Have you ever wondered why your local grocery store or gas station always offers candy bars and chewing gum at the counter? This tactic is called cross-selling and it’s high time you do the same thing. Cross-selling at car dealerships improves margins and customer satisfaction significantly.
Much like grocery stores and gas stations, the car dealership market has changed and you need to evolve with it to succeed.
As profitability is under pressure, it’s time to look for new and additional sales opportunities at car dealerships. Remember that your customers are worth gold when they are already in your showroom.
Unfortunately, car dealerships are quite used to the old ways of selling which is why they tend to be resistant to change. When talking to dealership managers about adjusting their strategy, they will often protest with a few of the following:
“Why do I need to change my approach if it has always been like this?”
“How should I find time for adjustments when I’m already busy?”
Why dealerships need to change their approach to selling
- 1. Constant changes in customer needs and behavior.
- 2. Availability of a variety of similar products and solutions.
- 3. More competition from non-traditional sellers.
- 4. Shift in environmental thinking.
- 5. Digital and online vehicle sellers.
These factors are beyond the control of any individual member on the market. Sales, costs, organization, bonuses, stocks, pipeline, and communication require careful and robust management which can help boost your cross-selling opportunities. Next, let’s have a look at some approaches to help increase cross-selling at car dealerships.
What is cross-selling at car dealerships?
Cross-selling and upselling are strategies to sell more to existing customers or prospects during the sales process, whether it’s online or at the dealership. High quality automotive software tools can help any dealership with this objective.
Examples of cross-selling
Nearly every business has possibilities for cross-selling. E.g. you go to a bike store to purchase a new bicycle and the salesperson will offer you to buy a bike helmet at a discount.
For the bike store, this is an opportunity to increase their revenue from this sale, while for you, this is an opportunity to get a great package deal on a bicycle and a bicycle helmet.
It’s not marketing, cold-calling, or prospecting where you usually pay attention, however, that doesn’t make it any less critical since dealerships already operate with lean margins.
Why focus on cross-selling at car dealerships?
First – you cannot rely solely on selling and leasing vehicles along with the added income from the service and repair sales. Traditional areas of the automotive business do not create the expected profit anymore. Therefore, dealerships now have a need for additional sources of income.
This is where cross-selling comes in.
Second – Customers are already at your dealership. At this point, it’s important to use any opportunity to demonstrate and offer something more. There’s always something that could benefit the customer further.
According to various studies, it’s more expensive to acquire a new customer than retain an existing one. This means, if you really “lock-in” on a customer, they’re more likely to spend more and purchase more frequently.
Existing customers are easier to sell to because they already know, like, and trust you. You’re more likely to sell to an existing customer, compared to the 20% likelihood of selling to a new lead for new cars. So if your sales team isn’t cross-selling, you’re just leaving money on the table.
Your front line staff is in the perfect position to cross-sell successfully because they already have the customer in front of them along with every opportunity to add that much-needed personal touch.
The key to successful cross-selling is making an offer that takes into consideration the preferences and needs of each specific customer.
You can use a printed spreadsheet for the qualifications document. However, a more up-to-date alternative would be a digital form in a DMS or CRM system like Modera Salesfront. This can be filled in after a meeting. Make sure all the necessary information has been recorded and easily accessible to all relevant parties.
Selling the right product or service to the right customer increases profits and deepens the customer relationship. This is essential for long-term customer satisfaction and retention.
And the cost of cross-selling? Close to zero.
This makes cross-selling at car dealerships an excellent growth strategy.
Benefits of Cross-Selling
The main benefits of cross-selling include increased sales revenue, improved customer satisfaction, and increased customer lifetime value.
Cross-selling is excellent for both the dealership as well as its customers. If you know them well, you can propose something of interest during the customer journey at the ideal point. Your sales and customer satisfaction increases because the product fits their needs better and customers appreciate the personal touch.
How to cross-sell at car dealerships
Opportunities for cross-selling at car dealerships arise at various touch points with customers. This may happen when potential customers browse your website or at the point-of-sale in your showroom.
This means it’s imperative to provide exceptional service both online and offline.
Online & Digital Sales Tools
The constant changes in customer behavior and a need for digital customer service make it very important to have an excellent online presence.
Online store, vehicle configurator or showroom based digital sales tools have proven to work well and support sales.
The objective to support the sales of accessories and lifestyle products is a vital part of Modera’s vehicle configurator in Webfront.
Example:
Sales and service advisors can make it a point to cross-sell if they spot an opportunity during a meeting or even casual conversation with a customer. Customers could mention their interest in a new model or that they’d like to have more functions for the car they’re currently using. It can be a signal that they’re eager to hear about the options you can provide.
If a customer visiting your dealership mentions that he would like to use his SUV for camping trips, there’s a perfect opportunity for cross-selling. In that moment, the salesperson can recommend several off-road, aftermarket options to increase the revenue from the sale at hand.
Some of the aftermarket options can include the following:
- 1. Off-road tires
- 2. Light guards
- 3. Roof rack
- 4. Skid plate protector
- 5. Lightbar
- 6. Body armor
Sales Advisors
Your sales advisors should find the opportunities and advise customers visiting the showroom.
