For years, dealerships have used the “we need your trade” line to drive traffic into the showroom, feigning a shortage of used vehicles. While dealers have always had a need for quality trades, COVID-19 has created a real shortage of both new and pre-owned inventory. With the new car shortage, there is nothing to do but wait for the factories to catch up. The used car market is a different thing entirely.
The best source of quality used cars and trucks are the cars and trucks you sold new. Your best prospects are in your own back yard – your database and it takes a strategic approach to properly mine your database and your customer trade-cycles.
Why are they your best prospects?
- You know the history of the vehicle
- You have all their service records
- You know how they were closed the first time
- You will see higher grosses
- You will see a higher CSI
- They are not shopping you against another dealership
- No marketing costs
If you already have an upgrade system in place, you are likely using an equity mining tool (RevenueRadar, AutoAlert, DealActivator, etc.) to slowly feed your prospects into your CRM. We like to call this the “drip method,” because of the daily drip of prospects from the equity mining tool.
AllCall has found that although the “drip” can produce good results, a firehose is much more effective.
When marketing to customers who are not shopping, creating urgency is key. Instead of reaching out to notify prospects that they are in a good position to trade, make your customers feel like you need their vehicle immediately.
Stage a three-day private event solely for your database customers with a high conversion potential and invite them in to upgrade into a new vehicle. In order to ensure your event is a success, make sure you observe these guidelines:
- Build a rich list of customers with high conversion potential
- Create a script and review common objections with agents
- Build and deploy an invitation email or mail flyer
- Call every customer on the list and leave a voicemail if you do not connect
- Designate someone to host the event and greet customers
- When possible, schedule customers with the sales rep they purchased from
- Be prepared to work some deals over the phone
What to Expect
You can expect a 20-25% connection rate from the phone calls and a 20% appointment conversion on contacted customers. This will produce forty to fifty appointments leading to thirty to forty showroom visits. You can also expect to generate hot leads from the calls and emails. These are customers who are interested, and need follow up. Many customers will just show up. Their reception process is just as important as a kept appointment, so be prepared to make them feel welcome.
The upgrade process is a win-win-win. The customer gets a new car, and you get a great trade-in for the next customer. You have renewed an existing customer and gained a new customer as well.
So, need used car inventory? Look no further than your own back yard.