In today’s auto retail space, your prospects and most loyal customers have more options than ever. As marketplace loyalty wanes, dealerships must become more sophisticated and use big data not only to anticipate market trends, but also to shape their processes to stay ahead of them.
As the automotive retail sales milestone that is Memorial Day weekend lures buyers to the lots with promises of low- or no- interest loans, longer loan terms, tempting rebates and MSRP discounts, successful – and profitable – dealerships look to benchmarking data to effectively manage increased demand and to focus their teams’ efforts, close more sales and maximize profits.
DealerSocket, the only automotive technology platform that guides auto dealers to improved profitability across all areas of their business, recently released benchmarking data pulled from 950 dealerships’ 2014 Memorial Day weekend sales drive. The data informs dealerships about what they might encounter this year and how to succeed in the areas of lead generation and appointment management, used-car sales and product promotion – new and used, among other insights.
Optimize Leads Converted with Phone Follow-Up and Scheduling Tools
Based on a comparison of the average total profit earned for all leads generated during last year’s Memorial Day sales drive, floor leads were most profitable, at $1,810 on average, compared to $1,622 for phone and $1,401 for Internet.
Still, even with increased foot traffic and a strong return on the floor during the holiday weekend, the most successful dealerships invested the time to pick up the phone to ask prospects for appointments. Of the leads actively pursued with phone follow-up, DealerSocket found that 89 percent of leads sourced via phone resulted in a scheduled appointment, with 36 percent of all new leads sourced from the Internet resulting in a scheduled appointment after a follow-up phone call.
And dealerships that use technology to formalize and optimize the appointment confirmation process perform even better. Dealerships report that using appointment confirmation technology typically delivers 150 percent more appointments a month. Apply that benefit to a compressed sales timeframe like Memorial Day weekend, and it follows that dealerships that have this technology in place will outperform the dealerships that don’t.
Meet Used-Car Customer Expectations Through Data Mining and Other Prep
While the percentages for appointment confirmations, show rates and sell rates were nearly identical for used and new vehicles, according to DealerSocket data, more shoppers made test-drive appointments for used cars (35 percent).
DealerSocket data also shows that the average days to sold for used cars during last year’s Memorial Day weekend sales drive was 16 days versus 25 days for new cars. To ensure success with the used-car customer, keep ads and other promotional materials up to date and actively use your data-mining platform in the coming days to match prospects with your used-car inventory.
The data-mining platform is also a great tool for finding monthly payments that work best for your customer. The good news is that even when working within used car customer budget parameters, used cars proved to be a profitable venture for dealerships in 2014. The average total profit from used vehicles during last year’s Memorial Day weekend sales drive was $2,152 compared to $1,360 for new cars.
Therefore, make sure your used-car lot is adequately staffed to handle additional demand and provide a great experience the moment customers set foot on the lot.
Display and Promote Products Most Likely to Close to Drive More Profits
Finally, some of the highest close rates helping to drive those profits to the bottom line for Memorial Day 2014 were on economy cars. Leaders included Scion (66 percent), Fiat (56 percent), Mini (53 percent) and Hyundai (50 percent).
If you’ve got these brands, be sure to prominently display them (and other economy offerings) on the lot and in your communications with customers.
For more actionable insights to inform how to best succeed this weekend that are specific to your brands and/or local market, contact your data partner representative.
DealerSocket is a leading automotive technology platform that helps dealerships in the U.S., Canada and Australia improve profitability through a fully integrated suite of marketing, sales, service, customer experience DMS and data mining solutions. Headquartered in San Clemente, Calif., DealerSocket employs more than 650 people and serves more than 6,500 dealerships in the U.S., Canada and Australia. DealerSocket’s advanced technology provides benchmarking data that paces the industry, and its insightful experts identify trends and develop strategic roadmaps that help dealers optimize processes and operate more profitably. For more information, visit DealerSocket.com or call 866.813.1429.