The independent dealers I’ve talked to are killing it right now. They snapped up inventory before the chip crisis that continues to make finding quality used vehicles like finding a needle in a haystack. Consumer demand led to a record 10 percent increase in used vehicle prices in April – the sharpest monthly increase in more than a decade.

But how long will it last? Factories will return to normal production, and when they do, supply and demand of used vehicles will return to a more equitable state. Now’s the time to think about what your dealership can do to engage customers and keep profits high when demand drops back down to normal.

Technology that enables easier vehicle shopping, a faster purchase process, and efficient lead follow-up, is one of the best investments you can make. Here are the top three digital enhancements independent dealers need to connect great vehicles with the local customers who need them.

1. Digital retailing tools. Give customers multiple paths to purchase. Not all customers will complete every step of the buying process online, but the vast majority want to start there. Along with making shopping easier, digital retailing tools on your website heighten your professionalism and brand image. In 2021, you don’t want what looks like a home-grown website that’s hard to navigate and offers minimal vehicle information. The best independent sites I’ve seen are contemporary and modern with an easy-to-follow process that leads the customer through interactive inventory photos, financing application, monthly payment calculators, and trade-in valuation. The most impressive I’ve seen, and something most franchised dealers aren’t doing, offers the ability to input a monthly budget and see every vehicle on the lot within that budget. It’s interactive, super helpful, and makes me want to shop at that store. As a quick aside, let’s finally kill that old argument that digital retailing and transparent pricing erode gross. It’s simply not true. In fact, when you give customers what they want on their terms you can maintain gross because the customer comes into your store ready to buy. They’ve done the work online so there’s minimal, if any, back and forth. 
2. Financing and e-contracting tools. Allow customers to get further along in the deal. Financing options and pre-approvals are a great online selling tool. Customers with pre-approval can select a vehicle and go to your store with confidence. There’s no embarrassment when a desired vehicle proves to be out of reach price-wise. E-contracting is also a big selling point and a lot of independents are already doing it. Unlike with franchised dealers where incentives and special programs can make the paperwork messy, a used sale is straightforward and easier to complete with digital signatures. It’s true that some banks are tightening up lending, but there are really good options out there like Ally Bank and Credit One that can be great partners.  
3. CRM with workflow capabilities. Win more opportunities with better lead follow-up. The average independent dealer receives twice the leads of a franchised store, but most are honest that they do a bad job of following-up. A CRM with workflow capabilities, follow-up alerts, auto-responders, and the ability to send email blasts will help you engage and nurture those leads for more sales. Most CRMs can also tie-into apps that take customer communications to the next level. For example, the QuickpageÔ Video Sales App allows your sales team to create and text videos – like vehicle walk-arounds – to customers, and store that communication history in your CRM. Videos are personal and nearly impossible to ignore. Who can resist clicking a video link from a trusted source? And when all communications append to a customer within the CRM, you can see the entire relationship at a glance to better target your next communication.

Independent dealers are riding unprecedented demand for used vehicles all the way to the bank. But this market won’t last forever. Invest in these top three digital enhancements to connect local customers with the vehicles they need, and you’ll keep engagement and profits high even as the market stabilizes.  

It’s popular to talk about the chip shortage – and for good reason. The blows just keep coming. First, the slash in vehicle production. Dealers who typically inventoried 600 to 700 new cars now have fewer than 50. I spoke with a dealer in California last week who literally had two new vehicles on his lot. Two!

Then, the subsequent soaring cost of used vehicles. According to Manheim, index prices are 52 percent higher than a year ago and are predicted to stay that way through June.

Now, rental car companies are scooping up used cars leaving franchised dealers even more high and dry. Where does all this chip crisis go? I don’t have a crystal ball, but like everything else in life, this too shall pass. So, how do franchised and independents weather this temporary crisis?

Harness equity mining technology

It’s really important for franchised dealers to harness all technology to find equity in service customers and buy cars from customers already in their databases. A CRM equipped with an equity mining tool can help you identify owners in an equity position and provide incentives for them to simply trade-in, or trade-up.

It’s key to know your demographic and the vehicles that move quickly for higher profit. Even in this market, you don’t want to buy a vehicle you typically only sell once every couple of months. And please don’t call a customer who bought within the last 12 months. That’s sloppy strategy and more likely to turn-off a customer then net you any business.

I’ve also seen dealers succeeding with community outreach events like car shows and customer appreciation nights that motivate customers to visit the dealership – whether they are in the market or not. When you can spark a conversation with a customer in front of you about getting them into a different vehicle with a lower payment, you’re that much closer to a sale. 

Prioritize service staffing and training

Around the country, service departments are doing record business right now. So much so that customers are seeing record wait times. A friend recently told me his local dealership has a six week wait time just for an oil change.

Dealerships all over the country are flooded with repair work. That’s a problem if you need additional service techs. Techs are increasingly hard to come by, and hard to keep due to intense competition.

