Consumers are drowning with information online in their car buying journey. Learn what’s distracting your visitors, how to engage them and proven tactics to keep their attention. Download Storyboard
The Holy Grail in velocity management is inventory turn. As a used vehicle retailer you are of course in the game to make profit and invariably this is the major focus for everyone. Owners, shareholders, managers and individual sales people have their eyes on the revenue or commission that they can generate. Traditionally, measuring performance across the board looks at the retained gross in a vehicle and of course the average profit per unit achieved over a given reporting period. Inevitably, this focus will lead to some decisions on specific inventory units which will severely impact the overall performance.
Here's the scenario. You have a good condition vehicle that has not sold even though it is a well prepared and well displayed. Because of this you are led to think " There is a buyer out there somewhere for it. Just hold on and it will sell". You don't want to ruin your averages by changing prices. However, time passes quickly in the used auto business and before you know it the unit is well over age. Still though, you are convinced that you can make good money because it is a nice car, you just need the right person for it.
Once you begin to lose faith and are fed up of looking at it, you decide to spiff the car, reduce the price a little to see if that helps. No luck there so eventually you wholesale out of it with a bunch of other vehicles and you hide the loss amongst the wholesale profits on the others in the batch.
Takeaway from this: You took up funds and space which could have generated profits with a rapid turnover and lost not only potential revenue but also took a dive on your original investment on that unit.
2. Taking shortcuts with online advertising
Everyone in the retail business is busy! There is always something happening. Ever heard the old saying that work expands to fill the time available? Never is it more true than in used car retailing. Here's what the average dealer used to do - work away trying to sell all week and then suddenly the deadline for the newspaper ad was on them and they hurriedly slapped together something to put in the paper for the weekend. There another job completed and out of the way. NOT SO! The same applies to today's advertising which is, of course, dominated by online display material. Remember, if you do not pay the right attention to what you put in your store window display, don't expect anyone walking by to stop and come through the door.
What you display on the internet IS your store. Every picture, every word determines your destiny. Prioritise properly and make sure that you devote full attention and great detail to what and how you display your inventory online in the same way that you should with the cars on the lot.
3. Ignoring statistic reports
Many sales people are by their nature A-type personalities, pushing to get the job done and moving quickly on to the next task. Often they are not big on analysing the detail. The power of the internet on the used car buyer has totalling influenced their behaviour and used car retailers need to adjust theirs to suit. Where previously we could focus purely on how many walk-ins we had on the lot or how many phone calls from the weekend's advert, now we need to analyse what our customers are doing online. How often are they looking at our cars and are they prompted to act by what they see? If you find the detail of such analysis too much like hard work and prefer to deal with the physical goings on in the showroom, you will make hard work of succeeding in used car retailing. Ignore at your peril.
The technology is there to tell you what is happening and what you need to do about it. Learn to use it well and religiously.
4. Failing to act
This is the cardinal sin! With all the available methods we have to tell us what is going on we have no excuses. The information is there to give highly specific read-outs of what our business environment is like. Using it correctly, we can see precisely what is going on. Act on it without delay. Think of a thermostat in an HVAC system. It controls the environment by making changes whenever there is a temperature variation, be it up or down. It operates automatically and saves one having to manually go and turn controls on or off. Being successful in today retail environment means that you have to do the same.
Monitor closely and ACT when necessary. If you don't act you will get increasingly uncomfortable until you are in a real hothouse.
If you are doing any of the above because you are comfortable with how the operation is doing and you do not feel the pressure to change you will be left behind in today's market. A best performance result in modern used car sales departments means adding new skills on top of the traditional knowledge and ability of that used car people have. Define responsibilities, assign accountabilities and make sure you know who does what and when. Keeping ahead of the game, monitoring closely what you do, what the competition does and making timely decisions are the secret to sustained success.