While the past year has been challenging for dealers and OEMs alike, few dealers were prepared to overcome the inventory crisis in 2021.
In our third Crack the Code workshop, Team Mastermind equipped and empowered dealers to continue marketing, selling and acquiring vehicles even amid inventory challenges, offering both tips and tactics from the field as well as expert advice during a live dealer panel.
During the panel discussion, Mastermind Chief Commercial Officer Andrew Rains was joined by industry experts Jim Wilkinson, General Sales Manager at Fred Haas Toyota World, Amber Murray, Marketing Director at BMW of Tyler and Jason Dwyer, Senior Dealer Relations Manager at automotiveMastermind.
Throughout the session, the panel discussed a variety of tips, tactics and advice for dealers overcoming inventory challenges. While the specific strategies shared will need to be tailored before being applied at your dealership’s specific needs, some common best practices and themes arose.
In this blog post, we’ll share notable highlights from our recent dealer panel and how dealers are cracking the code on selling, acquiring and marketing amid inventory challenges, including:
· Continuing to sell in an inventory crisis
· Acquiring useful vehicles in an inventory crisis
· Taking a data-driven approach to customer communication
Continuing to Sell in an Inventory Crisis
“The best leaders see challenging times as an opportunity,” said Andrew Rains when opening the session, setting the stage and tone for the panel. There have been few more challenging times for dealers than this year. According to IHS Markit, 1.44 million units were lost due to production delays in Q1 alone, doubling to 2.60 million units in Q2. Early estimates from IHS Markit put Q3 losses at 3.1 million units (and rising).
But even amid these challenges, new opportunities are arising for dealers – namely when it comes to customer care. Whether it’s related to buybacks, trades or offering early lease returns on low-mileage vehicles, with so much uncertainty surrounding availability and steep competition to capture buyers, the dealers who are able to engage buyers with clear, consistent communication will stand out from the pack.
“Through the recent challenges, it’s required for more relationship building due to the fact that now, a transaction from inquiry to taking a delivery could be a month stretch,” noted Jim Wilkinson during the panel. To prepare his team for longer or more complex customer interactions, “we did soft skill training, separating wish lists from wants and absolute have-to-haves,” explained Jim. In addition he offered his sales team the tools, resources and responsibility they needed to fuel those customer conversations.
This point also with panelist Amber Murray, noting “communication” has been critically important, especially when it comes to customer interactions. “If our customers come in and order a car, make sure we stay on top of it,” said Amber. “Communication is the most important [lesson] we can take away from this today.”
To ensure your dealership is effectively maintaining contact with buyers, assess your messaging across channels. From your website to your talk tracks to your on-hold recordings, your messaging needs to keep customers informed on the topics they care about most. This includes details related to placing pre-orders, the availability of popular models and updates regarding highly sought-after, out-of-stock models.
Engage Customers Across Channels
Finally, to build trust with buyers, look for opportunities to engage customers across your dealership’s channels on their terms, including self-serve elements on your dealership’s website like trade-in calculators or credit applications. This is especially important for customers who are purchasing vehicles sight-unseen such as those placing pre-orders or reserved sales. To offer those customers additional peace of mind, offering test drives in available models is key, as well as video walkarounds for in-bound vehicles.
Acquiring Useful Vehicles in an Inventory Crisis
For most dealerships, it hasn’t been easy to keep lots populated with any vehicles, let alone in-demand and highly sought after pre-owned models. With production disruptions further delaying new vehicle deliveries, demand for pre-owned models has surged. According to NADA’s Q3 analysis and the Manheim Used Vehicle Index, pre-owned wholesale vehicle prices hit a new record high at the end of Q3, up 27% from the same time last year.
Faced with sky-high auction prices, many dealers have pivoted their marketing strategy to focus more heavily on pre-owned acquisitions, a point highlighted by Mastermind’s Jason Dwyer during the panel. “Outreach has transitioned from ‘let’s sell new cars’ to ‘let’s turn our pre-owned inventory even faster than we are now’,” explained Jason, adding, “let’s utilize things like our cash portfolio to source vehicles – especially ones that have low miles.”
Engage Customers Early
To acquire those low mile trades and buybacks, Jim Wilkinson emphasized the critical importance of engaging customers early – 12-18 months earlier than they had in the past. This is critical to reach prospects before the competition and to engage customers while they still have equity in their vehicle to build good will through mutually beneficial offers.
Service Drive Opportunities
Covered extensively in the workshop portion of the session, many forward-thinking dealers experiencing inventory shortages have also looked to their service drive to engage and retain buyers while acquiring in-demand pre-owned vehicles, keeping their dealership and services top-of-mind when it comes time for customers to buy. As loyalty diminishes to six-year lows amid inventory constraints, the service drive offers numerous opportunities for dealers to engage customers, build rapport and promote customer loyalty long after the initial sale.
Keep Customers Informed
Taking a Data-Driven Approach to Customer Communication
One theme that resonated throughout the workshop and dealer panel discussion was the overwhelming importance of understanding your customer, especially as customers’ needs and expectations continue to change.
To dig into the details they need to know about their audience. Dealers need to go beyond stand-alone data-mining tools to take a more comprehensive look at their market.
Using tools like Mastermind’s sales and marketing platform, dealers are empowered to combine the customer data in the CMS and DRM with high-quality, third-party data including financial records and household demographic information to better understand and identify potential opportunities in their market and prioritize their approach.
“Mastermind lets me look deep and really see what’s going on with a customer,” said Jim Wilkinson describing his experience leveraging Mastermind, “it has so many data points that you can really see the patterns of your customer.”
Equipped with these insights, dealers like Jim are able to empower their teams to reach out and connect with customers earlier in their buying journey and before they start shopping around. From here, dealers are able to build trust with buyers through tailored customer touchpoints and messaging such as tailored F&I products or special financing offers.
Mastermind’s Jason Dwyer highlighted the importance of staying ahead of customers, instructing dealers to “look at [their] maturing lease client base earlier, engage them earlier, recommend they order their next vehicle a little earlier than they would have anticipated.”
This empowers dealers to not only build and maintain customer loyalty amid aggressive offers from competitors, it also “puts the customer on ice,” explains Jason, “You take them out of the market. You are essentially shopping them before they shop you, which is what we want every single time.”
While the past year has offered dealers its fair share of challenges due to production disruptions and inventory shortages, plenty of opportunity still remains for dealers who know where to look.