As 2021 winds down, dealers are still being hit with the effects of the chip shortage. Combined with pandemic ripples and supply chain delays, dealers are feeling the ongoing disruption. Projected loss for 2021 comes in at a whopping 7.7 million units of production. With a consumer base that is accustomed to selecting their model of choice, complete with amenities and color of vehicle, it may come as a bit of a shock to customers when their vehicle of choice simply isn’t available. Here are some strategies you can use to win over a customer despite the chip shortage.
Winning at new car sales during the inventory shortage
New cars are in limited supply everywhere. That means competition is steep. If you really want to win over a customer who will inevitably have to opt for a secondary choice, you’re going to need to provide an absolutely stellar customer experience.
Provide a great customer experience
86% of customers are willing to pay more for a great customer experience.
Here are a couple of ways to easily accomplish a great customer experience.
- Make sure phone wait times are minimal. There’s no shortage of competitors and long wait times will send a customer to another dealer.
- Prep your phone staff and sales people with information. If you can’t supply a customer’s first choice, your reps need to be ready to pivot quickly and identify a replacement based on your inventory. What are your customer’s primary concerns? Seating capacity? Gas mileage? Identify what matters and be ready to speak to alternatives.
- Take a consultative sales approach. Gone are the days of hidden fees and confusing jargon. Customers are more informed than ever and they want to feel like dealers are working for them. Help customers understand their options and guide them through the process.
Integrate your CRM
In a world of inventory shortages, you need the capability to follow up appropriately. Because 57% of prospects call to inquire about inventory, you’ll need to be prepared to follow up when possible. A vehicle may not be available today, but might become so tomorrow. Make sure you are getting those details into your CRM with notifications so that you can follow up when a desired vehicle becomes available.
Find an alternative
Just because you don’t have the new inventory doesn’t mean you have nothing to offer. Great sales people are prepared to pivot to an alternative option when customers have their hearts set on something you don’t have. If a prospect wants a new vehicle that isn’t in stock, offer a service package that will get them through until more inventory becomes available. Crush it in the service lane and customers will wait to buy from you.
Winning at Used Car Sales During the Inventory Shortage
For the used car department, there are more possibilities for meeting your customer where they are. Did you know that 76% of used car shoppers purchase something other than what they came prepared to buy?
Customers in the used car market are looking for something that fits their needs. With a consultative approach, you can discover what they need and identify an alternative that fits it from your inventory. Did you like that vehicle because of the seating room or did you like a particular feature? Find out what they want and suggest something that fits.
Know your inventory
This goes for leasing and purchasing. Having a firm grasp on your supply and which payment options are available can help you provide a number of alternatives. For example, you might be able to sell a lease if a prospect is holding out for an exact model, but needs a car immediately. Winning the inventory shortage is all about knowing what you have so you can meet the needs of your customer.
FixedOps during the inventory shortage
Traditionally, nearly 50% of dealer revenue is generated in FixedOps. With no end in sight to the chip shortage, dealers can take advantage of FixedOps revenue streams as a replacement for new car sales.
- Use service as an alternative to immediate purchase. Just because inventory is low doesn’t mean drivers won’t be on the road. Instead of a new purchase, remind customers of the importance of maintaining vehicles for longevity.
- Optimize your phones to capitalize on FixedOps. Make it easy to reach you and schedule service. Customers want their questions answered quickly while taking advantage of a smooth scheduling process.
- Streamline your service lanes. As part of a now culture, customers want a streamlined process for getting their service and long wait times in the service lane and inefficient processes will push them towards the competition.
Other profit strategies during the inventory shortage
Vehicle sales aren’t the only revenue streams available to dealers and the chip shortage may be just the right time to capitalize on those.
- Wholesale sales: Rather than unloading vehicles for breakeven profit, consider slowing the sales process and targeting individual buyers. It may help fill a need and generate additional revenue.
- Fleet vehicles: These work vehicles offer another alternative buying solution when new vehicles are scarce.
Weather the car shortage with proactive strategies
The inventory shortage is just one of many obstacles that the automotive industry has faced over the years. As with other challenges, a dedication to customer service is important and will be the differentiator between you and your competitors. Make sure that your reps, phone systems and service lanes are optimized and you’ll pull ahead of the competition.
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