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Boost your business for £5,000: imagery, vehicle prep, and data


How often have you heard the adage ‘you have to speculate to accumulate’? It’s a cliché because it’s true of pretty much every type of business – including independent used car dealers, who can generate tangible growth from a relatively modest investment.

Take £5,000, for example – it doesn’t get you much. You certainly couldn’t buy a new car (the Dacia Sandero, the cheapest new car on sale in the UK, starts at £5,995).

However, if you invest £5,000 in the right way, with a view to getting a return in the longer term, you may be surprised at what you can achieve.


Build a better website

A Deloitte report at the end of last year said 78% of the UK’s adults use a laptop, with 85% having a smartphone. If an independent dealer wants to get to these potential customers, they need a fully functioning, regularly updated website.

Simon Crace, managing director of MB Advertising, said: “The most important things any independent dealer needs to concentrate on is their website and the digital presentation of their stock.

“The majority of their customers are going to be engaged online, so when they get them to their website, it’s about having a fully mobile-responsive website.

“Getting their digital forecourt correct is crucial, with quality images – and that in itself is an investment of technology and resource. Somebody needs to take the photos, making sure they have processes in place in the business to get the pricing and the description of the car correct.”


Polish your stock presentation

High-quality photographs are, of course, of little use if the cars themselves are scuffed, damaged or dirty – which is where investing in SMART repairs and valeting offers another way for dealers to invest.

Martin Peters, sales director for Autoclenz, outlined the opportunities that such services can give larger independent dealers – and the rewards they can reap.

“We’re not talking about £5,000 investment in terms of equipment and everything else. Instead, you get an outsourced partner that will come in and look at the profile, the stock, and come up with a fixed amount.

“With some of the independent dealers, we could charge a flat rate of £150, £175 a car. We will get the vehicle body damage rectified, unless it’s significant (i.e. not a SMART repair) and the car will be valeted.

“Now, both of those done correctly can, for an average used car, result in between £1,000 and £1,800 profit for most dealers.

“So that £150 investment can secure £1,500 of profit and somebody else is managing that on their behalf.”

For smaller dealers, who don’t have the stock turnover to justify a permanent on-site team, preparation is still important.

“To maximise profit for a used car, the car has to be presented well: it’s as simple as that,” said Peters.

“So, if there’s a SMART repair on the car and you’re not doing them, you’re not going to realise the best market value for the car. Whoever you pay to do it, you’ve just got to get it done – and you’ve got to get it done consistently.”

Clean, damage-free cars play well with customers and generate good, old-fashioned word of mouth, which is still important in the online era – especially if it’s combined with digital technology.

As Crace explained: “I would recommend that dealers ensure that their website has plenty of testimonials. There needs to be social proof that other customers have had a good experience and that they can trust this retailer to buy a used car from.”


Make your marketing work harder

Dealerships can employ specialist suppliers to ensure websites are always working hard to attract and retain consumers. Jennifer Allen, head of retail marketing for GForces, explained what they can do for their clients, for an affordable sum.

“We have a product that we call managed service, which allows clients to take a bit of a back seat with their website maintenance and any site enhancements that they might want to make further down the line.”

Allen said that not everybody has the time or expertise to carry out search engine optimisation (SEO)  and pointed out that Google  made 1,653 updates to its search algorithm last year.

“Managed service is all about keeping abreast of the latest updates and making sure that the website is continuously updated and maintained. Not just for SEO, but that budget can be used for a range of different tasks.

“A big focus for us on managed service is a) flexibility of the budget and b) visibility. So, we work with a lot of clients who might change or throw a new business objective at us, and we’ll essentially tailor and tweak the strategy to make sure that we’re helping them hit those objectives.”

Allen said GForces would always advise taking a multi-channel approach to marketing: “Different people can be marketed at in different ways, so it’s important to try and catch as many different target markets as possible.”

Concentrating on keeping your website and your online campaigns up to date and relevant to your customers – whether potential or previous – is a good investment that can reap rewards. Allen said: “For our last plate-change adverts in March 2018, managed service clients saw an increase, year-on-year, in their organic sessions by 38.36% and a year-on-year increase in organic web leads of 63.84%.”


