dealers of my brand that are performing the best are at 85%. By obtaining 85%, I’d have another $57,000 in gross profit.” 

Pick any two or three items you can easily fix and fix them (or have your management team justify why they can’t be fixed). Then move on to other areas of opportunity. Do this two or three times a year, with two or three key areas each time.

2. Track expenses relentlessly.

So many dealerships literally spend themselves out of business. Have a system in place that allows you to quickly see your expenses each month as they are being posted. Make sure you can see what the month over month trends are and investigate immediately when expenses seem to be getting out of control. Department managers need to pay attention to important expenses that affect vehicle, parts, and sales profitability. If tracking expenses isn’t easy, find a solution that will handle it for you.

3. Accountability and communication are key.

Who is in charge of your dealership’s collection department? Unfunded contracts, unpaid warranty claims, unpaid incentives, slow paying wholesale deals, and trade title issues can all put a grind on your finances and profitability. Who keeps your money flowing? Is it easy for you to track their performance? Get a system that allows you to create a dealership-wide “bulletin board” of who is keeping money owed to the dealership, including what is known about an issue and what is being done to correct it. This can increase profitability by cutting down the time it takes to get paid.

4. Know your wholesale business.

Most dealers simply look at one number – wholesale profit or wholesale loss – for the month. We need to look deeper at the “why” behind the number. Do you have a manager(s) or salesperson(s) that needs help with the appraisal process because it’s their cars you constantly lose money on? Do you have wholesale outlets that perform better than others, and therefore should get a shot at more vehicles? Are there particular brands/types of cars you are consistently having to wholesale and take a loss? Having a tool to track your wholesale performance on a monthly, quarterly, and annual basis can be an easy way to improve overall profitability.

5. Track your salesperson goals every day.

Every dealer claims to do this. The reality is, tracking it and doing something about it don’t always happen together. There are far too many five and ten year veteran salespeople selling the same amount of vehicles as the person hired three months ago. Your managers need to see salesperson performance month over month, year over year. They need to set, communicate, and track goals (and even automatically email performance to staff on a daily basis). Managers need to identify salespeople who haven’t closed a deal in the last couple of days, so they can train them to get back on track. Having a single system that does this for you can hold sales staff accountable and can ensure you don’t miss obtaining realistic goals.

6. Track your service advisor goals every day.

Similar to the sales department, you need to track your service department more closely. Can service managers easily identify coaching opportunities? Do you know op code utilization per advisor? Do you know the most profitable op codes being utilized? Do you track each advisor’s repair orders monthly to track gross profit percentage per RO?

We all track work in progress, but do you know which advisors are responsible for having the greatest percentage of aged open ROs? Do you know on a daily basis the status of these ROs and what’s being done to get them closed? Having a tool that tracks key performance areas of the service department can improve profitability without servicing any additional vehicles.

Conclusion

Keeping track of your dealership’s performance and managing your business has immense payoff. If you’re in need of a solution that can help, contact your Reynolds and Reynolds account manager.

If you need custom consulting to help fix issues or walk you through key tactics, contact Reynolds Consulting Services at 888.204.6092 or email consulting@reyrey.com.

About the Author

Skip has been a part of the Reynolds Consulting Services team since 2013. He consults on CRM for sales and service, used vehicle profitability, and ReverseRisk®, a comprehensive dealership reporting tool. With over 35 years of industry experience working as a general manager, sales manager, finance manager, and sales and leasing consultant, Skip is well equipped to help dealerships manage their stores.

*This article previously appeared in the Reynolds and Reynolds FUEL monthly newsletter*

By Jessica Quattro

Most people have a love-hate relationship with their CRM tool. In fact, Accent says only 13% of sales teams are satisfied with theirs. That’s because the traditional CRM tool creates bad ripple effects for dealerships.

Between the stress of giving customers a great experience, finishing daily tasks, and meeting goals, your dealership’s CRM tool can greatly impact the way your team operates every day. How and if your team utilizes the CRM tool can be the difference between success and failure.

Let’s dive into some of the bad ripple effects your CRM creates that affect your team’s daily processes.

1. The Never Ending Cycle of Tracking Down Information

Your sales team uses their personal phones to communicate with prospects… sending texts, pictures, and videos. The prospect information is saved in their personal phone and nothing is added into the CRM except the actual appointment (maybe).

When the customer arrives, the salesperson jots down the vehicle the customer wants on a piece of paper. He runs to track down the vehicle and scan the customer’s driver’s license – leaving the customer waiting alone.

