With the Bank of England forecasting a strong economic recovery after what will be a difficult Q1, dealers can help their customers and themselves by reconsidering what changes they might make to their business models now ready for the ‘new normal’.
The importance of online and the appeal of used cars are two factors I expect to continue in the year ahead. The reasons for both, provide opportunities and changes that dealers can investigate.
Used car sales have always performed well in times of economic stress. The lower purchase cost and ensuing lower monthly finance costs are aligned to people who are financially anxious.
The web will continue to provide a safe, socially distanced way for people to find potential cars and dealers.
It is also convenient and allows the customer to be in control, avoiding any apprehension about the showroom experience they may perceive exists. The consistent theme here is that we can expect consumer angst to be an ongoing legacy from the pandemic.
Lockdown measures have impacted many peoples’ confidence and finances. Anything a dealer can do to lighten the anxiety load can help. Protection product and services have a role to play and better/longer warranties, SMART and GAP/RTI insurance, all provide a strong message of certainty.
While the products and pricing are a dealer’s decision, my instinct and experience is that dealers offering high quality protection products at a fair price in an open and transparent way can win sales and customer appreciation. The opportunity lies in the ability to increase penetration and ‘products per customer’ by enhancing customer awareness. Additionally, dealers should consider the lifetime value of the customer with regard to insurance and protection products – rather than only attempting to sell products at point of sale (online or in the showroom) it would make sense to create multiple touchpoints through the lifetime of that customer to consider selling additional protection products.
Not everyone may choose to buy a protection service, but there is everything to gain from ensuring people are aware of the options and product details, and the place to start the process is online.
To provide some additional context to this call to action; in 2019, an assessment of car buying search inquiries by UK residents on Google identified the top three factors as; Reliability, Cost, Safety. In terms of the first two, added value services most definitely have a role to play and COVID-19 can only have added extra weight to this reality.