Notifications & Messages

Jared Hamilton
From: Jared Hamilton
Hey - It’s time to join the thousands of other dealer professionals on DrivingSales. Create an account so you can get full access to the articles, discussions and people that are shaping the future of the automotive industry.
×
Mike Martinez

Mike Martinez Chief Marketing Officer

Exclusive Blog Posts

Auto/Mate Names Patrick Reilly as New Head of Marketing

Auto/Mate Names Patrick Reilly as New Head of Marketing

ALBANY, NY, UNITED STATES, December 5, 2016 /EINPresswire.com/ -- Auto/Mate Dealership Systems announced today that Patrick Reilly has joined its team …

Anyone can be a Bi-Lingual Salesman now

Anyone can be a Bi-Lingual Salesman now

I came across an article today on a piece of new technology developed by Waverly Labs.  It is an earpiece that translates between languages.  My …

Tips For Your Car Dealership Website

Tips For Your Car Dealership Website

The days of only advertising in the phone book for your car dealership are over. Having an online presence is now more important than ever before. The firs…

4 Million Views In One Week - Here's How We Did It

4 Million Views In One Week - Here's How We Did It

Thanksgiving Eve.  Turkeys were being prepared to go in ovens.  Drinks were being poured.  And we were preparing to launch a video that we k…

Becoming an ACTIVE leader 101

Becoming an ACTIVE leader 101

Today’s workforce needs immediate feedback, constant counseling and suggestions to maintain motivation and focus on the current goal. The days of bei…

Acton Toyota and Falmouth Toyota: What they did to double accessory sales and put big bucks to the bottom line

 

Two Dealerships Crack the Elusive ‘Accessories Code’ To the Tune of Tens of Thousands in Sales Each Month
 
Breakthrough In-Store Sales Process - Revolving Around Accessories Visualization, Virtual Inventory and the Right Timing - Driving an Average of 200% Increases in Accessories Revenue, or an Incremental $50,000 a Month
 
Summary/The Issue:
 
Both Acton Toyota of Littleton and Falmouth Toyota of Massachusetts are very successful dealerships, always looking for smart ways to drive new revenue, and new profit centers to tackle. (Acton ranks #17 in the Ward’s e-Dealer 100 list, and is the #1 Prius and #2 Toyota Certified Used Retailer in the metro Boston area, while Falmouth is one of the premier dealerships in the Cape Cod area.) 
 
Both dealers knew that vehicle accessories sales over the last decade had exploded, and that the vast majority of their new-vehicle buyers were spending $1,000-plus, but that independent chains and mail order/websites were the ones cleaning up – not them. Both Acton and Falmouth were so determined to grab a fairer share of the market that they had been trying to sell accessories for years, but the process was not working as well as they had hoped: the inventory-carrying, set-up and display costs were too high – they weren’t engaging/converting their customers (with an inefficient process and limited product choices) – and the parts and service department fulfillment was unsatisfactory. Falmouth was only generating $9,000/month in revenue!
 
Then, in the last year, both dealerships embraced a revolutionary new accessories strategy that near-immediately had an astounding impact on their business: driving $50,000 a month in incremental, monthly revenue for Acton, and $36,000 for Falmouth, and that consistently converts 1 in 2 customers to making accessories purchases (up from just 1 in 10 before).
 
This case study will detail the core, shared components of their strategies and the shared best practices responsible for each dealer’s phenomenal, eye-opening results.
 
Accessories: A Huge Opportunity Dealers Have Been Unable to Leverage
 
First, let’s consider a few cold, hard facts about the booming accessories market, and how the opportunities – and lost dealer opportunities – are only intensifying:
 
Auto accessories are a $32 billion annual market
 
New-vehicle sales have plummeted 62.5% over the last decade, while the accessories market has seen explosive 37% growth over the same period.
 
92% of consumers are willing to buy auto accessories and over 60% would spend more than $1,000.
 
70% of new-car buyers personalize their vehicle within 30 days of purchase.
 
Accessories represent an average $1 million/year dealership opportunity not being captured.
 
Dealerships account for a paltry 10-17% of total accessory sales.
 
