So what are your internal auction lanes exactly? The first one is easy. It’s the trade appraisal process you have in your store. Is it efficient, is the process sound, does it give your potential customer the idea that it’s somehow different from your competitor right next door? Have you ever been to a Carmax store? They are different, you should be too. This reminds me of an advertising slogan Jim Hudson Automotive Group in the Carolinas uses. “Experience it once and you’ll never forget it.” Take a good hard look at your appraisal process.
The second one is not so easy. A great deal of auto retailers don’t leverage an equity mining tool. This is a huge benefit they are missing to produce more trade-ins. Having a strategy around equity mining is key in today’s challenging market. The traditional marketing outlets are so ineffective and expensive. Most dealers believe that it takes $300 just to get a customer to drive on the lot. That’s an insane amount of money if you think about it.
The third is having a strategy to work the service lane. I truly believe this is the key missing piece of the puzzle auto retailers have been trying to figure out for years. I want to concentrate on this one.
Service Lane Appraisal
All of us that have been on the retail side have been told to go work the service lane at one time or another in our career. We have also told our people to do the same more times than we probably would like to admit. But one thing holds true, most of us have probably never given our people the tools or the strategy to get the job done in finding a few front end car deals from service. Usually our conversations start with something like, “None of your buddies work the service lane because they are just too lazy.” Or how about this one, “Go give out some free donuts and brochures?” I’ll admit it. I can’t tell you how many times I have said the same exact things. And then of course, there’s the service writer that thinks the sales department is trying to get in his pocket by picking his customer away before he gets to make his paycheck.
So how do we effectively work the service lane? How do we do it in a way as not to offend our customers that are just there to get in and get out as quick as possible? How do we build teamwork between service and sales? And if we’re successful, how do we compensate? I’ll tell you how, and it starts with technology. Some of our most successful Inventory+ users have a tested and trackable way of working the service lane. Those dealers have what I call a Soft Approach Appraisal process that every customer experiences.
While some customers in the service lane don’t want to be bothered by a salesman, others are curious about the potential of upgrading their old car for a new one. Why not offer an appraisal on every single vehicle that runs through the service lane? Too much work? Too inconvenient? Not with a good quality vin scanner in your service writer’s hands. After the service repairs are done is the most effective time to offer up a trade in value. Offer it up in writing with pictures of the trade in. Show value added dollars because of the service that has just been done. It has to be quick and it has to be easy. Attach an offer with every repair ticket period. It’s right there inside Inventory+ and so easy to use.
How to compensate? Your service writer will jump at the chance to earn a spiff every time he scans a vin and it successfully ends up in the trade lane. Process, process, process. It makes a difference once you calculate what a 3% to 5% closing ratio brings you in gross profit. If you don’t ask for those additional trade-ins, your competitor will!
From appraisal to acquisition to stocking to merchandising to pricing to syndicating to disposing, our tools provide opportunities to maximize the value of your inventory investment every step of the way.DEALERSHIP INVENTORY
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