COVID-19 has changed the automotive retailing business permanently. The consumer is in the driver’s seat. Your prospective customers have developed a certain set of expectations when it comes to how they prefer to be treated in your dealership. Your ability to engage these customers and fully meet their very high expectations can significantly expand your customer base. This can make the difference not only to your success as a business, but also to what a potential buyer will be willing to pay for your store or stores in a buy-sell transaction. In other words, these are all factors that you must consider if you want to increase your multiple.
It is important to remember that, in the eyes of a buyer, you are not just competing with the other dealers in your local area. In addition to your performance in your home area, your operation is being benchmarked against the leaders in the industry. This includes the large dealer groups and the national online auto retailers. How well your dealership or group stacks up to these dominant players, in terms of overall customer satisfaction, can determine how big your payday might be when you decide to sell. When you consult with us, DCG can help you focus on some of the important customer service-related strategies that are used by the highest-performing dealerships.
Your digital dealership is as important as your physical dealership
While there are still many consumers who prefer some of the in-person aspects of buying a car, more and more of the process has permanently moved online. Initial online research is pretty much universal among early-stage buyers, with increasing numbers of them choosing to use the internet for their inventory selection, price negotiation, F&I choices and documentation, and whatever else is possible in their locality.
Is your website structured for this functionality and can your internal processes support the digital services that today’s customers expect? If your answer is something other than yes, you have some serious work to do. Providing a robust omnichannel experience is the price of admission if you want to do serious business with today’s savvy online buyers. They have been buying from Amazon for years and have come to value convenience, choice, and simplicity. Give it to them and you will add extra value to your bottom line.
Upgrade your sales process to 21st Century standards
Of course, the current automotive seller’s market will not be lasting forever – it is a trend that is affected by changing world events. Once the semiconductor shortage and other supply chain issues are resolved in the near future, production will resume and supplies will expand. Prepare for this transition by improving your sales efficiency – and your dealership’s value:
- Improve the quality of your leads and follow them up quickly
- Understand each customer’s needs so you can better meet them
- Respect each customer’s time – don’t waste it
- Make F&I a brief experience that is easy and transparent
- Demonstrate all vehicle technology thoroughly during the delivery process
- Follow up with all prospects who did not buy – they may still be in the market
The results of these sales-related efficiencies will lead to increased customer satisfaction, higher CSI scores, and a higher value in the eyes of a buyer.
Take your service department to a higher level of performance
Once that the sale has been made and the customer takes delivery, your service department becomes the major point of contact for customers. A positive service relationship can pay many different kinds of dividends, including years of service and parts sales and additional vehicle sales throughout the years. This is also something that has great value to a potential buyer, increasing the value of your rooftop.
Here are some customer-friendly strategies for increasing your service department’s impact on your dealership’s overall performance:
- Set up online scheduling so customers can easily do it themselves
- Greet every service customer as soon as they pull in
- Educate customers about why their vehicles need servicing
- Do a walk-around with the customer to identify other items that may need attention
- Stay in touch with customers via text messaging
- Fix every problem the first time
- Review the work that was done when the vehicle is returned to the customer
- Provide online invoicing and payment options to speed the process along
- Smile and thank every service customer
Make the most of your CRM system
While every dealership may have a CRM system, most stores don’t come close to exploiting all of the time- and energy-saving capabilities that these automated business systems offer. You can use your CRM system to facilitate sales and service processes, as well as manage email marketing, track staff payroll and time records, and monitor employee time off.
Automating your business processes helps you to get more done in less time. Doing this will turbocharge your dealership’s efficiency, which means happier customers, increased profitability, and a higher dealership valuation.
Show the world that you are ready for the transition to electric vehicles
Electric vehicles (EVs) are coming. Manufacturers are pouring billions of dollars into the development of these “new energy” vehicles that will eventually replace the internal combustion engine (ICE) vehicles that we have been driving for over a century.
While no one can predict how long this transition to EV dominance will take, it is definitely underway. The dealerships that take it seriously, understand all of the issues, and engage with customers in a positive way will be the winners, both financially and in the view of potential buyers. Being prepared for this great change can position your store as your area’s EV expert, giving you a larger slice of the EV pie and a higher price when you sell.
Hire and train a staff that loves to please customers
The value of your staff is one of the key factors to be considered when a potential buyer goes through the operational details of your dealership to establish an appropriate valuation for the purchase. Buyers are looking for a team that is highly skilled and fully trained, focused on satisfying the customer, in total charge of a finely-tuned operation, and ready to hit the ground running when the new owner takes over.
The benefits of a top-notch staff go beyond the purely financial. Team members who are fully engaged can also become your dealership’s brand evangelists, promoting your principles because they believe in them and live them daily. It’s the ultimate 5-star review!
DCG is focused on maximizing your dealership’s value
DCG will help you to get the maximum value from your dealership when you decide to sell it. DCG is one of the leading and fastest-growing, automotive M&A firms in the country. We pride ourselves on our extensive network of industry connections — with automotive manufacturers, financial lenders, dealership buyers and sellers, and more — that help us create a qualified, competitive environment on both sides of the sale.
Contact DCG to speak directly with one of our Automotive M&A specialists. Learn how our expertise can help you get the most out of your next dealership sale or purchase.