We’ve previously made the point that price is an important factor, but it’s far from the only factor to consider when buying cars from private owners. Here are the top 5 factors that matter more than price. Dealers need to keep these in mind to keep winning business from sellers if they want to achieve long-term, sustainable success.
1. Process: Make Selling Easy and Clear
The process you develop and implement for buying cars from private owners is the most important non-price factor that has a huge impact on the level of success your dealership achieves when buying cars from private owners. Here’s where the disconnect comes in: It’s also the factor many dealers have given the least amount of thought to. If your approach for buying cars from private owners can be summed up as “buy low, sell high,” then you’re missing out on all the benefits of having a clear, transparent, consistent process that makes it easy, fast, and convenient for private car owners to sell to you.
Think about the amount of effort you’ve put into strategies and tactics for selling new cars to customers. You’ve perfected the art of reading the customer in order to guide them toward the car that will best fit their lifestyle and desired image. You know how to get to yes in a way that keeps the customer relatively happy about buying a new car. You put a lot of time and money into advertising your dealership and its approach to selling new cars. All that effort into selling new cars, but when it comes to selling used cars, all you’ve really got is “buy low, sell high.”
To make matters worse, your profits on the sale of new cars is surprisingly thin. Everyone expects to pay the invoice price or very close to it, which means in the big picture you’re making very little and may even losing money on the sale of a new car. Your efforts then turn to the profit you can make on F&I products and service contracts.
By contrast, the profits you can make from selling used cars can be much higher, and you still have the opportunities of boosting them with F&I and service contracts. It’s easy to see why the temptation to follow the mantra of “buy low, sell high” is so attractive. But it’s not the way to win the game in the long haul, which is going for volume, not obsessing over price. And to win the volume game you must have a clear, transparent, consistent process that treats customers right.
2. Dedication: Structured, Effective Follow-Up Communication
There are many components that go into the kind of process resulting in longer-term success for dealers in buying cars from private owners. One of the most important is being dedicated to structured, effective communication with new, returning, and prospective sellers. You must learn how to hit the “sweet spot” of providing enough initial and follow-up communication to keep the customer engaged without going overboard and annoying them. You must also figure out what content in the messages is the most effective, as well as striking the right tone that will work across a broad spectrum of customer types. Reasonable persistence is the name of the game with this customer communication component of the process.
Getting the content, the tone, and the frequency right are all strategic choices that take a serious effort to develop and test to figure out what works best. And then you still want to monitor your engagement statistics over time to find out if changes or adjustments should made to keep it effective. The idea here is to diligently pursue continuous improvement.
3. Service: Never Underestimate the Impact of the Customer Experience
Long-term success in buying cars from private owners must maintain a laser-focus on the customer experience. It’s got to be better than what they will experience with other options for selling their car, whether that’s another dealership’s trade-in offer, a private sale on their own, or selling to one of the big national companies that buys cars. The good news is that with the right process, effective communication, and keeping the customer experience front-and-center, it’s surprisingly easy to outshine your competitors. What goes into this superior customer experience? It’s simply a matter of being informative, helpful, transparent, and polite.
4. Flexibility: Responsiveness to Customer Needs
Another aspect of the customer experience that deserves to be highlighted here is being flexible and responsive to every customer. Every customer has unique needs. You need to be a good listener in order to recognize, understand, and respond to those needs. Nothing turns a customer off quicker than when they feel like they’re not being heard. The goal here is to meet the customer where they’re at based on active listening to their needs, and then flexibly adapting your process to meet those needs. This kind of responsiveness leaves a deeply favorable impression with the customer. It’s what turns a customer into a brand ambassador who sings your praises to their family, friends, and social networks, leading to new customers and repeat business.
5. Perspective: Customers as Long-Term Assets
Finally, we want to emphasize the importance of having the right big-picture perspective on what a customer is to your dealership. Dealers who follow the “buy low, sell high” mantra when buying cars from private owners are making the mistake of viewing the customer as a short-term means to the end of turning a quick profit. Many dealers don’t realize the subtle effect this has on those customers. They may not be able to put their finger on it, or articulate it, but they feel it. They pick up on what’s happening, even when it’s only on a subconscious level, and it leaves a bad taste in their mouth. Those customers won’t come back for repeat business. They won’t become brand ambassadors. They may not leave a review at all, or if they do it won’t be a positive, glowing review.
The antidote here is simple: Instead of viewing the customer as a short-term means to an end, think of them instead as a long-term asset. If you make an investment into this long-term asset, you will reap long-term dividends in the form of repeat business, referrals, and positive reviews. The brand advocacy benefits alone make the investment here worth the effort. With the right care and attention paid to each and every customer, you build an army of loyal customers to help you win the battle in your market. This shift in perspective is a powerful element of the Driveo way.
The Process is Focused on Excellence in Customer Service
Did you notice how after having a clear process in place that all the factors discussed above are various aspects of customer service? Make no mistake, this is a critical factor if not the most critical factor of all when it comes to achieving a successful and steady flow of business buying cars from private owners. You might also be thinking that the amount of work that goes into creating and maintaining the kind of process needed is way more work than your dealership can afford to put into it. But you do not have to reinvent the wheel yourself!
At Driveo, we’ve already done all the work in designing, testing, and proving the process you need to get the desired results for your dealership. Even better, we’re making our results-oriented process available to one dealership in each major geographic market. Find out how to dominate inventory acquisition in your market on the Driveo for Dealers page.