With January Comes Opportunity

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It may seem counterintuitive to ramp up your marketing in January, but there are several valid reasons why not cutting back or going dark makes more sense.

  1. Tax Refund: Very few people wake up in the morning and decide to buy a vehicle that afternoon. Usually, there is a catalyst. Expensive car repair or one on the horizon, year-end bonus in hand and ready to spend, anticipation of a tax return earmarked for a new vehicle. Customers are in the shopping mode and you need to be visible.
  2. Year-end Trade-ins: Having quality trades from year-end sales and not telling anybody is like winking at someone in the dark.  If you don’t put strong marketing in place to let the public know, then you know what you’re doing, but nobody else does.
  3. Momentum: Dealerships run on momentum. Sales beget sales, service begets service and you can feel positive attitudes throughout the dealership. Keeping momentum after the yearend is the hardest mental challenge you’ll face all year. Continued advertising shows your team and the public you’re the place to do business.
  4. Competition: The car business never stops. Consumers don’t take off days. If they’re even thinking about buying a vehicle they are online and paying attention to advertising. What they are looking for is an excuse to pull the trigger. A reason to buy now. If you’re not providing a reason, the competition will.
  5. Hiring: Your dealership needs quality staff that can offer a top-notch customer experience on both the sales and service side of the business. For each day your dealership has an open sales role, you can lose up to $800 in gross profitability, and this number jumps to $1,200 for open service roles. December and January are also high-volume months for job applicants. Businesses across industries see an increase in job applicants throughout December and January, as employees start setting personal and professional goals for the coming year. You compete with other dealers. The dealer seen as aggressive and supportive of their people will get more consideration.
  6. Profits: Rarely does anyone ever save their way into a profit. You have to sell something, and for that you’ll need traffic. The only sure way to generate traffic is to be out there. You won’t get a hit if you don’t swing the bat.

The smart money?

We admit that January is a buyer’s market. As such, we have specific opinions on where is the best place to spend your money.

Digital
  • Consumers spend an average of nine hours researching online before walking into a dealership, visiting an average of seven automotive sites, including manufacturer, dealer, and third-party websites.
  • The most influential factors in consumers’ selection of a dealership are, by far, a low price and having the right inventory. In fact, consumers are almost twice as likely to pick a dealer that identifies as having the “lowest price” over reputation.
  • Consumers prefer to do the majority of fact-finding online, and face-to-face communication becomes increasingly important to them at the end of the process, analysts report. More than three-quarters (76 percent) of consumers think they will get a better price by negotiating in person as opposed to online.
Service Lane Marketing
  • Your customers are your #1 source of new business.
  • Sales tools are available to identify customers in a position to trade.
  • 80 percent of sales emerge from appointments made online. Only in the service lane can a dealership talk to a customer ahead of time.
  • January is the perfect month to work the service lane due to it being in the heart of winter with two or three more months to go.

We’re not saying to go wild and bust the budget in January. What we are saying is there are still plenty of customers, and with a little effort and a little budget, you can keep your dealership motivated, maintain year-end momentum, and increase your profits.

The Future Is Your Service Lane

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Note: This blog is a combination of information from industry experts, publicly held companies and Automotive News futurists.

“For hundreds of years, the horse was the prime mover of humans, and for the past 120 years, it has been the automobile. Now, we are approaching the end of the line for the automobile because travel will be in standardized modules.” – Bob Lutz

Dealership Structure Will Change

Experts are predicting that dealerships of the future will split into thirds over the next 10 to 20 years. One third will be for mobility services, i.e, autonomous vehicles, fleet and subscription-plan management services. According to an Automotive News article, “In the new world, some consumers want group leases on one self-driving car to share or to buy monthly subscriptions that allow them to switch from one kind of vehicle to another as their needs change day to day. In addition, large fleets have emerged offering ride-hailing services to either their members or the general public. “

Another third will come from those consumers who own a personal vehicle and either use it or monetize it by renting it out when they aren’t using it.

Refocus on Service

The final third is in service. No one can predict what the future vehicle will look like, but whether it’s autonomous, electric, ride sharing or subscription vehicles they’ll have to be serviced somewhere. If the future of the dealership is mobility centers, then upping your game in service now makes perfect sense. Service has long been the most profitable part of a dealership. In the Automotive News article “Forecasting the Future of Auto Retailing” the authors predict that “for the most part, the dealership of 2030 is fleet management and distributions centers. They have the capital to invest in new tools and training for service technicians to adapt to electric, autonomous vehicles service and maintenance requirements, as well as those of rapidly proliferating drones.”

This is a good thing. Chances are that these vehicles, because of the technology, will have strict service cadences. They’re not going to let just anyone maintain, upgrade and service these vehicles. If dealers can get past selling tangible assets such as cars and trucks and look at themselves as mobility and technology centers, the possibilities are endless.

What can you do now?

Focus on your service department now!

Offer same day/next day appointments

The aftermarket competition will tell your customers that they can bring their vehicle in “today” or “tomorrow.” So your answer has to be one day.

Optimize shop productivity 

If you are at 100 percent or higher, you need to hire technicians because you can’t reduce the wait time for your customers to come in unless you have the capacity to complete the repairs in a timely manner.

Refine your appointment process 

If you are like most dealers, 80 percent of your customer pay sales start with a telephone call to your dealership. Most of these calls go to a Service Advisor. In other cases, they go to a BDC, CDC or to an appointment coordinator.

Call “no-shows” 

Everyone has customers who do not show up for their appointments. Oftentimes, they just forgot.

Call customers on special order parts

If you walk back to your parts department you most likely will find a section of bins that your Parts Manager has designated for “Special Order Parts.”

Schedule your customer’s next appointment

Before your customers leave your dealership, you should automatically schedule their next service appointments based on time and/or mileage. Give them a card with the date and time of their next appointment.

2030

If the prognosticators are correct and the future will be here by 2030, then there is no time to waste. The sooner you get your customers trained and accustomed to coming to you for service, the better off you’ll be. Automotive News reports through a COX Automotive study that franchised dealers are snagging fewer than one-third of repair orders. The average vehicle makes 2.7 service visits a year. Quick-lube shops, tire stores and independent repair outlets account for about half of these visits; dealers take 30 percent, and the rest go elsewhere — body shops, retail stores and specialist businesses.