On the test drive, the customer determines the route and barely scratches the surface of the features available that would ‘wow’ them.

The salesperson grabs you (his manager) to help save the deal, but nothing was entered into the CRM. You know nothing about the customer, his dealership history, or what he’s looking for.

Before you can help, the customer has already walked out the door and you lost the sale.

2. The Unorganized Follow-Up Process

A prospect came to the dealership to test drive a vehicle. After the test drive, he wanted to discuss the purchase with his wife.

Your salesperson made a note of that in the CRM and scheduled a follow-up call for the next day. Reviewing his daily work plan the next morning, his follow-up call to that customer was near the bottom of his list behind two birthday messages, an anniversary message, and a three month check-in email.

Once he finally gets to the most important call of his day, the customer says he needs more time. Your salesperson makes that note and schedules another follow-up for next week.

Before you know it, he isn’t answering the calls and your salesperson lost the sale.

3. The Chaotic Demand to Close Deals

You’re pulled in seven directions at any one time. You don’t know how salespeople are prioritizing prospects. You don’t know whose turn it is to take an up. You don’t know who’s on a test drive or whose customer is ready to walk.

You only know your assistance is needed when a salesperson seeks you out, which is often too late, with the customer walking out the door before you even get a chance to help.

At the end of each day, you review goals and reports and wonder how your team is going to sell more cars and hit more OEM incentives.

The Cost of Bad Ripple Effects

Your store is losing sales and profit opportunities because:

Your CRM tool is underused and leads to poor results.

Processes and data entry aren’t automated costing you productivity.

Information isn’t readily available when you need it leading to wasted time and money.

Your CRM tool functionality doesn’t meet your team’s needs so daily tasks aren’t completed and sales are lost in the chaos.

These problems cause ripple effects in how your team works, how your customers make decisions, and how your dealership meets goals and makes a profit.

The only way to overcome these issues is by starting at the root of the problem: your CRM tool.

Redefine for Good Ripple Effects

You need to redefine what your traditional CRM tool is and what it enables your team to accomplish.

Stop forcing salespeople to use a CRM that slows them down with tedious post-action, manual data entry. Give them a solution that makes their job easier with automation and full access to information the moment they need it.

Keep your sales team from repeatedly prioritizing their tasks and follow-up based on what’s chronologically first on the list. They need to prioritize prospects based on buying likelihood and be able to automatically schedule tasks based on real results.

Quit managing only when your help is requested or even after the fact. You need to know who’s doing what, the status of deals at various stages of the sales process, who’s on track to meet goals and who isn’t (and why), all in real time.

Only by redefining your CRM, will you achieve these good ripple effects, putting your team in a position to be more efficient, productive, and ultimately win more deals.

About the Author

Jessica is product planning manager at Reynolds and Reynolds for sales based applications.

*This article previously appeared in the Reynolds and Reynolds FUEL monthly newsletter*

By Adam Kirdzik

Alexander Graham Bell first patented the phone in 1876. Since then, the phone has gained a clearer signal, lost its wires, and turned into a handheld device most people won’t leave a room without. If anyone wants to reach out to a friend, a relative, or a customer, they first reach for their phones.

However, in a service drive, getting to the phone takes time. Advisors already have a lot on their plate from getting recommendations from the techs, looking up labor times, balancing the customers already in the lobby, greeting customers coming in, and then they have to find time to sit down and get on the phone amidst this everyday chaos.

Meanwhile, your drop-off customer is out shopping, seeing a movie, or hanging out with their friends until their ride is ready. If they see a call from a number they don’t recognize, they will let it go to voicemail. In fact, according to a recent study, only 52% of calls are answered while the rest go to voicemail. Unanswered calls are only projected to increase with the number of robocalls rising (robocalls rose 46% from 2017 to 2018).

After the first voicemail from your advisors, the game of phone tag begins. At roughly 30 seconds to two minutes per phone call, depending on the length of voicemail, time spent on the phone can add up quickly. Multiply that by two calls per repair order, then by your number of drop offs, and the numbers don’t lie. Advisors are wasting time and money trying to call your customers.

What’s the easiest way to communicate with customers and keep advisors from playing phone tag? Texting.

According to a study by DealerRater, both mass-market and luxury brand customers preferred a text to let them know their vehicle was ready far more than a phone call, a conversation, or any other form of communication. Yet, only three percent of dealerships are using text messaging in service.

Texting is an easy way to get ahead of this industry curve. One enhancement could make you part of a small percentage of dealership service drives that are beating the competition at bringing customers back. According to the 2017 JD Power Study, 67% of customers who are contacted by text message say they will definitely return to the dealership for service work.

