In todays challenging market, it is more important than ever to retain customers. However, for the majority of car dealers, prospecting is not a task that is undertaken with excitement or enthusiasm rather the opposite.
The flaws in the traditional approach are clear when looked at from the customers perspective:
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The timed approach: Trying our luck at peak settlement months through the term and / or predefined contract touch points is not very scientific. Effectively, the sales team has to contact customers out of the blue with nothing more to offer them than an invitation to the showroom to see if theres anything we can do for them on a new model.
Contacting customers because weve been notified by the financier theyve requested a settlement directly or via a different dealer. We may call this a proactive approach but customers may feel defensive or even hostile to this sort of targeting.
Finally, the hot prospects list: customers within six months of the end of their contract. Typically, only a third of customers keep their car into the final third of the original finance contract period. Those that do keep their vehicles do so either because they want to keep the car or because they feel that no other viable option is available. Therefore telephoning the customer anywhere inside the last handful of months with supposed good news of an offer on a new car might sound like a great opportunity for a salesperson. However, from the customers perspective, most often the reverse is true.
Timed renewal activity is simply not enough in todays sophisticated consumer market. Contacting a customer because they have 90, 120 or 180 days to run on their contract is unlikely to persuade them to re-purchase. The clever use of technology to help you identify the best moment for a customer to re-purchase will increase your sales and help to reduce ownership cycles.
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By GlobalDataAt the same time, your customers loyalty to your brand, dealership and financier will increase.
Within reason, the earlier a point of renewal is identified, the higher the likelihood is of the customer re-purchasing with the dealer. They are more receptive to a call from their supplying dealer at this stage.
In part, this is because there is a considerable period of time before the end of the contract is in sight. They are not thinking about their finance deal coming to an end yet, or what car they would like next.
The result is that the customer considers the new car transaction to be a continuation of their existing outgoings, as opposed to a completely new deal.
To help with this, Chrysalis-Solmotive developed Chrysalis, a web-based tool that enables manufacturers, their financiers and dealer staff with information about existing customers who are in a viable position to repurchase.
It takes selected data from the dealer and / or financier and uses a set of unique algorithms to identify prospects at the earliest point in their ownership cycle to be contacted for renewal of finance or cash deals.
A dealer logging on to their secure Chrysalis system will have access to their entire database, segmented and categorised into a number of logical opportunities to do business. Additionally, Chrysalis also provides the user with a suite of smart calculation tools that allows drill down, interrogation and efficient identification of customer centric renewal opportunities.
By using management software such as Chrysalis, a sales team will have a really good reason to call an existing customer.
They will already be equipped with the knowledge that that customer can walk in and upgrade to another vehicle without actually having to change their monthly fee or pay an additional deposit.
Its common for a customer to say they will not come to the showroom unless the dealer can show them the figures from the outset.
The beauty of this method is that the customer offer is based around the figures they already have and are familiar with.
The sales person can readily answer questions a customer is most likely to ask, which otherwise may prove to be a barrier to a new deal.
Top performing retailers who use the software enjoy in excess of 20 times the return on investment (ROI) in one year.
The average across the UK is currently tracking a 15x ROI. At the same time, many users of the software have experienced significant, sustained increase in their in-dealer renewal and retention rates versus their previous performance operating without Chrysalis.
The key to customer retention and renewal is for dealers, financiers and manufacturers to take a proactive approach to renewal, using the right tools to identify customers that have the ability in principle to repurchase.
Calculations based on their financial profile enable the dealer to build a compelling new offer for them based on a repeat of the terms of their existing deal in a vehicle of the same type or value.
This provides a win-win-win situation the customer wins because they can upgrade to a new model and the dealer, manufacturer and financier win because they can sell more cars and finance, more often.
Paul Bennet is sales director at Chrysalis-Solmotive Ltd
