If you have gotten used to sparse new inventory, immediate turns on vehicles, and almost non–existent floor-plans, you may want to sit down.
Current data indicates that we are quickly moving away from the new car inventory shortage of the past few years. Day supply has increased from 20 last year to an average of 50 days+, depending on the manufacturer. Higher interest rates and little to no new car incentives keep shoppers at home and new vehicles on-lot just a little longer than dealerships have been used to in the past few years.
According to Cox Automotive data, inventory is up two-thirds from where it was just a year ago. While this doesn't mean that there aren't still some struggles ahead as automakers work through their production backlogs and customer demand is inconsistent, it does suggest that we are now well on our way toward returning to higher levels of product availability and potential sales activity. With this influx of new vehicles, plummeting used car prices, and shoppers who are tentative to purchase in an uncertain market, it is time to go back to some of the playbooks of old (pre-2020) and truly look at what it takes to win a customer who has the privilege of choosing between available inventory and dealerships.
Let’s discuss how you can engage with customers quickly, effectively, and provide an experience that will win them over.
Implementing Tech-Enabled Engagement Solutions
Technology solutions are becoming increasingly important for dealership operations, especially when it comes to engaging customers quickly and effectively. This includes everything from digital forms of communication such as text messaging and email marketing to using your dealership website as a platform for customers to browse and compare vehicles or schedule an appointment. By leveraging technology solutions, you can ensure that your dealership is able to engage with potential customers wherever they are - be it on-lot or online.
One important caveat–technology is great until it isn’t. At BCP, we have found that the use of real people in conjunction with great technology provides the best of both worlds. Live agents responding to customers utilizing intelligent technology is the most efficient, cost-effective, and transparent way to work with your customers (and provide them with the answers they need).
Some people + technology solutions to consider adopting:
- 24/7 lead response that utilized live agents and technology (NOT an autoresponder)
- 24/7 Agents who will engage with your customers via SMS/Chat (live people, not a bot)
- Robust tools that allow you to text campaigns to customers, accept payment and solicit reviews with a few simple clicks
The name of the game is providing a custom, easy, and enjoyable experience for the customer. And the dealership that does this fast and well has the best odds of winning the customer.
Providing A Personalized Experience
In addition to utilizing tech-enabled solutions, providing a personalized experience for each customer is key for successful customer engagement in the automotive industry. For example, offering custom payment plans and the ability to do this all online is critical as we continue to grow this element of the business.
Digital Retailing Tools are a necessary component of any website. But having the tool is not enough. There needs to be a well-planned online buying experience that transitions the customer from the Digital Retailing Tool to a true purchaser.
Online buying experiences offer just that, giving them the ability to research and select vehicles from the comfort of their own home. Offering an online buying experience is a great way for dealerships to provide value to potential car shoppers and increase sales. Here's why:
- It eliminates a time-consuming physical visit to the dealership. Customers can quickly view available models and prices from the comfort of their own space.
- Shopping for a car online also allows customers to compare models, features, and prices more easily than ever before.
- Consumers have access to more resources such as reviews, specifications, and photos in order to explore product options without having to go into the store.
- An online buying experience provides transparency in pricing and other details so customers can make a more informed decision.
- It helps dealerships create a better customer experience by engaging with customers through various channels.
By offering an online buying experience, dealerships can stay competitive in today's market by providing value throughout the customer journey and removing roadblocks. This provides customers with greater convenience while also giving them confidence in their purchase decision knowing they have access to all of the information they need before making the big purchase.
Establishing trust between dealerships and their customers is essential when it comes to successful customer engagement. Transparency about pricing, product availability, and any other information related to purchasing or leasing a vehicle will help create trust between you and your customers. Additionally, creating an open dialogue where questions are answered promptly will also help build strong relationships between dealerships and their customers that last far beyond just one purchase or lease transaction.
As noted above, responding to customer inquiries in less than 10 minutes, regardless of the time of day, and providing the customer with answers to the questions and information requested will increase the trust between the customer and dealership.
Encourage Reviews and Testimonials
The best way to win over a potential customer is by giving them proof that other people are happy doing business with you. Encouraging reviews and testimonials from current customers provides legitimacy; it shows prospects that other shoppers have had positive experiences working with your dealership, which makes them more likely to do business with you as well. Plus, reviews empower prospects by providing them with real opinions on what it’s like working with your dealership rather than relying solely on marketing materials produced by your team.
There are some fantastic review solicitation tools in the market. Make sure you choose the one that works best with your team and is one they will actually utilize.
Pro-Tip: When soliciting a sales review, ask the customer to complete the review while they are waiting for F&I. They still have the new car smell in their nose, but have not had to go through all the paperwork yet
We have moved away from the automotive shortage of 2020 but this doesn’t mean that engaging with potential car buyers will be easy - if anything it means that now more than ever dealerships need to focus on creating a positive customer experience through utilizing tech-enabled solutions, personalizing experiences based on individual customer needs, and establishing trust by being transparent about pricing and product availability information. By implementing these strategies in your dealership operations you will be able be sure that you are engaging with potential car buyers in the best possible way!