3 Ways to Strategize for Dealership Success in 2021

January 1, 2021 John Kehm

With 2020 behind us, dealership leaders are entering the new year with many important lessons learned on pivoting and keeping their businesses moving forward despite industry disruption. 

Proactive dealerships stayed ahead of the curve by adapting to their customers’ needs, accommodating new buying behaviors and meeting their customers where they are by embracing new sales models. According to IHS Markit, 65% of dealers now expect an acceleration in the development of online vehicle sales and booking platforms.

However, as growing car buying trends cement into ongoing consumer buying habits, dealers are challenged to strategize for success for the long haul – with no time (or resources) to waste. 

In recent IHS Markit forecasts, light vehicle demand is projected to continue to pace the economic recovery this year. In this “baseline scenario,” automotive sales are projected to grow 9% year-over-year in 2021, rising from under 75 million in 2020 to almost 82 million.

To embrace these 2021 car sales opportunities, dealers need to ensure their sales team and process are nimble and ready to adapt. In this blog post, we share three ways for dealerships to embrace auto industry trends and strategize for success in 2021 by: 

  • Putting the right people in the right roles 
  • Refocusing your sales and marketing processes on the customer experience
  • Deploying an inventory strategy driven by data

The Right People in the Right Role

In previous years, your sales process – and your sales team – was likely structured differently than it is today. Dealerships and team members that resisted change and digital transformation inside the dealership now can’t afford to ignore growing consumer demand for new buying experiences. 

With dealers facing increasing tight margins, embracing new sales models continues to be a critical trend in automotive, even as buyers begin to return to showrooms, revealing key efficiencies that will serve dealerships long into the future, regardless of what 2021 looks like.

One important element for staffing your departments with future-ready staff is the understanding of digital retail options and how they can improve overall efficiency. According to a recent IHS Markit study, consumers who purchased at the peak of the pandemic and completed their entire transaction at the dealership interacted with 3.8 dealership personnel on average. This number drops to 3.0 for consumers buying partially online and partially at the dealer and only 2.1 personnel on average for online-only buyers.

With digital platforms automating the process, customers can take a self-serve approach to actions such as negotiating their trade-in, reducing the overall number of staff touchpoints and improving the efficiency of the sales process. 

However, the physical dealership experience is an automotive trend that still matters. The same previously mentioned IHS Markit study found 79% of all surveyed consumers test drove their vehicle prior to purchase – 69% of those consumers at the dealership. 

By embracing an omnichannel approach, dealers are empowered to both implement new cost-saving efficiencies and ensure their dealership’s online and offline experiences are seamlessly integrated. But you need the right team to support the process.  

Audit your current tools and technology to identify opportunities to integrate data from tools such as your CRM, DRM and sales platform to unlock greater impact for your team. Ensure every member of your team can confidently use employee-facing technology and are particularly adept at seamlessly transitioning their approach from online to in-person to offer customers a consistently great experience at every step. 

To foster these skills dealership-wide, talent management and retention are increasingly valuable. When hiring new employees, seek out recruits who are digitally proficient, as well as those who are willing and excited to expand their horizons and seek out ways to grow beyond their current experiences.

Don’t forget to inspire and incentivize your team to continue growing their sales skills by participating in ongoing training and education opportunities. With the increasing popularity of virtual events, these previously cost-prohibitive trainings are more accessible than ever. 

Refocusing Processes on the Customer Experience

When consumers are determining where to buy, regardless if that’s online or in-store, convenience is critical. Research from IHS Markit finds both online and in-person car buyers ranked convenience as the leading factor when deciding where to buy a vehicle – ahead of any other consideration, including price.

Every experience your customers have with your dealership online and in-store should reflect your internal brand values. With dealerships around the country competing for attention and sales, it’s critical to cut through the noise by delivering the right message at the exact right time.

By leveraging high-quality data and intelligent marketing technology, dealers can identify prospective buyers predicted to begin shopping for a vehicle soon and begin targeted and tailored outreach before the competition.  

Personalized messaging helps “cut through the clutter” and consistency is key to maintaining an exceptional customer experience throughout the entire customer journey. This approach extends to maintaining communication with your existing customers to promote future loyalty and to proactively defend against defection. 

For example, service alerts are a great way to keep customers engaged with your dealership after the sale, while also delivering the kind of care and convenience today’s customers crave. 

Committing to an Inventory Strategy Driven by Data

With so many aspects out of a dealer’s control when it comes to inventory constraints, dealership success in 2021 rides on “controlling what is controllable” starting with utilizing the wealth of data locked away in your CRM and DMS to fuel a data-driven inventory strategy

With wholesale pre-owned prices performing consistently strong, many dealers are sending more cars to auction now than ever. But with wholesale prices slowing, some dealers are holding onto trade-ins they may not have in the past to help fill their lots. 

With retail typically generating less overhead than auction, this approach poses a valuable opportunity for dealers with the right customer and market insights. Before sending vehicles to auction, identify prime retail opportunities by analyzing factors like the vehicle’s maintenance history report to better predict reconditioning costs and see how quickly similar vehicles have sold in the past.  

By utilizing behavior prediction technology that integrates with a dealership’s CRM, DMS and inventory data, dealerships can take this approach one step further by proactively identifying owners of in-demand vehicles, engaging prospects driving highly profitable trade-ins before they start shopping around. This allows dealers to effectively automate the process of growing a profitable used vehicle inventory by acquiring in-demand makes, models and trim packages while subsequently improving the customer buying experience.

While by now, discussions surrounding the “new normal” inside the dealership may seem redundant, the processes and auto industry trends that emerged in the last year have changed the way dealers think about how they hire, how they interact with customers and how to manage their inventory. By embracing these trends in automotive, and our new normal, dealers are well-positioned to strategize for success in 2021. 


Want to learn more about how Mastermind can help your dealership maximize your team’s success in the new year? Contact us for a free demo.


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