Hint: It involves implementing a digital retailing strategy with messaging woven into it. And we’ve got a guide to help you make it work. SEE HOW
One of the fastest growing practices that dealerships are utilizing to increase sales is prescreening a Service Customer that has either made an appointment to have work done on a vehicle or just shows up. In addition, there are numerous companies that offer equity calculations not only on vehicles that bought from the dealership but even those that did not. The “Auto Enhanced” soft credit pull “pre screen” has enough loan information to perform equity calculations on customers that did not buy the vehicle at that dealership.
This type of credit pull has been used for quite some time by many companies. It does not require the consent of the consumer and only a minimal amount of information is needed. You know those pre-approved credit card solicitations that you receive in the mail? Those offers were probably generated by a credit card vendor conducting a soft pull on a database which identifies consumers that meet their requirements for a credit line. Soft pulls don’t affect a consumer’s credit and do not appear on credit reports as inquiries. They do not provide complete credit information, just a general idea of the consumer’s credit health (or lack thereof), which can be used to make a more informed offer.
I think part of the reason soft pulls are not more widely used is a misconception that it is unethical or wrong to utilize soft pulls when working deals with consumers. However, I can assure you 100% that they are perfectly legal. In fact, they are widely used in many other industries including mortgages, business loans, student loans and credit cards.
It is also important to know that there are two different types of soft pulls, batch and real time. A batch pulled score can be up to 30-days old. It basically just gives an idea of the credit status. In fact, it is not uncommon for a customer to walk in with their “Fico score,” or something similar which they pulled, and for it to be totally off from the hard pull. Whereas, a real time score means that if a hard pull were done the same day as the soft pull, the credit score would match exactly. Credit scores can change quite a bit over a 30-day period. So, while a bit more expensive, real time is the way to go.
Because of the soft pull information provided, the dealership personnel looking to interact and discuss moving the customer off their current vehicle into a newer one can be more selective in who they approach. They can also leave alone the good service customer that may have a decent equity position but poor credit to continue watching the Today Show in the waiting room.
When customers are approached in the waiting room using this technology they are called up just as if someone wants to speak with them about their car being serviced. They are then told that they have been prescreened and qualify for a newer vehicle for the same as or less than they are paying monthly now. Of course the dealership sales personnel approaching these individuals must be well versed in explaining how a soft credit pull works and that it does not impact the customer’s credit. The customer also has the option of opting out of receiving soft credit pull offers in the future but that means it turns off for all sources including credit card, insurance, and mortgage companies. Less than 1% of the population has opted out of soft credit pulls.
Dealerships using this process have, in many cases, seen a dramatic increase in sales. So I would encourage looking into this if you are not already participating.