Even recently we can see from the 2019 JD Power CSI Study satisfaction is 75 points higher for all-digital dealerships, with customers preferring to communicate with the dealer through text messages.

When looking for a texting service, dealers should be cautious of the legalities involved. Make sure the provider offers an opt-out option on every text and the text messages are stored securely. It’s also good to have text messages stored within the DMS for a few months at a time in case a legal matter arises. Previous texts should also be easily accessible if there is a discrepancy during the appointment.

With text messaging at their fingertips, why are your advisors still calling customers? Get ahead of the competition and exceed customer expectations with text messaging.

About the Author

Adam Kirdzik is a Product Planning manager for Parts and Service applications at Reynolds and Reynolds.

*This article previously appeared in the Reynolds and Reynolds FUEL monthly newsletter*

By Joe Witt

SEMA recently published its latest market report with a lot of new findings. The most exciting finding is that the accessory industry garnered an extraordinary $42.92 billion in retail sales. They also added a new section with do-it-yourself estimates on installations and information on where accessories were purchased and received – an important stat to pay attention to when conducting accessory customer discoveries. But one thing that didn’t change in this new report is that accessory buyers are a diverse group.

The accessorizers are broken into two categories: enthusiasts and non-enthusiasts. SEMA compares types of vehicles they drive, population distribution, age, and more. But SEMA’s reports don’t cover how you sell differently to each group.

To better understand the roles both these groups play in the accessory market, let’s take a closer look. The enthusiasts are broken into three groups:

The Builder buys parts because they enjoy working on their vehicle. They’ll probably buy parts from you if they’re at a discount, but they’ll be doing the installs themselves. That is, unless the install is less fun and more tedious. Try selling them hitches, exterior body accessories, and driver assist systems.

The Driver buys parts to maximize the fun of driving. They’re an easy accessory sell – most likely associated with the off-road segment.

The In-Crowd buys parts to make their vehicle stand out. They’re looking for the craziest accent lights and the shiniest spinners.

The enthusiasts can be an easy sell if you know how to identify them and what accessories to sell. Try to keep them engaged and make the learning process easy. Don’t shove another sales pitch in their face. Instead, let them take the reins on a shopping experience and make it simple for them to buy.

Enthusiasts are only 44% of the market. So what about the other 56% of the market that are the non-enthusiasts? They’re also broken up into three groups:

The Handyman buys parts to upgrade when performing repairs or maintenance. They’re looking to extend the life of their vehicles and maximize efficiency of operation. They’ll be looking for the safety and reliability products.

The Commuter buys parts to maximize driver comfort and for mild personalization. They’re looking for functional accessories more than anything else.

The DIFM, or “do-it-for-me”, buyers listen to their mechanic’s recommendations for everything the vehicle needs. This segment is proof that an accessory department needs to involve all departments. Imagine getting this entire customer base just because your mechanic says they should!

The non-enthusiasts are actually going to be fairly easy to sell to as well. They are aware of accessories, want accessories, and go to the shop down the road to purchase accessories. As with selling to enthusiasts, you’ll want to make it simple for them to buy. Allow them to browse your selection, and don’t shy away from selling aftermarket products.

What’s holding you back from selling accessories? According to SEMA’s report, it may be your customer’s wallet. They found the number one reason preventing people from purchasing more accessories is the cost. Think of the cost of paint protection for example. Most people don’t have $800+ sitting in their bank account for free spending. But they do have a few extra dollars a month. If you build the cost of that sunroof into their new-car deal, you’ve made that purchase a lot more realistic.

There are a lot of different types of accessories out there – performance, functional, entertainment, safety, etc. It’s hard to break all these down in a way where you’re not losing the customer to boredom. A catalog is too big (it will take forever to get through that dusty book), and a showroom is too small (all they see are some floormats, step bars, and sample fabrics).

That’s why the best way to introduce accessories to any customer type is through an interactive digital platform that seamlessly animates the accessory onto their vehicle. An engaging platform keeps the customer excited and involved in the process so they’re not just staring at the back of a computer or flipping through pamphlets. By being able to see all the accessory products in one place, you can identify accessory enthusiasts or non-enthusiasts a lot easier based on what they’re interested in purchasing, and tailor your presentation accordingly. That could go a long way in follow-up efforts!

