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17 tips from experts to help car dealers make the most of third lockdown and ensure profits keep rolling in

Time 3 months ago

With car dealers facing a locked down March and showrooms closed until April, searching for opportunities and maximising them right now are paramount.

To help, Car Dealer has collated a number of top tips from a host of car industry suppliers on what they think dealers can do to make the most of the third lockdown.

We asked suppliers where they think car dealers should be focussing their time and effort on right now.

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Here’s what they had to say.

1. Be prepared for weekend shoppers

Shaun Harris, Commercial Director, Codeweavers

Lockdown shopping is very much a digital experience for consumers and one thing to be aware of is the higher activity at weekends, be well prepared to take advantage of this and make sure you are digitally welcoming to the consumer and engaging out of usual physical business hours.

Make sure click and collect or click and deliver are not only well sign-posted on your website and social media, but build consumer confidence through the messaging. 

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2. Keep communication channels open

Karen Hilton, chief commercial officer, heycar

Keeping all communication channels open is a vital element in successfully navigating the challenges of lockdown. Continue to engage with customers, while showrooms are shut. This could be through setting up a waiting list for customers, enabling them to register for servicing or even car sales, so that activity can resume as soon as dealerships are able to reopen.

Why not issue a regular email newsletter to keep customers informed on changes to opening hours, latest offers and the steps being taken to ensure the safety of both staff and customers?

3. Make distance selling work

Nona Bowkis, Solicitor, Lawgistics 

Make Distance Selling work for you by putting the right paperwork in place to protect yourselves. Without the legally required terms and conditions, you could leave yourselves open to a customer getting a full refund a year after the sale.

Simply issue terms with the order and this will give you control over who returns the vehicle and how much you can charge per mile if they go over any predefined test drive mileage limit. It will also allow you to make deductions based on the condition of the returned vehicle and pass on liability for any fines or penalties.

4. Embrace digital changes

Seán Kemple, managing director, Close Brothers Motor Finance

Dealers who haven’t embraced the digital boom will fall behind during this lockdown. Dealers need to offer an accessible and up-to-date digital forecourt where drivers can access the showroom from the comfort of their homes.

Social distancing is expected to be around for months to come, so having efficient buying and selling features like home delivery, click and collect services, or live video viewings, will demonstrate that safety is being prioritised. Dealers can also get ahead by utilising software like finance calculators or remote quote and apply functionalities.

5. Build solid foundations 

Liam Quegan, managing director, NextGear Capital

Lockdown has taught us the importance of building solid foundations for your business by getting on top of costs and assessing operations to look for improvements. I’d recommend that dealers review their funding sources and work out if their current source is really what’s best for them.

There are a number of options out there and often the cheapest option isn’t the best value in the long run. Ultimately, it’s about ensuring you have cash reserves to weather uncertain times, and where appropriate, invest in new facilities such as e-commerce or imaging to set yourself up for success in the future.

6. Add near-prime PCP to your finance options

Paul Burgess, CEO, Startline Motor Finance

One of the key developments we saw in 2020 was other lenders tightening their underwriting rules in response to the pandemic and more potential car buyers being referred to near-prime lenders as a result. So far, this has largely affected hire purchase, but is now starting to become apparent in the PCP sector.

There has been a definite acceleration in our near-prime product, with an increase in uptake over the last few months. This is something we are especially seeing at major dealer groups where PCP is generally promoted more effectively as a means of promoting affordability. 

7. Buy interesting stock now

James Bush, sales director, Motorway

Our best advice would be to buy interesting stock, with as much spec as possible at the right price. Dealers are reporting to us that they are operating at 50-60 per cent of usual volumes, but there is still business to be done and great margins to be had. The right stock at the right price will always sell well and this third lockdown is no different.

Stocking up now is also a wise move as the lifting of lockdown soon should see a lot of pent up demand from sellers that are not quite ready yet for the pure-online car buying experience. We would expect dealerships to see a great wave of customers coming through the doors eager to see all the stock available to buy.

8. Make warranties part of your online offering

James Tew, CEO, iVendi

Extended warranties, paint protection, alloy wheel insurance and other additional products and services sold at the time of vehicle purchase are an essential element of dealer profitability. They should be part of the online journey that you create for the customer and importantly, their benefits should be emphasised.

