Dealerships Can’t Keep Customers in an Information Vacuum During Inventory Crisis

Will this new car arrive in a month? Eighteen weeks? Or maybe never?

In the era of inventory shortages caused by COVID-19 and microchips, many new car buyers are playing the waiting game, a game they don’t like.

That stress can lead to friction, but simple communication to manage expectations can keep customers informed — and content — and can also boost retention and loyalty, dealers and consultants say.

Carlton Honda of the city of Prince Albert, in central Saskatchewan, is familiar with these issues, which affect retailers from coast to coast. By the end of February, the small dealership, which typically sells about 240 new vehicles a year, had 22 buyers on a waiting list, and the only new Hondas in stock were two HR-V crossovers.

According to general manager Steve Jeffers, sales staff contact customers waiting for vehicles whenever there is an update.

“We just phone them and let them know if the car is moving or not,” Jeffers said. “If it was scheduled for March 1 and it doesn’t arrive until April, we let them know.”

And it works.

“Ninety-nine percent” of customers are understanding, he said, and there are no hard feelings if a buyer finds a vehicle elsewhere.

Maintaining contact with customers throughout the ownership cycle has become essential as dealerships shift their focus from customer acquisition to retention, said Jeffrey Williams, president of Absolute Results, a company consultancy based in Surrey, British Columbia. In a Jan. 14 Automotive News Canada podcast, Williams said retention has dropped to around 30% over the past decade.

CUSTOMERS NEED TO KNOW

“Communication is the most important thing,” said Jim McManes, master dealer for the McManes Automotive Group of Calgary, which has eight dealerships representing eight brands in Alberta, British Columbia and Manitoba. More calls or messages to customers keep them updated on the status of vehicle orders, he said.

While Steve Chipman, CEO of Winnipeg-based Birchwood Automotive Group, said customer follow-up remains “rooted in the sales process”, what has changed over the past two years is the frequency of communication. .

Since the pandemic hit two years ago, Chipman said, staff at the group’s 22 dealerships in Manitoba and Saskatchewan have been providing new-car buyers with weekly updates by text, email or phone as and as the vehicle progresses through the build cycle. Up to 1,500 orders are on the way across the dealer group, he said.

“Where the challenge [in maintaining a positive customer relationship] that is, if a factory order is canceled,” Chipman said. “It’s almost like it’s not an order; it’s a Christmas wish. You don’t have the car until it’s under the tree.”

Increased communication with customers also means increased internal communication. Every Friday morning via video, Chipman updates its 1,100 employees on inventory and other issues. He also makes periodic appearances – about once a month – on a Winnipeg talk radio station, updating the public on industry trends. As with many dealerships, the Birchwood call center also contacts customers regularly to remind them of service intervals.

The pandemic “has changed everything for the majority of merchants,” said Dominic Sigouin, owner of Noahvik Consultants near Montreal. Over the past 20 years, dealerships have developed sophisticated online strategies, shifting the focus from building customer loyalty to finding new customers through social channels such as Google, LinkedIn, YouTube and TikTok.

But with cars and parts in short supply, “that bubble just burst,” he said.

“Goodwill Appeals”

That’s why dealerships need to put their focus back on retention, he said, throwing back to the pre-internet days when dealerships sponsored events like Santa Claus parades to bond with the community. . Sales staff must also make “goodwill calls” to maintain relationships with existing customers.

“At present, [many sales staff] don’t have a real relationship with the buyers,” Sigouin said.

“They just send an automated message once a year – Happy Birthday, blah, blah, blah.”

Instead, sales staff must develop a genuine relationship with customers that keeps them up to date with that customer’s changing needs.

“If you have a real relationship, you will know that the customer is no longer happy with their vehicle – perhaps they need more space for their children – and you will react proactively.”

Client contact can be as frequent as once a month through events such as hosting a guest chef and inviting VIP clients to attend.

The frequency of one-on-one contact could also be increased by reshaping the duties of sales staff into those of a customer service concierge, Sigouin said. A single person becomes the single point of contact with the customer, performs phone calls and acts as a service advisor.

“I will be your service advisor; I will be your salesman,” Sigouin said. “So you really have a relationship.”

About John A. Provost

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