Clean up your customer data

Apart from stock presentation and marketing purposes, a website is also important as a method of data collection to help convert enquiries into sales. Investing money into making that data work harder can be highly worthwhile – but the data being used by the dealer has to be good in the first place, said Jeremy Evans, managing director of Marketing Delivery.

“The first thing an independent used car dealer could do is audit their data collection – how they record every enquiry that comes into the business – so that they can do something with it. The sort of things we do would be to put in place email follow-ups to enquiries, email car stock alerts as the stock changes, and plug dealers into Facebook to put stock in front of existing customers and potential new customers. That all starts with data capture and data quality. You need the data to be there to put us in touch with people.”

Should a dealer’s data not be up to standard, Evans said Marketing Delivery could put them in touch with a lead management company first.

“Everything we do is around pulling data from dealer’s systems and making it work harder, by using our technology to put the dealer and their stock in front of people as frequently as possible. We have algorithms to identify who’s in a contact cycle and what contact is due next – and that’s all based on having the data available to us for that dealership.

“When we first deal with used car dealers, they need a digital showroom system in place that we can access data from. We can then assess the quality of how that data is being recorded.

“If a dealer wants to spend the money on a programme, for £5,000 – or perhaps a little bit more – they’d get 12 months’ worth of us extracting their data and following up on an agreed sales process contact cycle, using all the leads coming into the business to squeeze out the extra that the salespeople have left behind, follow up the leads and keep the used car stock in front of people on a regular basis.”

That ‘extra’ can come from filtering the leads that take a little longer to close and keeping those customers in a communications cycle.

“We’re seeing dealerships sell anything between five and 10 extra cars per month, to customers who have been identified on our programme as perhaps lost – but who are coming back into the business, re-engaging and then going on to buy a car.”

Crace agreed, saying that after the initial process of getting your website in order, the approach should be both to target as many in-market car buyers as possible into your website and then retarget them.

“Dealers need to invest in the smart channels and target in-market consumers. They’re customers who are putting their hands up online, in terms of the keywords they’re using in Google, or the websites they’ve visited where they’re leaving a footprint. It’s important to target those consumers.

“Then there’s implementing a retargeting strategy, which means when customers leave a dealer’s website, when they’re shopping or browsing on other websites, you can have the dealer’s advertising appear. It’s a very cost-effective way of getting that consumer back into your website to enquire.

“It’s about focusing on trying to be highly targeted and maximizing every visitor to your website, as much as you can. Most of our clients have enough traffic and they have enough leads. They probably don’t convert that traffic into enough leads or convert those leads into enough sales.

While Evans said the return on investment can vary, depending on the quality of the data a dealership has to work with, he added: “There’s absolutely no reason why an independent used car dealership should be any different in its data quality standards than a franchised dealership. The same processes of keeping customers involved and keeping them coming back to buy a car are equally relevant.”

Crace said that online customer contact is also vital.

“Lead management is very important. Most customers for used cars would probably be searching for them between 6pm and 9pm. Does that dealer have a live chat channel open and are they open for online business?

“Selling used cars is all about speed of response because most consumers will be looking at multiple used cars in any one sitting. They might make two or three enquiries in one session and if only one dealer gets back to them straight away, the chances of that dealer being the one that sells a car is a lot higher than those who don’t respond. Investing in live chat to manage those inquiries at night will always offer a competitive advantage.”


Improve your stock turn

Of course, in order to sell cars online, independent dealers need to have stock that buyers actually want to buy – which is where investing in good stock acquisition comes in.

A recent survey by Manheim found that almost 40% of dealers highlighted stock acquisition as the number one commercial challenge in their business.

Martin Potter, group operations director at Aston Barclay, said: “Reducing stocking days for any dealer selling used cars is always a massive consideration.

“We would recommend that dealers invest their £5,000 in accelerating the disposal of any old used stock on their forecourts that refuses to find a buyer. Reducing the price of this stock by between £500-£1,000 per car could accelerate the sale of anything that has been on the forecourt for more than 60 days. Dealers can then invest that money into new stock with the right specification, colour, engine type and mileage that they know is currently in demand with local buyers.

“Greater stock turn leads to improved cash flow and greater profitability.”

Greater profitability is possible for used car dealers if they invest wisely in the business. However they opt to spend it, even £5,000 can increase profits – and lead to more funds to invest in the future of the business.


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