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Under-performing dealers need a digital ‘shake-up’ to help boost sales

Karl Davis

Many under-performing retailers are failing to turn leads into sales opportunities by not having suitable processes in place to accurately capture and manage customer data.

According to Karl Davis, managing director of independent automotive consultancy Coachworks Consulting, some dealers are losing vehicle sales and aftersales work by not fully utilising the IT systems they already have in their facilities.

He said: “Digital utilisation in the dealer sector requires a major shake-up if an acceptable return on the digital investment is ever going to be achieved.

“In a tight market some dealers are unnecessarily losing sales because they do not have simple processes to capture sufficient customer data in the first place or keep it updated and this is hitting their profitability.”

Davis said Coachworks Consulting has seen examples of dealers that do not have accurate showroom logs of customer enquiries, whether they’re online, telephone or physical.

He said it was outrageous that dealers are investing large sums in sophisticated dealer management systems (DMS) and software, which have significant ongoing costs, but are failing to use these tools to generate sales.

Davis said: “Keeping accurate customer records up to date requires no skill whatsoever but it does require management discipline and processes.”

Davis cited recent research by THREE60 CRM which showed that an 80% conversion rate is being achieved by dealers where their propensity modelling, based on drive time, vehicle age and whether a service plan is in place, scored opportunities at over 90 out of 100. This compared with just 20% for those who had a score of less than 70.

Davis said: “We are seeing too much reliance on guesswork in the sales process, often because staff have not been properly trained to use digital tools and remain ignorant of how they can help them in their work. Managers should be leading by example by promoting best practices.”

Davis said there is a polarity in digital utilisation between the best and worst performing dealers. Upper quartile retailers know exactly how much their ongoing IT costs are and the return on investment. They also have robust processes in place to ensure data is accurately captured, maintained and mined for both vehicle sales and aftersales.

While Davis said under-performing dealers continue to invest in the tools but do not have the processes to fully utilise them and struggle to trade profitably.

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