Helpful links for dealers:
NADA COVID-19 Hub: https://www.nada.org/coronavirus/
NADA Lifeline Webinars: https://www.nada.org/coronavirus/webinars/
COVID-19 J.D. Power Auto Industry Reports: https://discover.jdpa.com/en-us/covid-19-jdpower-impact-reports
Additional Revenue Streams for your Service Department
At the moment, there are a lot of dealerships facing the temporary closure of their sales departments. For many, that means that service departments are more important than ever. An already essential part of the business has become a lifeline. That means dealers need to focus even more on ways to maximize the value of their service departments.
Some dealerships have thought creatively about their service center and how they can innovate to provide customers what they need while also increasing revenue for the dealership.
Here are three examples we've recently heard about from dealers in our network:
- Service Contracts. A service professional can broach the topic and connect the customer to an F&I professional who can help the customer learn more about their options. Not only does it help the dealership continue selling a profitable product while the show room is closed, but it's also introducing it at a time when a customer is likely to be receptive.
- Financing Service. What's another option that customers would find helpful? Offering customers the option of financing service fees so that they don't have to pay a large fee all at once, upfront. This can give customers peace of mind, while also allowing the dealership to earn extra income.
- Digital Insurance. What if your customer checked their auto insurance at the dealership and discovered they could lower their monthly payment by $60 per month? Using a digital insurance platform can help customers increase their monthly budget and better afford the service they are receiving. The right program can also offer the dealership ways to earn additional revenue for themselves and their employees.
Of course, the key to all of this is to remain empathetic with the customer.
Don't sell them what they don't need, but do listen to their concerns and offer them options when appropriate.
As of Monday, March 20, dealers are feeling uncertain
Just under 40% of dealers surveyed in the DealerPolicy network were still conducting business as usual, though 41% were keeping a watchful eye.
Overall feelings about the state of the business showed dealers were not panicking and indeed some 20% still rated themselves as feeling optimistic or very optimistic.
A lot can change in a week, so we will continue to check in with our dealers.
What are some things you can do in the short-term if your dealership is still open? Here's the top 3.
- Consistently sanitize surfaces and make sure your customers know that you are keeping an impeccably clean retail space! Not only is it keeping you and your employees safe, it's letting your customers know that you care about their health and safety too.
- Call every prospect and customer on the phone and check in on them. Use the opportunity to build relationships with people and let them know you care. Even if they don't need a car or a repair at the moment, they'll remember you reached out to them. You might be providing a bright spot in someone's day - someone who has been stuck at home for days on end.
- Embrace digital. You knew it was heading there, and now it's going to make or break your business. Even if your dealership is open right now, there are still some customers who may be afraid to come in. Offer video calls with these customers. Make sure you have excellent photographs and videos of the inventory on your lot to share. Make it easy for people to purchase over the phone by investing in software that allows for digital signatures. Offer to deliver their cars to them.
What are some things you can do to stay ahead?
In our blog post earlier this week, we dug into some things dealerships can do to use the time well. It may feel like this is forever, but things will rebound and you'll want to be ready.
Given the current environment, dealers are facing a lot of unknowns. But there are a few things that everyone should be doing to minimize the effects of the Coronavirus on your dealership. Start by taking a deep breath, staying calm, and following the advice of the CDC.
- Stay positive. Keeping a positive outlook helps both your team and your customers. Maybe you’ve had to cut hours or even close the store for a short period of time. By keeping focused and staying positive, your dealership WILL recover from the short-term economic effects. When things return to normal, there may even be pent up demand; after all, interest rates have just been cut to near zero.
- Re-evaluate Vendors. Take a look at where your money is going and understand if you’re benefiting in the ways you expected and hoped. Consider new vendors as well – were there some that had piqued your interest in the past, but you didn’t have time to fully investigate? Now’s the time to listen to pitches and do further research to understand if new products might be beneficial.
- Investigate additional sources of income that can be earned through your dealership. A Digital Insurance Program for dealers is a great example of a program that can help you weather economic downturns. With some programs, you can earn recurring income for years to come through a licensed Sub-Producer.
- Scrutinize Your Data and Optimize. Been so busy you haven’t had a chance to really dig deep into your metrics? Now is the time to do it. Find out what’s working and what’s not. Create a plan to streamline processes so that you’re as efficient as possible when you’re up and running at full speed again.
- Train Yourself and Your Team. If things are slow, use the opportunity to train your team. Maybe everyone could use a refresher on sales tactics to help advance their careers long-term. Or maybe the dealership has a few software programs that you know you could get more out of if everyone knew how to use them to their full potential. Investing in your employees at this time is the right thing to do and will also reap benefits in terms of loyalty.