Acton and Falmouth Toyota’s Four-Point Solution:
 
So, how have Acton and Falmouth Toyota managed to crack the elusive ‘accessories conundrum,’ and seize (on average) an extra $600,000 a year in sales that most dealers leave languishing on the showroom floor? While individual dealership processes vary slightly, their shared successes are overwhelmingly attributable to both dealerships implementing FOUR crucial strategies/processes/tools:
 
The Right Timing…
 
Customer Visualization/Personalization Tools
 
100% Virtual Inventory System
 
Systems Integrating All Accessories Work Flow/Fulfillment – from Sales, to F&I, to Parts and Service Departments
 
I. Rich Visualization & Personalization:
 
Knowing that trying to sell a customer something they can’t actually see/imagine is a deeply un-engaging, ineffective proposition, both Acton and Falmouth Toyota adopted an online tool that allowed their customers to configure their exact vehicle with thousands of accessories – on the fly. Both dealerships report that salespeople find it very easy to offer customers an actually fun, interactive online tool that allows them to richly visualize a customized, ‘dream’ version of their car and that, subsequently, 100% of sales staff presents accessories consistently.
 
While there are a number of online accessories configurators available, both dealerships use izmocars’ Add-on-Auto (AOA) tool, and suggest adopting one that configures vehicles down to year, make, model, trim, interior and exterior color, etc. – while providing a menu-based format making it easy for customers to choose between immediate and monthly payments. And both dealerships stress that because interior accessories (like DVD players, navigation, dash kits, etc.) are huge profit-drivers, to make sure the tool features interior configuration capabilities.
 
Both dealerships report that simply adding the visualization/configuration component has had direct, dramatic impact on likelihood to buy. As Shawnee Wandless, Accessories Manager of Acton put it: “The online configurator provides a really easy, engaging way for all dealer staff to present accessories to customers. You sell products that you would think would not sell and to customers you would normally think wouldn’t end up purchasing products.”
 
II) The Right Timing:
 
In many ways “timing” is always on a dealership’s side with accessories, because psychologically, consumers are far more prone to spend at that exciting “sweet spot” moment of purchase. And independent surveys show that consumers would actually rather buy accessories in-dealership, than in the aftermarket. And as Wandless of Acton puts it: “because the financing can often be rolled into the new-vehicle financing, it makes it easier on the budget.”
 
Both dealerships report that it’s critical to adopt a process that shows the consumer how easily accessories can be added into their overall vehicle financing package, and that instantly pre-calculates that lower monthly payment for them – as well as providing the accessories’ upfront price. Acton reports that by using this menu-based financing model, “they can work $3,000 to $4,000 in accessories sales into one customer.”
 
And other aspects of accessories’ “timing” are key: both dealerships have found that the very best (and highest-converting) window to present accessories (by, ideally, letting the customer digitally configure their new vehicle), is the wait time just after the deal has been negotiated and they’re waiting for the F&I contracts.
 
III) Eliminate Physical Inventory – Go 100% Virtual:
 
Dealerships used to have two (unprofitable) choices: carry cumbersome, expensive, and, by nature, extremely limited physical inventory, or contract with 3rd-party resellers/installers. But as both Acton and Falmouth Toyota will attest, new 100%-Web-based inventory systems mean no more expensive accessories set-up costs, kiosks or showrooms – making it very easy for dealerships like Acton and Falmouth to finally succeed at accessories sales.
 
Providers like izmocars’ AOA, DealerTrack or GM’s Insignia all provide dealers with access to tens of thousands of accessories from large, updated OEM and aftermarket vendor databases. This provides unprecedented consumer choice at the dealership (that they used to be only able to get elsewhere). And because these systems instantly provide all the necessary information on accessories consumers have purchased (including SKU numbers), it’s made the parts departments very efficient in fulfilling the orders and selecting accessories.
 
And it’s only new Web-based systems (with visualization/configuration tools) that have made it possible to establish accessories in the Sales department, when it’s been confined to Fixed Ops.
 
