Reduce Your Reliance on Auctions
In this tight market for quality pre-owned inventory, auto dealers must be creative if they want their used car lots stocked with attractively priced vehicles their markets desire. One highly effective way to accomplish this is to mine certain existing customer/vehicle profiles from your dealer management system (DMS) data. Then offer these existing customers trade incentives they will find difficult to ignore. When done properly, data mining marketing like this can help your dealership improve retention, become less reliant on auction services, and reduce auction fees and transportation costs.
This strategy sounds straightforward, and it is. However, some finesse is required to succeed at it.
First, as with most opportunities in sales and service, if you’re first to offer an attractive deal you’re more likely to win the business. Thus, being first in opportunity discovery—for the right customer, with the right offer, and the right time to acquire their high-quality trade—is your goal here.
Second, consistent success with this approach requires that you possess some special advantage. This edge is found at the convergence of various data mining matrices. It is at these key points where existing customers most likely to respond to your marketing appeal will appear.
Thus, the following strategies can work well to help you be first to discover and then market to customers matching your data search parameters. Here then are proven opportunities to source CPO-quality units from existing customers and sell them a new or newer model in turn:
· New model/same terms trades: Mine your database to identify customers driving models in demand in your market and have equity in their vehicle. Structure the trade using current market incentives and flexible terms that enable you to put them into a similar new or newer unit at or near their former monthly payment and with little or no money down.
· Lease and finance end trades: Mine your database to identify lease-end or finance-end customers owning desirable models. The key to retaining these customers is to contact them months earlier with your superior offer than finance companies, banks, or other dealers typically do. Structure the deal according to the suggestion in the point above.
· Penalty-saver trades:Mine your database to identify customers whose leased vehicles are nearing the mileage at which the lessee is likely to risk incurring over-mileage penalties. Appeal to their desire to avoid these costs. Structure the deal according to the suggestion in the points above.
Mining your data for nuggets of gold like this will help you source well-maintained, quality pre-owned units you originally sold and serviced. Success here means quality trades for your pre-owned operation, reduced auction-related fees, and, as many dealers experience, a need for less advertising spend.