Inventory Upheaval: Opportunities to Focus and Control
Maximizing Opportunities During Inventory Upheaval
With no end in sight for inventory issues and, likely, uncertainty for several months, it may seem dealers are in a helpless position. This is the new norm with fluctuating inventory and change is here to stay for the foreseeable future.
While this is taking time to straighten out new and used car, parts and accessories inventories, significant opportunity exists in five key areas. Stay focused on what can be controlled:
- Acquisition: Get creative where to find and buy used cars. Pay a bounty to those who can bring in a used car from private seller sources. Parking lots, social media, Facebook Marketplace, CraigsList, and others, incentive all staff to bring opportunities. Looking at average cost of sale, do not get hung up on the value of a used car if you know you are able to turn it around quickly.
- Reconditioning: Ensure your dealership has good processes to be efficient in car turnaround. Taking five to seven day is industry normal but can you get it to three days and achieve rock star status? Source aftermarket parts and be sure you have those options open. Is the car sitting in the bay ready to be worked on to start the next business day or is it still out on a lot? Expedite approvals. Give your service department a dollar threshold so that smaller (and obvious) repairs are auto approved. Ensure detailing and quality of pictures immediately after reconditioning.
- Pricing: This is a tougher one to gage and many dealers have different approaches. Keep the velocity of your industry turns as high as possible. Price competitively to achieve this. It also helps keep more cars coming in from trade in.
- Marketing: If you aren’t invested in digital marketing, now is the time. Due to inventory scarcities, more than ever, customers are online looking for vehicles. Retargeting, for example, is a powerful way to remain visible while customers keep searching. And, are you maximizing marketing your service and body shop capabilities?
- Sales Process: Stay consistent and be proactive. Get management staff interacting with customers earlier to maximize every opportunity. With less cars, this matters. Keep the dialogue going while customers are on the floor. Follow up and be diligent with what a customer wants and try to make that work as much as possible. With shortages and inventory issues, customers are prone to be ready to buy.
