8:00 am, September 7, 2022
Running a car dealership is a constant juggling act of sourcing stock, selling cars and keeping customers happy – and it’s not always easy to get everything right.
But what are the most common mistakes car dealers make – and importantly how can they fix them?
Sometimes it takes an outsider to look into your business and point out a few things you could improve to drastically increase performance, and that’s what Ali May-Kahlil specialises in.
The Autoguard Group chief commercial officer has chatted to Car Dealer – in a video you can watch above – about his ideas for tweaks dealers can make to their business to make sure it’s firing on all cylinders.
Play to the strengths of having a physical dealership
It’s not always about going toe to toe on price with the disruptors. Dealers often forget what an impact a physical showroom can have and it’s something the likes of Cinch don’t have.
‘The experience of buying a car is exactly that,’ said May-Khalil. ‘That’s the competitive advantage that I think a lot of dealers miss. It’s about creating an experience that the online guys can’t do.’
Understand the power of your social media
Few dealers realise what a cheap and effective way of promoting their business this can be.
‘There are so many things they should be using it for: recruitment, buying stock, dealing with customer issues, showing the human side to your business.
‘And also, you’ve got that user-generated content. If you create a great customer experience, the customer then tells everybody about how fun it was, how great it was to buy a car from you, and of course they’re posting that to all their friends and family.
‘So however much it costs to use classified advertising, this is a fraction of the cost if any if you embrace it.’
Make sure you’ve got a proper sales process
This is key if car dealers want to maximise their returns, but May-Khalil is often surprised at just how few actually have one.
‘Dealers definitely have a general problem with the sales process. Selling the car seems to be the be-all and end-all.’
But it’s vital to have a process in place to include all value-added products.
He told how asking every customer if they wanted to go large with their meal was a process coached into staff at fast-food joints – and the profit from those eventually eclipsed that of the meal profit itself
‘What I’m trying to say to dealers is that you’ve got to think about all your available margins and weave that into a process.’
Dealers should know when to get involved
Although a lot of the car-buying transaction can be carried out online, dealers shouldn’t underestimate the power of talking to a customer themselves.
‘What we’ve seen is that customers want human interaction. That’s the competitive advantage of an independent dealer, because they can be themselves, they can communicate and make themselves unique.
‘The customer will always do a big proportion of their journey digitally.
‘Most dealers don’t understand how and where to impose themselves on that digital journey. Get that right and your conversion rates rocket.’
Understand how customers use your website
It’s not simply about knowing how and when people arrive at your website, it’s just as important to know why they left.
What most dealers don’t understand is where the customer leaves their website, having initially gone there to look at a car, for example, or check out servicing, said May-Khalil.
But how many customers left that page, how long did they spend there and why did they leave it?
Remember that selling a car is just the start
Selling a car is where the relationship begins, not ends. That’s something that dealers often get the wrong way round – and to their detriment.
‘One of the many things we do with a dealer is look at what their attention programme is like.
‘One of the simplest things is you provide a warranty – three months, six months, 12 months, whatever it is. After that point, do you get in touch with the customer?’ said May-Khalil.
‘It’s a great opportunity to build that relationship, and you can also sell them something that has profit in it that may also help to retain them. That’s not something that happens all that often.’
Offer a service plan
Not immediately obvious, but in fact these are another great way to get people coming back to your dealership, improving again on that all-important customer attention.
‘Most dealers don’t realise that there’s profit in service plans. They don’t really think about the future,’ said May-Khalil, adding that it tended to be more about about profit right here, right now. ‘A service plan won’t do that – it’s the long game.’
Keep hold of existing customers
This is far more cost-effective than trying to find new ones, says May-Khalil.
‘You can spend a fortune on advertising. Because there’s an instant hit with that, that tends to be the go-to, but although [a dealer] could say how much they’ve spent on advertising that month, most wouldn’t be able to tell you about the plans they have for those customers.’
Autoguard Group offers extended warranties plus many other value-added services.
It comprises Autoguard Warranties, consultancy firm Sentience Automotive Solutions, consumer-facing brand Best4, FleetBand for commercial vehicles and Warranty Administration Services, which helps dealers white-label the group’s products.
The group now caters for some 1,500 active dealers on a weekly basis, ranging from multi-franchise dealerships to independent used car dealers.
You can watch our video interview with May-Khalil at the top of this post as part of a longer feature about Autoguard Group, which is perfectly positioned to help dealers maximise their profit.
To find out more, go to autoguardgroup.co.uk.
