Like any dealership, you probably take time at the beginning of each year to set very specific goals for your business. It’s safe to say that two of your primary goals are to increase retail sales and decrease wholesale loss.
Many of you just rolled your eyes because, well, aren’t these always the goals? The real question is, have you defined concrete steps to get there?
That’s where we can help. The key to increasing sales and decreasing loss this year is to improve your used car department.
Here are The Appraisal Lane’s top three recommendations to make the biggest impact on your dealership's bottom line.
Involve Your Customers in the Car Appraisal Process
As simple as this concept may sound, many dealerships are still struggling to implement customer assisted appraisals. It’s really not that challenging, however.
Instead of having your customers wait in the showroom while you evaluate their trade-ins, bring them with you. Engage them in the process, guide them through the steps you take to determine used car values, ask them questions about their vehicle, and weave them in as an integral part of the evaluation process.
This step alone sets the customer’s expectations for transparency, trust, and confidence in the trade-in offer you ultimately provide.
If their vehicle is damaged, ask them about it. Get their input regarding whether or not the vehicle was routinely serviced. If there are stains on the upholstery, ask them what they spilled.
Even the simplest questions build rapport and trust with the customer while you glean valuable information along the way. This is especially important because it positions you to keep the deal alive in the event that your offer is lower than what the customer was expecting.
Drive Leads from the Service Lift
Service drive ups are some of the most affordable ups in your dealership - and also some of the most engaged.
Implement a plan that facilitates a collaborative relationship between your sales and service staff. By working hand-in-hand, they can deliver timely, engaged, and loyal customers to your showroom floor.
When that service customer arrives at your dealership, a free car appraisal may facilitate a cost/benefit analysis on major repairs and help to determine the potential for a replacement vehicle purchase.
Do you expect their service bill to be in the thousands? Do they have child safety seats crammed into the back seat of their coupe? Assess your customer’s situation and if the opportunity is there to turn your service drive customer into a retail customer, take it.
Focus on Consistency and Transparency in Used Car Values
Like most dealers, you probably have a number of appraisal tools in your toolbox. No matter what car appraisal methodology you choose, it’s important to establish a process and stick to it every single time, no matter the vehicle.
When it comes to determining used car values for your customers’ trade-ins, it’s nearly impossible to measure performance without process.
You should also strive to create transparency across dealership departments. A great way to do this is to compensate your management team based on total sales/profits, not department-specific performance.
Similar to the service drive example listed above, it’s much easier to generate ups if your managers are compensated on dealership profits as a whole rather than relying on siloed compensation plans. Your staff will make the dealership’s overall bottom line a focus if it’s their collective bottom line.
Most consumers view the trade-in as the starting point on their buying journey. When you optimize your car appraisal process to offer the right used car values, you create an unparalleled trade-in experience - one that creates customer trust, satisfaction, and loyalty.