The ongoing microchip shortage and resulting lack of new inventory has changed the psychology of dealership sales staff. Under-trained and ill-prepared at the best of times, these often “green” employees (due to high attrition and the labor shortage) are now afraid to engage with potential customers. This assertion is supported by online lead response data from a 2021 mystery shopper study of nearly 4,000 dealer groups that account for 90 percent of one manufacturer’s sales in all major markets.
The study found that in May (when the chip shortage began), 25 percent of sales staff addressed vehicle availability in online lead response. In September, only 6 percent did. Also in May, 31 percent of sales staff invited the customer into the dealership. That dropped to only two percent in September. Finally, 43 percent addressed payment questions in May. In September, that number shot up to 69 percent. One last point: In May, 57 percent of sales staff sent lead response emails free of typos; that number cratered to 17 percent in September.
It’s clear that lack of inventory affected dealership engagement behavior. Conversations shifted from templated replies that made connections with customers by confirming vehicle availability and by inviting them into the dealership, to personally written emails (hence the uptick in typos) focused on paying retail pricing. In other words, staff panicked. They were afraid to answer inventory questions and unprepared to sell the ordering process that is today’s reality. The fundamentals of lead follow-up went out the window, and so did the basics of building customer relationships.
It’s easy to get sloppy when profit lines are through the roof like they are today. As the saying goes, selling a lot of cars covers up a lot of sins. Right now, we may not be selling a lot of cars, but we’re making a lot of money. As a result, we’ll suffer poor sales performance, weak processes, and unaccountable managers. But, we’re approaching our own Game of Thrones “Winter is Coming” moment. Inventory levels will rebound; you will have cars on the ground. Now is the time to develop people and processes for a “serve not sell” mindset so that 6, 12, and 18 months down the road when the supply chain relaxes, you have relationships to mine for sales in the moment and in the future.
I would argue the first step is to create, or reinforce, lead management processes that lean heavily on proper CRM usage. The whole idea of the CRM is that it is a reminder tool for who to call, why to call, and when to call. Best practice is to touch customers for a 90 to 120-day period. Cadence of communications will depend on a dealership’s cultural beliefs. For example, those in the realm of subprime or special finance may have a follow-up cadence that is more aggressive than a luxury dealer. Maintaining communication with a broad number of opportunities who can’t or won’t buy now, fills the pipeline for when supply relaxes and staff have to again earn sales.
The second step is to move from a sale-at-any-cost mentality to a service mentality. To be sure, this requires training and conversations around how to cultivate sales staff into highly knowledgeable sales consultants who are well-versed in what a dealership has to offer in addition to selling vehicles on the ground. At a minimum, this must include training on how to sell the vehicle ordering process which may be here to stay even after inventory levels rebound.
The fundamentals of lead follow-up and relationship building are more important than ever for when winter comes and the supply chain relaxes. Those who train sales staff to handle and respond to market issues will be the winners in our own Game of Thrones.
Lawson Owen is the founder and CEO at Proactive Dealer Solutions. He is a thought leader in lead and process management and has been inspiring management teams for over 20 years. Lawson has helped to implement more than 4,000 business development centers throughout the US and Canada.
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