As the coronavirus crisis has dramatically shifted daily life in America — at least for the time being — businesses have scrambled to find ways to adjust to this new normal. With many Americans ordered to stay at home and others hesitant to go out and shop either due to health concerns or economic worries, many car dealerships are looking for ways to keep traffic coming through their doors during these difficult times.
Although a crisis on this scale is a first in our lifetime, there are lessons to be learned from past emergencies. The 2008 financial crisis, for example, was another challenging period for auto dealerships. The main takeaway for dealerships and other businesses from that time still holds true today: it’s important to take as much action as you can and do it quickly.
3 Takeaways from the 2008 Financial Crisis and the Coronavirus Crisis
Get Help From External Sources
In the past, economic slowdowns have seen help for auto dealers in the form of incentives from manufacturers (after September 11th, GM rolled out a Keep America Rolling campaign) and a boost from the federal government, as seen in the Cash for Clunkers program that provided economic incentives for Americans to purchase newer, fuel-efficient cars in the wake of the 2008 financial crisis.
Many auto manufacturers are offering generous incentives and discounts in light of the coronavirus crisis today. From interest-free financing for 84 months and deferred payments for up to 120 days to loss protection programs that provide a safety net for owners who may lose their jobs after leasing or purchasing a vehicle, manufacturers are stepping in to make consumers feel more comfortable in committing to a car lease or purchase.
What can auto dealerships do to be proactive, however?
Boost Focus On Your Service
With all of the focus on car sales during times of economic crisis, it’s easy for dealerships to forget their most reliable customer pool: their current customers. Focusing hard on these customers is essential to making sure you are effectively lining up future sales — as well as keeping traffic flowing into your service department.
This was what Greg Greenwood of Greenwood Chevrolet discovered during the heart of the 2008 financial crisis. This was when he began using Performance Administration Corp’s Certified Maintenance® program.
Greenwood saw the writing on the wall regarding a pullback on vehicle sales until consumer confidence had time to increase. As many people retreated with their advertising spend and incentive programs, he realized that investing in the service side of the business would help to load both the sales and service pipelines for the future when the recession was over. His customer retention rate had been hovering at 18 percent when he engaged Performance Administration Corp and began including complimentary maintenance on all deliveries. Not only did this fill up his service pipeline — it also brought those same customers back when the economy picked up and people began shopping for new cars. Within 12 months, Greenwood Chevrolet’s customer retention rate shot up to 56 percent.
Evolve Your Offerings
It’s always essential to provide the best dealership experience to your customers, but during unprecedented times like the ones the world is currently experiencing, it’s essential for all businesses to listen to their customers and evolve quickly to serve their needs. One of the biggest pieces of feedback dealerships are hearing from customers is that they are afraid for anyone to touch/get in their vehicles, as well as to test drive any new vehicles.
This feedback has been a call-to-action for many dealerships to immediately implement new standards around handing the way vehicles are test-driven and even sold. These include sanitizing all high-touch areas in cars (steering wheels, gear shifts, keys, seat belt latches, and door handles) before and after service visits and test drives. Dealerships are also providing hand sanitizer, social distancing in showrooms, offering solo test drives, and delivery of purchased vehicles. In addition, customers are increasingly able to fill out all paperwork online.
While times are difficult and uncertain, the lessons learned from past periods of difficulty are clear: act swiftly and do so now. By focusing on customer retention, addressing customer feedback, and evolving to meet those needs, your dealership will be in better shape not only to weather this storm — but to emerge on the other side with numbers that are even better than before.