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Question: How much money is sitting in your Dealership Management System (DMS) right now?

 

Well, let’s break it down. The average-sized dealership has tens of thousands of customer names in its DMS. Since each name represents a customer—either sales or service—whose ownership of their current vehicle will ultimately come to an end, they make great prospects for future sales.

 

But how do you know when their ownership will come to an end? The answer is right there in your DMS.

 

Statistically speaking, an average dealership has around 10% of its customer base in an equity position at any given time. It’s fairly simple to find those names. You can produce a short list with a routine query. Still, even the “short” list is probably in the high triple-digit range. So what you really need to do is cut this list of names down to the ready-to-buy customers. Let’s walk through how to do that.

 

You need to know where these customers are in the owner lifecycle, but also where they are in terms of equity. The names you really want are those people who have enough equity in their current vehicle to trade up to a newer vehicle with a favorable payment option. That data is in your DMS.

 

To cash-in on this data you need a system that pinpoints your “best of the best” prospects and makes sure they’re targeted with the best offer at the best time. Here’s a step-by-step process of how to do that:

 

  1. Do a search in your DMS for customers who are two-thirds into their current term of ownership (i.e. for a 60-month term at 40 months out, 72-month term at 48 months out, and so on).
  2. You’ll most likely end up with a large number of names; divide them so you can distribute customers between sales team members. Develop a lead sheet for each name with the customer’s information, payoff amounts, make/model—all the data a sales rep would find helpful in making a contact.
  3. Here’s where the real work starts. Have salespeople generate a personalized trade-in quote for each prospect on their list. A compelling quote would include:
  • The customer's current payments
  • Projected payments for a new vehicle (based on a good match in your current inventory)
  • VIN, mileage, trim level, etc., for both the current and new vehicle
  • Black Book® valuation of their current vehicle and what your dealership is willing to pay for it
  • Projected cost of ownership for both vehicles over the next five years
  • Loan and/or lease terms for the new vehicle

     

4.Creating these quotes is going to give you a feel for which prospects are not only at a good time to trade, but in a good equity position as well. These are your Prime Prospects. Have your team take their respective lists and create a personalized email for each name, attaching their customized quote.

5. Follow up all emails with a personalized phone call.

6. Continue following up with existing leads at least once a month; mine for new leads each month.

 

A lot of work? Absolutely. But it’s a great exercise to discover just how much cash you can leverage out of your DMS. The tricky part is sticking with the program, but here’s the good news: there’s software specifically designed to automatically do steps 1 – 4 above, based on parameters you specify. That frees up your sales team for the really important part: talking with the (best) prospects.

 

As an ongoing project, mining your DMS for equity opportunities can result in a substantial volume of additional sales every month. So don't let a huge pile of potential cash just sit there. Start digging into your DMS today.

Views: 60

Tags: AutoLoop, customer, direct, email, engagement, mail, marketing, retention, service

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