In a previous blog, I wrote about the need for dealerships to build their own technicians. By this I mean, recruit early in your local community. Volunteer to speak at a local high school or hold an informational event (food, and free items like movie tickets, always help with attendance!) where you speak to the benefits of the job. The promise of comprehensive training and competitive pay can get recruits through your doors who from the ground-up are trained to follow your processes and live your core values.

Reassign or furlough staff as needed

A dealership with few cars to sell does not need a fleet of salespeople. It’s inevitable that you may have to re-assign or furlough sales staff to weather this temporary crisis. Consider re-assigning some staff to your service department.

Walk your bays and see what’s really going on. Are ringing phones going unanswered? Are customers waiting too long for a MPI? Are techs leaving bays for non-technical tasks like delivering paperwork, requesting parts, and/or sending updates to customers?

There are some tasks that don’t take a lot of training, but when delegated to another employee, translate to efficiencies that allow you to service more cars in less time.

Stay true to your values

I haven’t heard of any independent dealers struggling. They’re killing it because they bought up a ton of inventory before this crisis hit. The temptation any time demand heavily outstrips supply is to charge customers a premium. Be cautious. This situation is temporary. Take advantage of a customer’s need today and they will remember and likely avoid your dealership the next time they are in the market.

For franchised and independent dealers alike, stay true to your values. If you promote fair pricing and then start talking about additional fees, that is not authentic. Customers are like elephants, they have long memories. If the price of a few more bucks is to alienate a customer forever, it’s not worth the extra cash.

There’s no crystal ball to see where this chip crisis will go. But history tells us that nothing stays the same forever. Be the nimble dealership that can quickly adapt and re-align, and you’ll come out of this latest crisis just fine.

Norm walks into Cheers and what do we hear? A resounding “NORM!” I think it’s true that “sometimes you want to go where everybody knows your name.”

I bet your customers want the same recognition. After all, we’re in the people business. And what do most people want? Recognition. The feeling that someone knows them, cares about their wants and needs, and works to fulfill those needs.

In today’s fast-paced world where we’re bombarded with information 24/7, the best way to remember your customers and give them a Cheers-like, personal experience is by using a CRM.

A CRM allows you to keep all customer information in one central spot. It’s one login to access a customer’s past purchases and service history, and also a place to take detailed notes. Say a customer loves boating and you talked about it last time they were in. The next time they call, or you see them around town, you can ask if they’ve been out boating recently.

It’s the little things that build rapport, and add up to trust. And people buy things from people they trust. The CRM enables you to remember all the little details that over time make you a customer’s trusted advisor and “go-to” car person.

A CRM isn’t just for franchised dealers. It’s just as important if you’re out on your own. I have a lot of friends who’ve gone from selling cars to opening lots and the start-up costs are significant. You have to buy vehicles, rent space, pay taxes, and more. It’s no wonder most people start out really lean when it comes to technology.

But to get repeat business you have to stay in front of people. You need a way to communicate about new inventory or financing specials. A CRM is the best way to do that.

Sticky notes, multiple software platforms, or digging through files, is not the way to go. All these manual processes take a lot of time and are prone to errors or losing information. With a robust CRM, you can streamline communications, set-up tasks, and keep detailed customer notes. Many CRM platforms also allow basic email so you can work within one platform and have a complete record of customer interactions.

Of course, simply having a CRM won’t get you detailed customer records. Your employees have to use it. That’s why we say a CRM is only as good as the processes behind it. The struggle to get employees on-board is real. But it’s not insurmountable. 

A mobile-friendly CRM is one of the best ways to encourage use. Everyone is on their mobile phones all the time already. Allow them to access the CRM and enter details right from their phone and you’ll get more detailed records. Driver’s license scanners are also a great tool to save time – and employees like them because they don’t have to physically enter details.

A mandatory daily check-in is a good strategy to hold your Sales team accountable. During the meeting, review opportunities from the previous day and spot check your staff against task lists. If tasks routinely go undone, create a plan of action that includes daily one-on-ones, mentoring, and coaching.

CRM reports can show you where your team is succeeding and where it’s falling behind. The user activity completion report is especially valuable to track who is ticking items off the to-do list, and who needs help to stay on track. The activity performance report breaks out showroom, internet, and phone ups by salesperson, for at-a-glance insight into what activities are resulting in appointments and sales.

Be careful rewarding CRM use with bonuses. A bonus for completing all tasks (whether awarded weekly or monthly) may sound tempting, but shouldn’t proper CRM use be a requirement of the job? Instead, mandate its use and deal with outliers through mentoring and coaching. If it’s a required part of the job, your team will adopt the practice. And it will pay off. Proper use of the CRM is like the sales process. If you follow the process, you’ll make money. If you skip steps, you’ll lose gross.

CRM technology allows independent and franchised dealers alike to deliver a Cheers-like customer experience that builds rapport and trust – if employees use it. Mandate proper processes and lean on CRM reports to hold employees accountable, and you’ll give your team a leg-up on cultivating personal relationships that pay-off year after year.