An investment in tools designed to capture more service opportunities can also pay off for your sales and finance departments. - Photo by andresr via Getty Images

An investment in tools designed to capture more service opportunities can also pay off for your sales and finance departments.

Photo by andresr via Getty Images

Digitization is revolutionizing automotive retail. The customer journey, from research to buying to retention, is witnessing innovative and transformative improvement. Even old-school dealers are asking themselves what role emerging digital trends could play in facilitating vehicle sales, F&I, and fixed ops — and how emerging technology can be leveraged to differentiate your customer experience and build long-term loyalty.

Are you committed to improving profitability storewide? If so, these are the five digital strategies you must be aware of — if not invested in — to compete in the current market.

1. Pull the Trigger on Digital Sales and F&I.

As your dealership continues to play a significant role as a primary channel for building personal contact and relationships with customers, you will inevitably need to adapt your sales infrastructure to a new generation of consumer preferences that necessitates a marriage of your physical and digital presence.

There are a number of new platforms available to dealers today, all designed to help buyers research inventory online and facilitate the majority of the sale from the comfort of their desktop or mobile device. At a minimum, they can offer estimated payment amounts and trade-in value and review current incentives, then schedule an appointment with the dealership to test drive, sign the paperwork, and take delivery of their vehicle.

Dealers looking to take things a step further can create digital showrooms that enable consumers to browse inventory, select finance options, get a trade-in offer, select F&I options, determine budget and payment schedule, add accessories, complete a credit application, and put a deposit down to secure their purchase. And it’s all done online, on your own website.

This convenient, new way of buying (and selling) cars will continue to attract more customers to dealerships and increase conversion rates and F&I sales. The idea is to not revamp the way you do business. Digital retail is just another tool to engage an ever-increasing subset of buyers with evolving preferences.

2. Offer F&I Online.

Research by Cox Automotive shows that 63% of consumers who conduct their research online are more likely to buy F&I products. Starting the F&I process online empowers dealerships to engage and collaborate with well-informed customers before they enter the dealership.

Better yet, the online experience offers an open environment where useful information and modern digital tools like videos, charts, and references help consumers to understand the value offered by F&I products.

Success in F&I is not about controlling the customer’s access to information; it’s about empowering customers to independently research and fulfill their personal needs. The age-old truth still stands: Customers don’t want to be “sold.” To mitigate this challenge, the online F&I process must be an informative and educational experience that leads to a consultative effort once they reach the dealership.

Executed correctly, a technology-aided process allows the F&I manager to have a real conversation with the buyer and match your products to their needs.

3. Sell Parts Online.

According to a study by the Auto Care Association, 85% of customers are using the internet to research auto replacement parts. Parts managers with an eye on the future can consider selling parts online as an effective generator of incremental sales that can make money from both your existing customer base and new customers online — 24 hours a day, 365 days a year.

To do this, you will need a new, dedicated website or an extension to your current website, a good fulfillment process, and a marketing strategy. Start by focusing on fast-moving parts. Consider excluding categories of parts based on price point and margins.

Use text messaging and in-app push notifications to promote new parts and special offers to shoppers and customers. Also consider creating a reengagement strategy for dormant and inactive shoppers. As you experiment with parts supply and a variety of marketing communications strategies, use your parts store as a springboard to promote your dealership’s vehicle inventory and service center to potential buyers as they come near the end of their vehicle ownership lifecycle.

In short, going digital is a great opportunity for your parts department to foster sell-through while capturing new leads for sales and upsell specials for the service center.

4. Localize Service Marketing.

Manufacturers now control many service marketing components, including strategy, messaging, and cadence. This strategy makes sense for the factories because it ensures brand consistency across the nation. However, as you have likely discovered, a one-size-fits-all approach is not necessarily effective at the local level.

Locally customizing service marketing for your dealership and the demands of each of your customers’ vehicle ownership lifecycles — from new owners to pre-owned owners to value-based owners — is critical to competing with nearby franchises and aftermarket service centers.

  • New-car owners: Do not overmarket this group or upsell them on other services. Your main goal at this stage is to build trust and establish loyalty as their warranties begin to expire and they move into the next stage of their vehicle lifecycle.
  • Pre-owned owners: Offer security and peace of mind with prepaid maintenance and lifetime engine warranties. Not only do these services help to generate more profit per sale, they will keep customers loyal to your service department.
  • Value-based owners: Focus on value. These owners are highly sensitive to price and will explore every avenue to reduce their service costs. Consider updating your pricing strategy to less margin per repairs while growing your volume of service appointments.

In today’s ultraconnected world, where just about everyone has a smartphone, text messaging and in-app push notifications can help you target the right service customer with the right message at the right time. Your understanding of the ownership cycle, paired with the right technology, will help increase your share of wallet and win the next service visit.

5. Embrace Geo-Mobile Engagement.

The growth in GPS technology is fueling geo-mobile marketing as one of the most effective digital strategies to help dealership sales and service staff to effectively connect with customers and active buyers directly through their smartphones — whether they are ready to buy a vehicle or need to schedule a service appointment. 

As part of an integrated online strategy, a geo-mobile engagement strategy integrates all the online components — including digital retailing, F&I, parts, and service — into one cohesive digital platform.

Geo-mobile marketing allows dealers to set up a virtual perimeter around their location, competitive dealerships, and local service shops. When customers and potential buyers pass through the perimeter, they trigger a timely and personalized message alert to their smartphone, enticing them to engage and visit the dealership. The digital call-to-action promotes participation such as take a virtual tour, view online inventory, shop for vehicles, research F&I options, schedule a service appointment, shop for parts, redeem a digital coupon, or attend a sales event.

The common thread among these strategies is an attempt to meet car buyers and service customers where they live, connect with them at the most opportune moments, and allow them to work at their own pace and convenience. You might be surprised at the insights you gain and their effect on your bottom line. Your customers will just be happy to have found a dealership that offers an experience that meets their expectations.

Tony della Busa is the CEO of Mobile Dealer, a provider of mobile customer engagement apps and geofencing solutions. Contact him at [email protected].