With digital sales tools like smartphones and tablets, you can experiment with different items easier and present more options.
For example, a tablet-optimized configurator allows you to display the options on the showroom wall via a display connected to the tablet. This is a great way to demo vehicles.
However, you can’t forget the traditional brick and mortar side of the business.
A well-prepared physical presentation of different lifestyle and accessory items in the showroom and the cars is till something that works well.
Switching gears a bit, with cross-selling, more often than not, the question of not sounding like a pushy car dealer arises. Let’s jump into ways to avoid that.
1. Understand your customers
If you want to know what would motivate your customers to purchase more of your products, the best way to figure it out is to ask them directly. Ask your customers what their pain points are, what are some things they wish you would offer, etc.
For instance, you can ask your customers what they liked the least about their previous vehicle. If they mention that they didn’t really ove their last vehicle’s interior, the salesperson can recommend an updated interior package.
On the other hand, if the customer complained that their vehicle was underpowered, the salesperson could recommend a performance package.
Depending on the customer’s responses, your sales staff will have the basis in generating the benefits they’ll add in the package, so the customers are more inclined to agree to your cross and upselling strategies.
Getting to know your customers is of utmost importance for any seller. Once you can precisely understand their wants, needs, and demands, you can give suitable suggestions and persuade them to purchase your products. Therefore, a robust CRM database with notes about each customer’s specific needs is crucial for making professional sales.
2. Offer related products
There is a higher chance of conversion when the products your dealership staff offers your customers are something they could use with the ones they’ve already chosen.
Consider including the following in every new and used car offer:
- 1. Finance and insurance products
- 2. Winter wheels/tires, floor mats, rubber mat for the cargo area, mud flaps, etc.
- 3. Extended warranties
- 4. Discounts on regularly scheduled maintenance
3. Keep a suitable number of recommended items
It’s vital for any dealership to know the actual demand for each product. Don’t overdo it.
Remember that cross-selling at car dealerships doesn’t always work with all customers. When someone decides that their chosen product is just enough, give them the checkout option. Don’t bombard them with more things that they might like; otherwise, they might end up deciding not to purchase anything at all from you.
4. Use bundles (packages)
Grouping your items is a great and effective way to encourage customers to buy. For example, a tech store can group a laptop with a mouse, charger, and headphones into a “Technology” package.
At a dealership, you can group new cars with insurance, financing, winter wheels, trade-in, and service packages to give customers a better deal, should they opt for it.
The bundling of similar items helps buyers agree more efficiently as many of their problems will be solved simultaneously.
Ideally, dealerships will be able to present their customers with one deal that covers everything. For example, one deal can include the following items and services:
- 1. New vehicle
- 2. Trade-in offer
- 3. Winter tires
- 4. Aftermarket accessories
With a straightforward package, the customer is more likely to go through with the purchase. The customer feels they’re getting a great deal while the dealership benefits from a higher revenue and profit.
5. Sell benefits, not features
One of the biggest questions in the automotive world is how to stand out from your competition if you are both selling the same products and services? The simple answer is that you need to focus on the benefits of the product or service that is only available at your particular dealership.
When you offer a unique benefit, you create “an edge” for your business.
How to make cross-selling at car dealerships work?
It’s crucial to figure out the best way to make cross-selling work at your dealership if you’re looking to increase revenue.
However, instead of thinking “what’s in it for me?” , start thinking how how the upsale could benefit the customer.
The employees can include the sales advisor of new cars, used cars, service, body shop, parts in the discussion, to ensure the customer gets the most out of any sale
The dealership should link company targets with employees’ targets and share some profit in a sales bonus to incentivize more sales.
Build out customer journeys
An imperative step to cross-selling at dealerships is to map out customer journeys to identify how the customers are planning use the new car.
At that point, they’ll likely be excited to hear your cross-sell offer. However, it’s important to wait until they’ve reached this point before trying to cross-sell. Before they’ve seen the value in your request, trying to sell them something extra will be most likely unsuccessful.
Think about possible problems your customers might be facing and offer solutions that make sense to their specific challenge.
Before you try to cross-sell, take some time to review your customer’s needs and product offerings. Align them with each individual and present a sales tool for your team that could help them along.
For example, if the customer is looking to buy a high-end luxury vehicle, they will want to make sure that the car’s exterior appearance always looks good. Therefore, the dealership can offer discounts on detailing services.
That way, you’ll have a clear objective of what you could potentially to propose and how your suggestion might solve your customer’s challenge. You can also prove why the product or service you want to cross-sell would be the perfect answer to their problem.
Sales funnel principle
Building a reliable sales funnel is a game changer for dealers. It’ll help you:
- 1. Find customer needs
- 2. offer more
- 3. explain your benefits more
- 4. negotiate more
- 5. close more deals
- 6. satisfy customers more
- 7. earn more.
- 8. Repeat.
Not everyone will buy it. However, if you are not cross-selling, you are not making any additional sales at all.
We wish you success utilizing all the potential of your sales opportunities while respecting the customers!
