What Data Improves Your Dealership's Inventory Turnover?
Gone are the days where a catchy radio or television commercial is enough to get buyers to walk into your dealership ready to purchase a vehicle. Car buyers today distrust traditional marketing channels and prefer to be more in control of the car buying process. How can automobile marketers implement best practices for improving performance, managing fast inventory turnover, and building a network of satisfied customers in today’s digital age?
When shopping for a car, buyers like to do independent research rather than rely solely on information dealerships provide. And when you’re trying to turnover inventory quickly, these factors can seem to work against one another.
A study from McKinsey on the consumer decision journey found that two-thirds of the active research period involves consumer-driven marketing activities, such as Internet reviews and word-of-mouth recommendations from friends and family, as well as in-store interactions and past experiences.
They like to curate content, ignoring those channels that do not resonate with them, in order to help their decision-making process. Because it is so easy to access prices, specifications, performance, and other factors, consumers have greater bargaining power.
If car buyers are already so informed, what information can dealerships arm themselves with in order to counter shoppers who become part-time product experts?
Consumers now spend 12 hours online doing comparison shopping. And they’re not sitting at a desktop computer when they conduct research.
Dealerships that utilize a platform to directly connect consumers with your VDPs will find themselves the most successful in uniting with exactly what the customer wants and increasing inventory turnover. VDPs accomplish this because these pages offer easy navigation, contact information, high-quality pictures, dynamic design, and information that exactly matches the query and intent of the consumer.
88% of them trust the online reviews as much as personal recommendations.
86% of customers will hesitate to purchase from a business that has negative reviews.
Beyond practicing impeccable customer service that would reduce obvious reasons for a negative online presence, ensure you are doing what you can to manage your online reputation. If someone left a bad review, leave a comment if you can that you will make an effort to rectify the situation, then take it to the next level in a private message if possible.
While you can’t delete negative reviews on most social media platforms, you can show those 90% of customers reading your reviews before they even step foot on your lot that you are a dealership that cares about the customer experience.
Selling used cars is often more profitable than selling new cars. However, used cars that aren’t selling create frozen capital. To avoid losing money, you should have a solid inventory management platform in place that helps you know how to price used cars, appraise trade-ins, and base inventory management decisions on data.
The Leedom and Associates industry benchmark for inventory aging is to not have more than three vehicles on the lot more than 61 days.
The average cost of used vehicles inventoried at franchised automobile dealerships today is nearly $14,000.
61 percent of a dealer's used car inventory comes from trade-ins.
71 percent of car buyers surveyed reported being likely to consider a late-model used car as an alternative to a new car.
If you’re not exceeding—or at least meeting—these industry data standards, then there is a need for you to revise your marketing efforts. But without the ability to even gather and analyze consumer data, then you need to discover software solutions that can help.
And even if your dealership is Internet-savvy with a solid working knowledge of how to attract and keep today’s car buyer, there is always room for improvement when implementing an inventory turnover strategy.
What are you currently doing that’s working to maximize your dealership’s inventory turnover, and what can you do to improve?