How to Still Win When the Chips Are Down
The pain was slow in coming. But once the COVID-19 virus began spreading, dealerships that didn’t immediately turn to digital retail or were not already digital, took a big hit. Worried consumers stayed away from showrooms and OEM factories were shut down. Dealers soon found themselves in uncharted territory; and nobody had a map to lead anyone out. As a result, auto sales went down by 14.6 percent for 2020.
That was the bad news. The good news was that a year later, auto sales picked up again. Dramatically. With vaccines freely available, safety measures in place, and a pent-up consumer demand ready to buy, commerce roared back to life.
Then bad news reappeared — and lingered — with the rise of the Delta variant. And, as it turned out, there was more to come. It seems, COVID-19 is the industry disruptor that keeps on disrupting
Enter the Chip Shortage
In an odd and unexpected twist, semiconductor chip manufacturers earlier had shifted production from vehicles to personal electronics, in part to meet increased demand for home devices created by post-Covid-19 social distancing. Ultimately, this created a chip shortage. And since new cars can require up to 1400 computer chips to manage complex systems, the chip shortage disrupted manufacturing, which, in turn, kneecapped new vehicle sales.
Overall, the chip shortage is expected to cost the global automotive industry $110 billion in lost revenue in 2021, according to a May forecast from consulting firm AlixPartners cited by CNBC.
Lead time between chip production and cars hitting the market can run several months. So, what are a dealership’s best options for sales in the interval, especially when consumers are chomping at the bit to buy?
CRM to the Rescue
Thanks to the computer chip shortage, the retail automotive industry faces a classic short-term supply and demand problem. Cars sell as soon as they hit the lot. Unfortunately, dealers don’t have enough new car inventory on their lot because of the current bottleneck. It is ironic that just as consumer demand surges, new products still sit in the manufacturer’s lot waiting to be completed.
All is not lost, however. A solution already exists within each dealership. Dealers who want to immediately benefit from consumer demand can turn to their CRM for help. As a repository of all things great and small about customers, your CRM is where to look when it’s time to pivot.
3 opportunities to leverage sales from your CRM in the coming months.
- Promote Your Certified Pre-Owned Vehicles. Identify customers in your database that have a position to trade in their current vehicle for a newer one with little or no increase in payment. Today’s buyers are out there, ready to make their next purchase. In some cases, new vehicle models will take months, instead of weeks, to deliver, because of the chip shortage. Don’t make your customers wait. Find matches in your current inventory, through data-driven equity mining. It is important to look for matches representing exact to-the-penny payment offers.
- Give Your Customers Options. Structure deals that identify multipayment offers for finance and lease or both side by side. Make sure to calculate each deal using a best-in-class calculation engine, such as Market Scan. Use a comprehensive and dynamic database of lender programs, as well as OEM rebates and incentives. Improve your chances of closing a deal by structuring the best deal for the customer and your dealership.
- Upsell Your Service Clients. Search your CRM to identify who is coming in for service. Create a list each day for the service drive managers of all customers that could trade out of their current vehicle. Give customers a bonus for each vehicle traded or purchased by placing an offer in their windshield when they pick up their car. If the customer had to pay any out of the pocket expense for service, offer to reimburse 100% of the repair.
A Shoutout for Digital Retail
While COVID-19 was shutting down showrooms and factories, digital retail marched on. This has been especially true for dealerships with digital retailing at the core of its CRM—and not merely a bolt-on application.
Digital retail empowered consumers to review vehicle choices and negotiate from the convenience of their home. Likewise, it enabled dealers to structure deals without the stressful back and forth of in-person haggling.
Your CRM can tell you all you need to know about your customers. Don’t let a sale delayed become a sale denied. Mine your CRM for continued success.
We help dealerships thrive in a digital age by empowering them with the technology they need to serve their customers with efficiency and transparency.
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