4 Ways Dealerships, Automotive Shops Should Prep for a Re-Open
Enhancing Communications, Connecting with Routine Services Will Be Key
While uncertainty lingers about when and how restrictions surrounding the coronavirus (COVID-19) pandemic will begin to ease, car dealerships and automotive shops should already be brainstorming ways to bring in customers.
In California, as Gov. Gavin Newsom and local governments begin to map out how an eventual reopen will look, discussions are centering on opening retail as soon as May and other businesses in June and into the fall, according to the Los Angeles Times.
For the automotive industry, one of the hardest hit industries nationwide, that timeline means work should begin now contacting customers, setting up appointments, and brainstorming ways to attempt recovering from a dismal first quarter.
Here are four areas that dealerships and automotive shops should be focusing on in the weeks leading up to a re-open and moving forward afterward:
1. Utilize Business Development Departments
SCL Customer Solutions Specialist Don Parker, who has spent the past 40 years in various roles in the automotive industry, believes any traction dealerships and shops experience will demand communicating to current and prospective customers what they need.
“You have to find ways to get people in the door,” Parker said. “That doesn’t have to mean services that break the bank. We’re talking timely and relevant services that you can do to help customers whose cars have been sitting for the past two months or more.”
That could mean a complimentary tire pressure and battery check, and then scheduling future service appointments once customers are at the shop, he said.
“Right now, you need to work on putting your customers at ease, showing them you have a service they need,” Parker said. “All these vehicles that have been sitting, they’ve been losing tire pressure and battery voltage. You can offer a service now to check those things, and when we’re on the other side of it those customers will know you helped them avoid a dead battery or another headache at a time when they’re trying to get back to normal.”
Filling service lanes will also, hopefully, create additional opportunities to tactfully and responsibly plant seeds on upgrading vehicles for the same payment or lower.
“Sales may not look the same for awhile,” Parker said. “These dealerships that sell 30-100 cars per month in the service drive, that could be something to focus on.”
3. Keep Sales Expectations Realistic, Focus on Service
When sales departments do come back, it’s essential that dealerships don’t expect too much, too fast.
According to Forbes, although a January forecast for new car sales from Edmunds.com predicted this year would match the record 17.1 million new vehicles sold in the United States in 2019, that is no longer the case. Experts now predict a prolonged slow down through the end of the year resulting in an estimated 15% year-over-year sales decline in 2020. According to an April 2020 survey by Automotive News, about two-thirds of auto dealers estimate that number to be 20%.
Despite a potential frenzy to make up first-quarter profits, Parker said, dealerships should move slowly and think out of the box, possibly by starting contactless pick-ups, appointment-only contact with sales representatives, and so on.
“Once they decide ‘OK, we’re going to start opening the economy and car dealerships are going to be allowed to do business again,’ I think it’s important that car dealerships recognize the environment they are in,” Parker said. “That could mean wearing masks, maintaining social distancing, allowing customers to drive cars without someone with them, maybe even take the cars home and bring them back. The businesses who think outside the box are the ones who are going to be most successful. This is not going to be a race.”
The Automobile News survey also showed that dealership owners now believe only about 21% of profitable growth will come from new and used vehicle sales following the coronavirus.
3. Enhance Online Shopping Experiences
In the second week of April, for the first time since the coronavirus hit the United States, the number of visitors to Cars.com increased by over 10% and leads to national dealerships have grown 15%.
That not only means consumers are begin to move toward car buying behavior again; it also means they are turning to the Internet prior to visiting a dealership, which Parker says is nothing new.
“People already do their shopping online, that won’t change,” Parker said. “What may need to change is the attention that dealerships put on that mode of shopping. If people can find what they need and get approved for an interest rate beforehand, reducing the time they spend at a dealership, that could make a direct impact to sales as we begin to ease back into our normal.”
Especially with uncertainty surrounding when businesses will reopen or when consumers will begin buying cars again, providing the option to shop from home is critical.
4. Protect Employees and Customers First
The most paramount consideration once sales departments re-open and service lanes begin to pick up should be the safety of employees and customers.
“You have to be able to put your customers at ease, and that means instituting ways to protect your people and protect them,” Parker said. “Social distancing procedures, wiping off cars after passenger drop offs and then again prior to pickups, seeing customers by appointment when it comes to car sales, all of that will need to be figured in.”
Regardless of what approaches or new strategies dealerships and shops take as restrictions lift, Parker said, one thing is for sure: “you’re going to see a lot of cars out there that need to be sold. We’re hearing offers like 0% interest for 84 months, three months with no payment. The dealerships that accept this environment is not going to just go away, the ones who take measures to adapt, those are the ones who will come out of this successful.”
Being creative, he said, is also vital. Considering measures like priority hours or promotions for first responders and healthcare workers could go a long way in not only instilling confidence but also connecting with the community.
Contact an SCL Consultant today
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