During consultancy visit we are often asked by our customers, “Where does the next growth in used car sales volume come from?” Now the answer to this question is difficult to discuss in finite terms in a blog post; why? Well it depends entirely on where the business concerned is in its growth cycle and to add to the complexities, the answer to this question will change for the business involved, year on year, as growth is achieved and the focus for further growth changes and evolves.
So as you can already see, the answer to this question is not a “One Size Fits All” solution for every business, or indeed for the same answer for the business concerned, on a year by year basis.
However one constant for all the used car operations we are working with, is the need to generate more used car enquiries but in truth, many make the mistake of assuming that, in order to grow used car sales volumes, more and more money needs to be found on a continual basis, for ever more advertising and marketing initiatives, (if they are to increase sales volumes), and this is not always the case.
Now there is no doubt that effective marketing and advertising campaigns are paramount to the successful used car sales operation, but the reality for every business we have either run ourselves, or delivered used car business development consultancy programmes for, is that in the majority of cases, the next years’ growth in used car sales volume is already within the four walls of the business, you just need to understand where to find it and how to maximise the opportunities you are already generating.
We say to all our clients, look at the process of growing your used car sales volumes as being like walking; one leg is labelled “Generating Opportunities To Do Business” and the other leg is labelled “Maximising Opportunities To Do Business”.
You are only walking and moving forward when you are putting one leg in front of the other; if you are doing the same thing again and again, whether it be relying solely on increased advertising/marketing initiatives or continuing to solely focus on closing ratios and maximising opportunities to do business; well think of the walking analogy again and your legs.
If you are trying to grow and move forward using just one leg? Well that’s not walking, that’s hopping, and as much as you can move forward for a while by hopping, it is exhausting and eventually the process collapses. So my question to every business owner is thus; “If you have two perfectly good legs available to you, why would you not use them both?”
Now I know this sounds simple and in reality of course, the complexities of any business, especially a used car operation, mean that finding the answers and implementing them can often be the challenge. But once the correct procedures and measurement processes are in place, combined with an understanding of when it is the right time to change the focus, growing your used car sales volumes year on year becomes second nature, just like walking!
Let’s look at the 2 legs and why it is critical to understand which leg to use, in order to keep forward momentum and thus used car sales volumes growing. Let’s look at the leg labelled Maximising Opportunities To Do Business because this is the best place to start. Start by thinking of your closing ratio to enquiries received and what you think is acceptable?
If you think that a 25% closing ratio is acceptable, (and we won’t comment either way in this article), that means you will sleep soundly at night, happy in the knowledge that for every 100 customers you attract to your business, 75 of them will be lost!
So think first about the closing ratio that you are happy with and then decide how you can get an accurate measurement of this? Without this you will be unable to act effectively and shift your growth focus to the other leg, (Generating Opportunities To Do Business), at the right time.
This accurate measurement of enquiries and closing ratios in your used car operation is of paramount importance in building the foundations of both effective sales enquiry management and operational processes. If you are not achieving your desired closing ratio, let’s say at 25% of enquiries, why would invest more money into advertising and marketing at this stage, only to generate more enquiries that you continue to close at a ratio that you are not happy with?
With accurate measurement of enquiry levels and closing ratios, you will then be able to assess when you reach your desired closing ratio; and until you do, continue to focus your attention on the operational procedures required within your business, in order to achieve your desired closing ratio, not on investing more and more funds into marketing and advertising.
However, this is not to dismiss the importance of advertising and marketing to the successful used car business. Once you have achieved your desired closing ratio and implemented the management controls required within the business, in order to maintain this closing ratio for 3 months, you will then have to look at the other leg, (Generating Opportunities To Do Business), because if you don’t, you are in danger of hopping once again!
This is when your focus for growth must shift back to advertising, marketing and the generation of used car opportunities to do business. What you have done so far and the initiatives you have in place have got you where you are, so don’t rush to change this. Look at what is required to build on what has been achieved; if some initiatives have not worked, divert that money elsewhere and into new initiatives.
The world of advertising/marketing and the initiatives required in order to generate more used car enquiries, are changing at an incredible rate; some of you with successful franchised dealer used car operations, will benefit from the desire created by manufacturer based advertising campaigns, some won’t. I’m sure the average BMW, Jaguar, Mercedes Benz or Audi dealership doesn’t have to work as hard as some other franchise dealerships, in order to drive customers through the showroom doors and to the waiting sales department.
But eventually you will need to look at your own advertising, marketing and enquiry generation initiatives to generate the increase in opportunities to do business required in order to grow used car sales volumes. This process will inevitably lead to many questions;
- What are our platforms of engagement?
- How are we utilising social media?
- Do we have a complete understanding of how used car stock profiling can drive enquiries?
- What are our targeted contact customer acquisition initiatives?
- Are we running any successful lead generation initiatives?
- Is our existing customer follow up structure effective and generating the results required?
- Are we blogging?
- What are our content marketing initiatives?
- What are our direct marketing initiatives?
- Are the current initiatives relevant and in-line with the cyclical demands of the used car business?
- And most importantly, are we delivering The Right Used Car Message, To The Right Used Car Customer, At The Right Time?
In order to grow your used car operation on a continual basis you are going to have to find the answers to the questions above, and many more. If this post has resonated with you and you would like to know more about used car business development and growth strategies, rest assured there is help available?
The owners of Autoformance have owned and run successful used car operations and been at the forefront of the development of approved used car programmes for a host of manufacturers. We construct and deliver used car business development programmes for dealer networks, independents and manufacturers. If you would like to know more about our used car business development programmes, then please do not hesitate to contact either Andrew Banning or Malcolm Thomas at ajb@autoformance.com or mgt@autoformance.com
Alternatively please feel free to call us on 07796 260261, Andrew Banning, or 07834 600642, Malcolm Thomas.
For more information about our services please visit our website at www.autoformance.com
Andrew Banning
Used Car Business Development Director
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