What Happens When the Gold Rush Ends?
Posted November 23rd 2022, By Arnold Tijerina
Right now, dealers are seeing impressive numbers and in the past couple of years, many dealers have gotten lazy in mining their own databases for business, quite frankly. It has been so easy to sell the inventory that they have, and many have taken it for granted.
Many dealers are saying that they will just keep riding the wave until it ends. But what then?
If you know it’s going to end, why would you not prepare for that?
You don’t just have a CRM—you have a marketing database with that CRM. Those customers may be ready to engage and be in market.
When the dust settles and the rush of customers starts to dwindle because everyone now has inventory, a lot of dealerships are going to realize just how many opportunities they’ve missed through relying on high demand and scarce inventory due to supply chain shortages. This is not a slight against dealers and managers, or even salespeople—we’ve all had it easy the past couple years and in a world where nothing was certain, the influx of business was a constant we could rely on.
Why bother with extra marketing? Why spend time revisiting existing customers for follow-up when you can just let the leads keep walking in by letting people know that you’ve got inventory?
Because now, inventory isn’t enough. And especially in the powersports industry where people are buying for fun, the reality of life after COVID is settling in and the demand for vehicles and powersports units will most likely increase but in a way more competitive nature than it is now. It’s not a matter of if, but when. For dealers that don’t have a dynamic CRM in place to help keep business moving, it could be a devastating blow.
Increased Efficiency is the Answer to Short Staffing
Powersports dealers have had to be efficient. They always have, and even more so now. Compared to automotive dealers, there is simply a shortage of people who are looking to buy powersports units. Independent auto dealers are still sitting at around 8-10 units (as an example), when they really need a 20-to-1 sale ratio. Even just as a salesperson, you’re not making enough money if you’re not selling enough units.
You can’t really pull off the pandemic recovery unless you have a capable CRM. Does your system help you accommodate when you’re short-staffed? Is it still helping with things like automated follow-up? Many of the dealers that work with PSX Digital have these tools and know they need better solutions, and now, with PSX Digital, they have everything at their disposal to ensure that they can take care of every part of the business.
It's a game of efficiency. Right now, dealers are getting by without those high ratios, but soon enough, it’s going to influence their business. Imagine trying to weather storms like this and not having the right tools set up. You can plan for now, but you also must plan for the future. If you have the wrong tools for that, your dealership may suffer.
What is the wrong tool? What is the right tool?
Your inventory management system is an engine for your website. Your website is an engine for your database marketing and direct marketing. These are all engines for your CRM and opportunity management system. If these things are not cohesively working together as if they are one, it will cause inefficiency and friction. The marketing guy blames the inventory guy, the inventory guy blames the DMS (dealer management system), etc.—we’ve all been there and there’s no reason for it.
The automotive dealership industry is showcasing some of the biggest pain points for the modern CRM. Different departments are constantly competing for budgets and there is so much friction in their tech stack that it’s no wonder there is friction for the customer. And you can’t eliminate that friction on the customer side unless you start on the dealership side.
That starts with owning all the pieces. Too many competing agendas just won’t work.
You must be able to automate things and improve efficiency. Salespeople can’t come in each morning and be tasked with sending out 50 follow-up emails to keep customers informed about new products, services, etc. when they should be out on the lot or the salesfloor, handling follow-up and taking care of other things at the same time.
There are so many hats that a dealer must wear. When you’re short-staffed, there is a lot of multitasking going on and some people are still using first and second-generation CRMs that require a lot of manual work. And to boot, 2/3 of the conversation is happening outside of the CRM and that’s going to need to be logged— that’s simply one more thing added onto the salesperson’s plate but is absolutely crucial. How is a dealership expected to follow up with a ghost customer? If they never get into the CRM, there is no way to continue to attempt to engage them.
That is the problem that PSX Digital is solving.
How do we get more efficient? And by doing so, how do we reduce the friction to eventually create a customer-centric dealership that makes things easier for everyone?
That comes in having the right tools, including a dynamic, modern CRM that’s capable of living up to the needs of the modern business. Most of the CRMs available were developed based on what was happening in the market 10 or 20 years ago. But how many CRMs have been developed in just the last five years?
That’s right—not a lot.