About the Author

Joe Witt is the Vendor Relations Business Manager for AddOnAuto at Reynolds and Reynolds. He started working in dealership sales in 2005. He became an accessory specialist, and then moved into various management roles. Joe started as an implementation consultant with the AddOnAuto team in 2011. He spends much of his time building relationships with suppliers, restylers, and manufacturers to better the processes and products offered to dealerships with AddOnAuto.

*This article previously appeared in the Reynolds and Reynolds FUEL monthly newsletter*

By Hayley Holmes

What is predictive analytics? Simply put, it’s the use of data to identify the likelihood of future outcomes based on historical data.

I like to think of it as being proactive rather than reactive – being able to plan for something before it actually happens.

Predictive analytics leverages a customer’s profile, considering their transactional, behavioral, and demographic characteristics, to predict the likelihood of various scenarios. It analyzes age, gender, marital status, income, housing type, occupation, and so much more to qualify an ideal prospect and their likelihood of buying.

Why should you care? If you want to be one step ahead, predictive analytics is your number one ally when selling more vehicles. Predictive analytics allows you to identify a customer’s needs before the customer even recognizes that need.

Automotive retailing isn’t the only industry taking note of predictive analytics. Big-name companies across the board are using it to their benefit every day:

Target

Target assigns each customer a guest ID number so they can track information such as name, used credit cards, email address, purchase history, email advertisement activity, and online shopping habits. Based on buying patterns, Target can determine what is most relevant for a specific customer.

Case Example: Target analyzes buying patterns associated with baby registries. They are able to identify 25 products to help predict the likelihood of pregnancy and an associated due date. For example, vitamins such as calcium, magnesium, or zinc are associated with the first trimester and unscented lotion is associated with the second trimester. When cocoa butter lotion and a blue rug are purchased, she is likely having a boy.[1]

With this predictive data, Target sends coupons to mothers-to-be for products before she even knows she needs them, allowing Target to capture more value from customers by creating brand loyalty.

Spotify

Spotify, the largest on-demand music service in the world with more than 100 million users, is a data-driven company. As they continue to grow, Spotify acquires data points that help train their algorithms and machines to listen to music and conclude on insights that impact its business and listeners’ experiences.

Case Example: In its first year, the Discover Weekly playlist feature reached 40 million people. But it’s not your average playlist. Each user gets a personalized playlist every week from Spotify of music they have not heard before on the service, but is considered something the listener will enjoy. Spotify analyzes listening history and combines it with what’s hot and new to deliver a modern-day version of a personalized mix tape.[2]

It doesn’t stop there. Based on listening history, favorites, and location, Spotify sends concert ticket information to users’ email addresses. If it’s a beloved artist and in close proximity, this hand-delivered ticket information is tempting for users. And for Spotify… their brand loyalty just keeps growing.

Amazon

Amazon is a leader in data collection, storing, processing, and analyzing. With predictive analytics, they can determine how customers are spending their money to help increase customer satisfaction and loyalty.

Case Example: Amazon analyzes items you’ve purchased recently, items in your online shopping cart or wish list, items you’ve reviewed or rated, and items you search for the most. Based on this information, Amazon can recommend additional or similar products that other customers purchased when buying those same products.

For example, if you add a DVD to your online shopping cart, similar movies purchased by other customers are recommended to you. Amazon encourages you to buy on impulse to help further satisfy your shopping experience and spend more money. This method alone generates 35% of the company’s sales annually. [3]

Kroger

For a long time, Kroger, a large supermarket chain, lagged behind other retailers in the digital space. In recent years, they’ve made rapid strides. Using predictive analytics, Kroger segments shoppers and creates individualized experiences – including personalized promotions and tailored pricing – for its Plus Card members.

Case Example: The mobile application is where Kroger truly excels in data. This is where they personalize promotions and deliver value and relevancy to shoppers on an individual basis. In the first quarter of 2018, they delivered more than 6 million unique offers![4]

They track buying history, pattern, and frequency to serve up the best promotions and products most relevant to each customer. Coupled with Best Customer Bonuses, these personalized promotions resonate with shoppers, helping Kroger not only retain its best shoppers, but keep them loyal and spending more in its stores.

Your Dealership

How can your dealership be proactive with customers and increase vehicle sales, customer retention, and brand loyalty? The answer lies in leveraging predictive analytics. These big name companies are proof it works.

[1] Digital Initiative

[2] Tech Crunch

[3] Investopedia

[4] Grocery Dive

About the Author

Hayley Holmes is the product planning manager at Reynolds and Reynolds for XtreamService. She formerly served as a marketing specialist and team lead, providing XtreamService to dealerships, and assisting to build and develop the marketing services team.