How to Prepare for a Sales Slowdown
Vehicle sales are expected to decelerate from the breakneck speed of the past two years, according to some industry analysts. This makes now a good time to strategize about how your dealership can maintain (or exceed) revenue and profit levels in 2018 and beyond even if vehicle sales slow.
One of the keys is to focus more sharply on fixed operations (parts, service, paint and body repair) and F&I to drive revenue and profits. In fact, the vehicle sale should be viewed as just the first step in tapping your customers’ lifetime value.
Service: Get them in the door
Fixed operations account for a large share of profits at many dealerships, even when vehicle sales are booming. Your initial goal should be to encourage car buyers to visit your dealership for their very first service appointment.
To do this, walk buyers over to your service department and introduce them to your service manager. Ask them if they’d like to schedule their first appointment now, and consider giving them a complimentary first oil change.
Next, make sure you provide outstanding service and value to customers when they come in for that appointment. This will help position your dealership as their go-to option for vehicle service — and not give them any reason to try out an independent repair shop.
Also make sure your customer relationship management system is capable of initiating regular communication with buyers after the sale via email, text and postal mail. This way, you can let customers know when their vehicles are due for regularly scheduled maintenance and perhaps offer an incentive for visiting your dealership for service. Also, enable customers to make service appointments via your website.
F&I: Sell profitable products
F&I is a source of tremendous untapped revenue and profit for many dealerships. To maximize the financial contributions of this department, start by identifying the highest margin F&I products your customers are most likely to buy. Vehicle financing? Extended warranties? Rust protection?
Also focus on educating your customers about the benefits of F&I products, instead of using hard sales tactics to try to pressure them into buying. Devise and implement a standard F&I selling process and use it with each vehicle sold. And make sure your employees thoroughly understand the nuances of all your F&I products so they can clearly explain them to customers and answer common questions.
Get ready now for a possible slowdown in vehicle sales: Strategize about how you can boost sales from fixed operations and F&I to help make up potential lost revenue and profits. You’ll be ahead of the game.