Dealer inventory acquisition and your service department
Jul 28, 2022
Global supply shortages have increased the importance of dynamic dealer inventory acquisition strategies. With approximately 2.2 million fewer unsold new vehicles in 2022 than in 2020, many dealers are focusing on acquisition strategies that include more pre-owned vehicles.
Explore the benefits of promoting acquisition through your service department today. See how regular maintenance scheduling and inventory acquisition can come together with Kelley Blue Book® Instant Cash Offer and other tools.
Service appointment as acquisition opportunities
It’s a great time to focus on fixed ops. According to Xtime Metrics and a Cox Automotive analysis, the repair order revenue index increased 9.5% between April 2021 and 2022. The increase in car prices can partly explain the rise in repair order revenue. According to Cox Automotive, the cost of a used vehicle is now over $28,000, on average. A recent Cox Automotive estimate puts the number of new vehicle sales in April 2022 as 20% lower than April 2021. Fewer new car sales put a greater focus on used vehicles, making inventory shortage a reality around the industry.
While fixed ops are a reliable way to keep your dealership operating amid an inventory shortage, it can also be a competitive dealer inventory acquisition strategy. Here are a few ways you can prepare to acquire inventory from service lanes. Routine servicing and cross-departmental communication are two avenues of inventory acquisition to grow your dealership.
Communicate the importance of routine servicing
Start by building trust and promoting your service department. The number of phone calls to service departments in the United States increased by 16.3% in 2021, so you may need to create more awareness of these services if you’re not seeing an increase in demand for your service department.
Inform existing customers and potential buyers about when to schedule a maintenance service and sign that it’s time for a maintenance service. According to Policy Advice, the number of used vehicle sales has increased twofold in 2020, so your consumers must understand when to schedule an appointment and how often their used vehicle needs servicing.
Some consumers are waiting to purchase a car. Fears surrounding current inventory levels may bring customers to your service department who are hesitant to sell their vehicle. Make sure they remain loyal service department customers as you look for opportunities to make a service-to-sales transition.
Bring departments together
If your service department isn’t providing exceptional customer service, you’re not seeing the full synergy of your sales, service, and dealer inventory acquisition strategies. Extend the customer lifetime by scheduling routine inspections for a consumer after selling them a new or used vehicle. Once a consumer is ready to upgrade to a new or newer car, your service department should work to encourage the consumer to trade in or sell their used vehicle.
Increasing inter-department communication can help your sales team spot in-demand used cars owned by loyal service customers. Targeting these high-value, high-demand auto owners with trade-in and cash offers is a competitive way to facilitate a service-to-sales transition.
Customer benefits of consistent automotive care
Using your service lane as a dealer inventory acquisition strategy is beneficial for you, but what about your customers? It’s essential to inspire confidence throughout the process to avoid leaving your customer feeling uninformed. Here are some benefits of consistent automotive care, particularly when selling a vehicle, that you can communicate to your customers.
The first step is to show the customer how they benefit from scheduling routine maintenance before considering selling their vehicle. Everything from regular fluid changes to routine exterior cleaning can help retain value in the vehicle. After a maintenance routine, it’s estimated that a car can be valued at up to $1,000 more than one that hasn’t. If the servicing includes significant repairs, the value difference could be greater.
Increased energy efficiency
Routine maintenance can also increase the energy efficiency of a used vehicle. The U.S. Department of Energy recommends many essential vehicle maintenance tips to conserve fuel. Environmentally friendly suggestions can help customers feel better about driving or selling their used vehicle.
Increased sale price
Immediately after completing a service appointment is a great time to recommend a Kelley Blue Book Instant Cash Offer valuation. Because your team has thoroughly inspected the vehicle, you’re now equipped to appraise it and recommend a purchase or trade-in.
Steps to connect your service department and Instant Cash Offer marketing
Start leaning on your service department for dealer inventory acquisition with these steps. From promoting increased maintenance appointments to utilizing Instant Cash Offer valuations, these steps help promote a more streamlined, cost-effective acquisition strategy.
Become a Featured Auto Repair Center
Start by increasing the visibility of your service department. Kelley Blue Book offers a Featured Auto Repair Center program to help you grow your fixed operation’s revenue. This 24/7 service marketing tool inspires confidence in your department through the Fair Repair Range feature. It also helps streamline the service scheduling process.
As a Featured Auto Repair Center, you can increase your fixed ops revenue and fill your service bays to see more customers. A busy service area means more opportunities to discuss used vehicle acquisition and trade-in possibilities.
Promote loyalty with Xtime’s Spectrum
Once you have steady traffic for your fixed ops, it’s time to drive owner loyalty. Xtime’s Spectrum is a cloud-based system that offers full integration to help promote customer loyalty. A significant factor in consumers transitioning from a maintenance visit to a sale is trust in your dealership. Use Spectrum to launch recall campaigns, easily organize service history, and increase customer satisfaction.
Utilize Instant Cash Offer
Kelley Blue Book Instant Cash Offer is a dynamic tool in any inventory acquisition strategy. By leveraging over 3 trillion data points, this solution offers consumers an appraisal value based on the vehicle’s make, model, trim level, condition, and location. A newly serviced vehicle provides the customer with the best opportunity for the highest offer.
The condition ranges of Instant Cash Offer are a great conversation point regarding any recommended or suggested maintenance tasks. Even if a consumer isn’t ready to sell their used vehicle yet, discussing the repairs that could increase the value of their car is an excellent opportunity to either acquire the vehicle or keep your fixed ops busy.
Promote trust and confidence in the appraisal process
While this tool offers a sight-unseen valuation, you can use it in this stage of your service department inventory acquisition strategy to promote visibility in your appraisal process. Because your service team has already inspected the vehicle and seen it firsthand, you have a clear picture of its value. You can then discuss any recommended repairs and explain how they affect the trade-in and cash values.
Consumers have already seen an Instant Cash Offer at this stage in the process. That means they’re informed of the average value of the vehicle and know a price range they may be able to see from another dealership. Work to retain these consumers by including them in the valuation process. Walk around the vehicle and explain the main features that impact its value.
Offer a competitive value
It’s vital to offer a competitive appraisal in the current used vehicle market, according to Micah Tindor, Senior Director for Kelley Blue Book Instant Cash Offer. Consumers who started with a scheduled service may not be highly motivated to sell their vehicle. Once they view an Instant Cash Offer, they also have a clear idea of its current market value. A low-ball offer at this stage may lead to a lost acquisition opportunity.
Even if a consumer isn’t ready to make a trade or sell their car after a maintenance visit, be sure you have a follow-up plan in place. A 90-day follow-up after the Instant Cash Offer valuation, and standard follow-ups for service scheduling, can all be part of your acquisition strategy.
Explore more dealer inventory acquisition strategies
Tight inventory levels don’t have to mean a decrease in revenue. Find out how to avoid the “empty lot syndrome” and promote your dealer inventory acquisition with Kelley Blue Book industry solutions. Read more to stay up to date on the latest news and industry strategies to see more synergy between your service and acquisition goals. With Kelley Blue Book tools and resources, your service department can help you reach your dealer inventory acquisition goals.