During lockdown, we have found that it is highly effective to make them part of a digital deal, including motor finance, that is presented to the customer as a complete proposition. Although the data we have is limited to a handful of dealers so far, the most successful saw overall warranty sales across the dealership grow by 84 per cent while the second-placed recorded a 72 per cent rise. These are substantial increases that should not be ignored.

9. Learn to present your proposition digitally

Kellie Grocott, RAC director of sales at Assurant (RAC warranties)

Under lockdown conditions, dealers need to ensure that they are using their online presence to display all of the advantages of buying from them as clearly as possible. One way in which we’ve been assisting our dealers is through a new digital pack that promotes ‘click and collect’ and ‘click and deliver’ messages.

10. Use your time wisely

Le Etta Pearce, chief executive officer, Dealer Auction

Lockdown has taught us that we don’t always need to do things the same way we always have done. In the face of adversity, many dealers have discovered for the first time how sourcing stock online can work for their business and have reaped the benefits of embracing new technology.

Digital remarketing has enabled dealers to keep buying and disposing of stock throughout lockdown while physical auctions remained closed, and it’s here to stay. More channels, greater stock choice and better time saving are just a few of the reasons why. 

11. Use technology proactively 

Stephen Johnston, sales manager, Ripley Chat 

Keep the lines of communication open – marketplace, website, phone, email, social media and online chat all connect you with your customers virtually. Without walk-in customers, now more than ever these are key.

However, don’t have these facilities in place without using them effectively. Chase every email, follow up phone calls – leads from online chats could very well be the difference between you and your competitor. Not everything will lead to a sale, but be the kind of business that uses technology proactively.

‘Be the kind of business that uses technology proactively.’

12. Make sure you follow leads up

Wendy Harris, CarGurus SVP Sales, UK Managing Director

With shutdowns due to the pandemic, 63 per cent of buyers have told us they are now open to buying their next car online. Before the pandemic, this figure stood at 42 per cent – showing a clear change in buyer behaviour. For our dealer partners, it has never been more important to have the best ad imagery, vehicle descriptions and a strong lead follow up strategy for all online ads.

13. Get to know your customers

Simona Staykova, Marketer, First Response Finance

Put a plan in place to understand your customer journey and maximise the revenue by interacting with them at different stages of the buying process. Re-assess all the marketing platforms that your customers use and establish which one has the best ROI.

Once you do that, you can start doing more organic or paid advertisement. And pick up some new skills –there are a wealth of courses out there for those looking to increase their digital marketing skills, make use of them so you can build or improve your social media presence.

14. Let customers appraise their own cars

Paul Humphreys, managing director, eVA Valuations & Appraisals

For me, the two key principles in the era of digital retail are trust and transparency. Consumers need to trust that the information they are getting is correct and see a transparent process to manage any issues which may arise.

Apply this to something like the part-ex process – a historically complex scenario – and things become much easier when you empower the consumer to appraise their own vehicle, using smart technology and data-driven insights to arrive at an accurate valuation for their car. The dealer is free to focus on the new car journey, while the consumer avoids a stress point.

15. Promote contact free options

Nick Brunton, National Sales Manager, carwow

Groups that have adapted existing sales teams to create centralised brand specialists have excelled during lockdowns. By developing a core team responsible for managing all digital leads channelled their way, they are maximising sales opportunities. With one in five people now preferring to buy from the security of their home, promoting contact free options, including Click and Collect and Free Delivery, are vital for dealers. 

16. Maximise all sales opportunities 

Craig Grant, commercial director, WMS Group

Car dealers need to look at ways to maximise all sales opportunities post-lockdown. They also need to respond to changing consumer needs – our own research shows almost a fifth (18 per cent) recently purchased a car online without seeing it in person.

This shift towards online purchasing highlights the need to educate sales teams and customers on products they may not have considered before. Ultimately, a more strategic approach like this will be key to boosting revenue and profits.

17. Make sure you’re covered

Pauline Brookes, head of corporate motor trade, Bollington

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Have you made sure you are insured on the correct basis for your business during lockdown? When switching to click and collect services, are you covered for any additional risks involved? Do you have unoccupied premises that pose a security risk?

When it comes to managing risks, keeping up with government guidance on Covid-19 is crucial. It might not seem exciting, but regularly reviewing your insurance and risk management arrangements can effectively protect your business, employees, and members of the public. 

If you’d like to be involved in features like this contact Car Dealer via the contact us panel on our About Us page.

James Baggott's avatar

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.

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