Most dealerships today are concerned with selling more cars, more new and infinitely more used. Most dealerships center their CPO or used car team around buying good pieces for a good price, then turn the car as quickly as possible. This is a great rule of thumb to live by, however I would like to show you a way to buy better cars, save you more money and grow you profits.
This is a very simple process that involves all three departments in your dealership and the best news is that all three departments get to make money. You will need to have either a good BDC (Business Development Center) or a well trained sales team to accomplish the plan I will outline. Using your Internet sales marketing team may work well in certain instances for some dealers. I have had great success with using an in house BDC to facilitate all of the dealerships marketing, call backs, appointment lost sales, declined service calls and campaigns.
First you need to track all of your lease end inspections and start sending mailers at around 120 days before lease end. The outline of your mailer is simply;
“We noticed that your lease is ending soon and invite you to come in for our complimentary lease end inspection. Our expert service team will inspect the vehicle before it is returned to ensure you aren’t saddled with costs at time of lease turn in. While you are visiting our award winning facility we would enjoy showcasing for you our latest models. Please feel free to enjoy taking a test drive in any of our new or pre-owned models”.
This can be done two ways, one is to send out an electronic mailer inviting your customer to book the appointment and the other is to call the customer and explain the inspection. Personally, I like the call first and if the customer doesn’t schedule the appointment then you should follow up with the mailer with a direct link to schedule the appointment on line.
Once you know the customer is booked in for the inspection you now have the possibility of performing two things during the customer visit. The first one is obviously the inspection, the second is to have one of your sales team members speak with the customer about leasing or purchasing another vehicle or buying out the vehicle with a lease to retail deal. (Preferably the original selling client advisor should speak with the customer, they already have already built a relationship from the prior sale)
Remember the customers vehicle is now in the service department going through the inspection, this allows you to position any repairs the vehicle may need through warranty as well as having any of the cosmetic damage repaired by the customer before turning the vehicle in.
If you position the pricing of items such a body work, dent repair and rim rash repairs cheaper to the customer then your manufacturer repair pricing, you should be able to have the vehicle in tip top condition should your facility wish to purchase it. Thus your profit margins have increased due to the fact that YOU don't have to spend much money on reconditioning fees
The customer is going to get charged for damages one way or the other, you might as well give them a cheaper cost on outside influence or cosmetic damages and retain the vehicle for your inventory. This makes sense for all three departments! The service department makes money from the repairs, the parts department sells more parts and your sales department buys a better vehicle requiring less investment and therefore you will be able to sell the vehicle at a higher gross. Who wouldn’t want this kind of scenario to help their business grow?
This venture takes planning, commitment and execution skills from your BDC or sales team as well as constant communication between the service and sales departments to notify key members when vehicles are scheduled in for lease end inspections. This small step also allows you the opportunity to use what some manufacturers call the pull ahead lease program.
The pull ahead lease program in essence is when the customer wants into a new vehicle ahead of time within the confines of his or her lease, in most cases it is 90 days or three months, by optimizing the pull ahead program you will now have the opportunity to sell more vehicles and retain quality pieces for your CPO sales lot.
The other nice feature of this program is that if you know the vehicle is being turned in at your dealership in 60 days or so and you have designs to purchase it, you can then have your sales people informing clients looking for this particular model and possibly pre-sell the vehicle before you have even spent a dime. Once the lease end inspection is completed and the vehicle has been courtesy washed, have your CPO sales manager take a few pictures of the vehicle.
Keep a portfolio of future acquired vehicles to show customers that are interested in used vehicles, it costs you nothing and you are sure to make some sales especially when you communicate to a prospective client that the maintenance is up to date and the vehicle was serviced regularly at your facility. Always think five steps ahead and figure out where you can cut expenses and make profits that best suit your facility. The best way to cut your sales expenses is to purchase vehicles that require minimal reconditioning, this is also the best way to make greater profits.
``Helping to Keep You in the Black, One Dealer at a Time``
David
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