“Accessories sales have been oddly ‘stuck’ in the Fixed Ops department,” noted Matt Murphy, General Manager of Falmouth Toyota. “Which makes little sense when you consider when they’re most likely to be bought: at the time of vehicle purchase. The AOA system has powerfully expanded the accessories opportunity throughout the store.”
 
IV) Relentlessly Integrate Workflow/All Departments:
 
Both Acton and Falmouth caution that a key reason dealerships have failed so spectacularly with accessories is they haven’t put in place cohesive, comprehensive processes and systems to ensure that the accessories sales, financing, parts ordering and installation process is seamlessly coordinated across all departments of the dealership - from front- to back-end. As Matt Murphy of Falmouth Toyota notes: “All your accessories efforts will quickly crash and burn if any player in the chain has a bad experience – whether it’s the customer, the sales department, management, parts, finance, or the service department.”
 
Putting in place such a system can ensure the accessories purchase doesn’t kink the financing (the customer only had $3,000 to spend without exceeding their credit limit, but bought $5,000) – that the parts manager can easily fulfill the order (and with online ordering there can be millions of pricing variables, so they need precise info down to SKU number) – and that the as-sold pricing of the accessory includes the proper installation hours and pricing to protect the service department. And when that customer calls about when their hood cover will be ready, any department (from sales to service) can see comments in the system and say with confidence exactly when installation will be ready. 
 
When systems are fully coordinated, getting buy-in from each department is easy, because with this new process, sales, parts and service departments are all driving incremental business. And, as Wandless of Acton notes, “the best part of the system is it doesn’t affect the price of the car or F &I sales.” Salespeople like to sell, it’s money in their pocket, and they don’t have to be hassled again. And for the first time ever, Fixed Ops benefits from front-end selling: the front-end is working on behalf of the back-end, channeling high-gross parts and installation business their way as part of the new car sale. And accessories installation directly after the vehicle purchase makes it far more likely the customer will set their first service appointment at the dealership and become a repeat service customer. A big deal, considering dealership service traffic volumes are expected to decline 20% between 2009 and 2013, resulting in a 25% decrease in dealership service dollars.
 
“This new process really spreads the wealth, so it creates storewide buy-in,” noted Matt Murphy of Falmouth Toyota. “At our dealership, we see about 40% of profits go to parts, 20% to service and 40% to sales.”
 
Fully-Tracked Dealership Results:
 
Four simple processes/tools…but consider the jaw-dropping impact on both Acton and Falmouth Toyota’s bottom line:
 
Acton Toyota:
 
Accessories Revenue Gains: From less than $50,000 to over $100,000 monthly – a gain of 100%
 
Average accessories revenue-per-vehicle: $445
 
1 in 2 new-vehicle buyers now purchasing accessories
 
Falmouth Toyota:
 
Accessories Revenue Gains: From $9,000 to $45,000 in incremental business monthly – a gain of 400% 
 
Average accessories revenue-per-vehicle: $395
 
1 in 2 new-vehicle buyers now purchasing accessories
 
Summary:
 
Dealers have been so discouraged by the obstacles accessories sales have presented in the past, that even though they are an absurdly logical fulfiller/provider for car buyers and owners, it’s as if this $32 billion opportunity can’t be properly visualized or digested. But the results dealers like Acton Toyota of Littleton and Falmouth are clocking - empowered by new, online tools and consistent, logical processes - reveal this could be a very profitable new Accessories Era for Dealerships…and getting into the game is simpler than ever.
 
Matt Murphy of Falmouth summed it up: “This new process has been an absolute breakthrough for us and has quickly made accessories one of our highest-margin profit center(s).”
Jon Stewart
"Providers like izmocars’ AOA, DealerTrack or GM’s Insignia all provide dealers with access to tens of thousands of accessories from large, updated OEM and aftermarket vendor databases." Above is an inaccurate statement in your article. GM's preferred solution is not Insignia, but is DealerTrack-Chrome Accessories.
chei scheifer
thanks for the tips i'll do this on my business. but since toyota do this i think many of the consumers bought accessories for their toyota like me ive been looking for Toyota Cargo Bars & Dividers.

 Unlock all of the community & features  Join Now