Shift Your Focus to Accessory Sales
- Selling more vehicles isn't a realistic strategy for success today.
- Dealers are being left in the dust when it comes to accessory sales.
The major issue plaguing car dealerships for the last several years has been margin compression. Dealers have effectively combated this by simply selling more vehicles, which was a realistic strategy when vehicle sales continued to sky rocket year after year.
But, what happens when—not if, but when—this trend slows down, or begins to drop?
Where to Find Additional Profit Opportunities:
Many people may look to F&I. After all, for many years, F&I has been the golden gem of front-end profits. It has been good to dealerships since its onset almost 40 years ago, but I’m afraid it has hit its peak. Not just in profit potential, but also because of continued regulations and restrictions.
So, if you can’t teach an old dog new tricks, what do you do? Sometimes you just have to get a new dog… for dealerships that new dog is accessories.
The data supporting the accessory business is compelling considering it’s a $40 billion market and dealers are being left in the dust by specialty shops and accessory retailers. The people buying these accessories are in your dealership already; why not hit them while they are there?
I’m sure you could tell me why not… “been there, done that,” “reward wasn’t worth the effort,” “too complicated.” These are all phrases I’ve heard from dealership personnel when the topic turns to accessories. But times have changed.
Changes in the Accessory Landscape:
The landscape for accessories has changed tremendously. First, many dealers no longer have the choice to avoid accessories simply because of the industry shift. Second, accessory technology available today far exceeds what dealerships were attempting in the past.
Dealers are now able to emotionally engage customers in the accessory process using technology. Customers get excited about seeing accessories on the vehicle they just purchased. When excitement and emotion enter the picture, sales increase.
There is more to accessory selling than just the sale; it touches every area of the dealership and sometimes even outside suppliers. Today’s accessory technology will not only provide the customer with an engaging and effective presentation opportunity, but also streamline the process and remove many of the complications dealers faced before.
Accessories are the answer to both margin compression and stagnant sales. They not only bring profits to your dealership, but have the potential to improve customer and employee satisfaction. Dealerships that embrace accessories, making a commitment to both the accessory process and to using the right technology, will be excited about the performance of their new profit center.
Automotive News recently published an article discussing why dealerships are sourcing lower-grade used vehicles to fill their lots.