Today, more than ever before, customers are walking through your doors with a plan and a price in mind. It’s a dangerous situation that can cut into your margins if you aren’t prepared to teach them something they don’t already know.
A recently released report from Jumpstart Automotive Media and Ipsos reported that 86% of consumers show up to a dealership with a price in mind for the vehicle they want. This price, despite your best efforts will likely be lower than sticker since the report showed that 81% of consumers don’t believe a dealer’s lowest price is available prior to negotiation.
So how do you combat this type of consumer approach when you’re priced competitively and you can’t sacrifice any more off your margins?
Certify Your Lot. Certified Pre-Owned Programs aren’t just for franchise dealers, but you can thank them for the cachet behind the name. Explaining to your customers that your price includes short-term coverage from expensive repairs shows them that you’re providing an assurance of a quality vehicle – something they can’t deny demands a higher-than-normal premium.
Explain Reconditioning. Continuing to build on the fact that higher quality vehicles demand a higher price, you can go into detail with your customers about the work you’ve done to get that vehicle ready for them. Showing that you’ve inspected the vehicle for common problems with brakes or replaced tires and fixed cosmetic problems explains value that no third-party website can account for.
Back-End Products. If a customer is surprised by a monthly payment that includes vehicle service contract coverage, you can go into explaining how the tools they used to come up with a monthly payment don’t include the price of a service contract. If a customer sitting across from you is sensitive enough about a monthly budget to do all these calculations ahead of time, they’ll also be sensitive to what a major repair could do to that same monthly budget. Educating customers on the cost of common repairs and how damaging that can be to a tight budget will help demonstrate just how valuable that relatively minor added monthly cost for a VSC can be.