Modern technology allows dealers more options when it comes to finding used inventory.
Necessity, as they say, is the mother of invention. In the current economic climate, dealers have faced a raft of challenges.
Firstly, the onset of the COVID-19 pandemic forced many dealers to close their showrooms and migrate selling and a good deal of service business online.
Today, with showrooms and service departments open once again, another set of challenges are impacting automotive retailing, namely sourcing inventory, both new and used.
On the new-vehicle side, global supply chain shortages, in particular semiconductor chips, have forced many OEMs to either curtail or in some cases halt production of certain models.
With little new inventory available, consumer demand has put pressure on used car prices and inventory supplies. The result is that dealers are often having to work overtime in sourcing used vehicles and re-think both retailing and wholesaling practices.
Own customer database
One way that dealers can find the vehicles they need is through their customer database.
“Undoubtedly [your customer database] is a critical source for qualified leads”, explains Greg Uland, Vice President, Brand Marketing at Reynolds and Reynolds.
He explains that in uncertain times like these, dealers need to think sincerely about what a particular customer’s needs are and must strike “a balance between ethical equity mining” and “squeezing blood from a turnip.”
Ensuring a dealership can source inventory effectively through its existing customer database also requires that it has an effective DMS that is up-to-date, and that information can be shared effectively across all departments within the business.
From this, dealers can use sophisticated solutions “that can develop and analyze buyer profiles based on specific demographic markers, creating sales opportunities where none may have existed before,” explains Uland.
Sourcing potential used inventory through your service customers also requires proper coordination between both departments as well as assessing the performance of each and the DMS currently in use.
According to Michelle Cole, Head of Growth Marketing with Keyloop, dealers need to ask themselves some hard questions.
These can include knowing which departments are proving positive for the business and which are costing it money.
For example, gauging the efficiency of the current DMS and analyzing whether it is causing more work for staff instead of saving time and, as a direct result, whether the dealership is losing sales opportunities or employee hours because of inefficiencies in the system.
If the store is looking to upgrade or replace its existing DMS, key objectives should be to provide better options for sourcing inventory and improve efficiency and customer service.
Michelle Cole at Keyloop says that the dealer principal and or senior management team need to “look for a DMS that can offer a single-view system for the whole business.”
She also feels that dealers should take a look at the integration capabilities of the DMS they’re considering, otherwise, it can cost them a lot of business opportunities.
“Someone might visit a dealership’s website, look at some vehicles and do their research,” explains… “but if the website and the DMS don’t talk to each other, the sales team are none the wiser on the desires of that potential customer.”
At Reynolds and Reynolds, Greg Uland says that ensuring information is accessible across the entire dealership means creating solutions that form part of a single Retail Management System.
When it comes to sourcing used inventory through service customer databases, Uland says that at Reynolds & Reynolds, three specific product offerings come to mind.
The first is a CRM solution (known as FOCUS at Reynolds and Reynolds) that’s designed to enable both salespeople and BDC representatives to effectively manage every single customer interaction as it happens in real-time.
Doing so says Uland, allows the dealership’s management team to track performance as well as train sales staff in real-time.
The second is offering self-service kiosks, like those from GoMoto which turn the tables, empowering customers to take control of the service experience while at the same time allowing each to get an equity evaluation on their existing vehicle, forcing the upsell and increasing the chances of receiving a qualified offer from the sales department.
Another key consideration when it comes to used vehicles is reconditioning, both in terms of time and cost. ReconTRAC, offered by Reynolds and Reynolds is a software platform that allows dealers to effectively speed up and manage the reconditioning process.
“It features a customizable interface that allows users to digitally create customizable workflows, such as work order creation, inspections, approvals, repairs, and more,” says Uland.
Ultimately, the key to sourcing inventory in tough times requires a smooth, seamless and frictionless process that touches all points of the dealership as well as every aspect of customer interaction with the store.
Therefore, investing in a mobile-enabled DMS that can integrate with other bolt-on functions, including CRM and service retention/inventory sourcing, is essential to finding the right vehicles and matching them with the right customers.
Instead of having customers transition from sales to service, what’s happening instead is the creation of this seamless, ongoing digital experience with your dealership,” explains Uland.
“Not only is it good for the customer, because it’s more flexible and more transparent, it’s also empowering for the dealer, because it creates an opportunity for an ongoing dialogue focused on meeting the customer’s needs.”