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It’s hard to believe, but true:dealerships are leaving almost a million dollars per store, on average, per year in accessories sales literally on the showroom floor.At a time when dealership profits are being squeezed like never before, one of the highest margin opportunities available – vehicle accessories sales - simply isn’t being leveraged in most dealerships.
The data shows that the accessories market has grown dramatically over the past years and it appears that even with (or perhaps because of) the current economic environment consumers are more receptive than ever to enhancing their vehicle both inside and out with aftermarket accessory products.Furthermore the data shows that consumers would prefer to purchase accessories from their dealership.So why are dealerships only capturing about 10 – 17% of the market, while aftermarket chains and web sites are cleaning up?
We think it truly is a case of timing (and that little thing called process) being everything:In a recent national study of 120-plus dealerships, we found that one in two new vehicle buyers will purchase accessories if they are properly presented at the time of purchase with a rich visualization of the potential enhancements to the car they are purchasing.What did this mean in terms of revenue for these dealers? The average dealership in the study generated $400-$600 in accessory-revenue-per-vehicle-sold, up from $80-$120 per vehicle sold before the new process was implemented.
It’s right there in the numbers:With the right tools and process, dealerships can literally increase their accessories revenue per vehicle sold by 500%.
The fact is that dealerships actually have powerful, built-in advantages to ‘own’ far more of the accessories market than they do today. Psychologically, consumers are far more likely to spend on accessories at that exciting “sweet spot” moment of purchase.And with consumers being much more careful with their dollars, using a process that shows the consumer how easily the cost of the accessories can be added into their monthly payment makes for a much more consumer-friendly environment.But, with dealership resources strained and so much energy spent on the actual sale and the ongoing challenges of financing in today’s market – not to mention the literally millions of accessory variables and pricing combinations – it’s no wonder that the accessories opportunity slips through the cracks. But with online tools like our AOA product available on the market making the process easier, we believe that dealerships are well-positioned to ramp up their aftermarket profits.
In our study, dealerships used our AOA product to generate the $500-$1,000 in additional revenue, per vehicle sold.But whether or not you opt to use our tool there are some key best practices that can really help you cut a bigger slice of that pie:
Key best practices?
Take advantage of any “wait time” after the purchase has been negotiated and financing is being arranged to let the customer digitally configure their new vehicle with accessories.
Find an online tool that can literally configure the exact vehicle (including the year, make, model, interior and exterior color) with the accessories on the fly so the customer can immediately visual the enhancements.
Interior accessories (like DVD players, navigation, dash kits, etc…) are critical to your accessories profitability, so make sure the tool you choose has interior as well as exterior visualization capabilities.
Ease the financial pain by calculating the enhancements into the overall financing and monthly payment as well as providing the upfront price.
Ensure that the accessories sales, financing, and installation process is coordinated across the entire dealership, facilitating the efforts of everyone involved (customer, sales, F&I, service, parts, management).Your accessories sales efforts will crash and burn quickly if any one member of the value chain has a bad experience.