Automotive News Canada - May 2021 - 7

SPONSORED CONTENT

Sales with Trades are " Two-Car Deals "
Get a Two-Car
Deal 48% of
the time by
selling to your
portfolio.

SALES LEADERSHIP
Insights & Selling
Strategies
ing portfolio customers made 32.8%
of these sales transactions and new
customers made the other 67.2%. The
average trade rate from vehicles sold to
existing customers was 47.99%, while
the average trade rate from vehicles
sold to new customers was 33.96%.

By JEFF WILLIAMS
President & CEO, Absolute Results

ESTABLISHED PORTFOLIO
CLIENTS ARE 29% MORE
LIKELY TO TRADE THAN
NEW CUSTOMERS.
Although these numbers show the
payoff of a focus on retention, most
dealers still spend 80% of their marketing efforts-and dollars-on new
customer acquisition.

A " two-car deal " happens every time
a dealer takes a trade, and the second
deal-the sale of the trade-is often
the more profitable of the two.
Here's why: First, the dealer can usually
buy the trade for a favorable price.
Unlike when dealers compete with
each other to buy cars at auctions,
dealers only have to justify a price to
the consumer when acquiring a trade.
Second, they create the opportunity of
additional high-margin service revenue when they recondition the vehicle
in-house to be sold on the used-car
lot. Third, a used car taken on trade
with a story (about the previous owner,
the service history, etc.) typically sells
faster and at a greater profit than a
used car secured from an auction or a
third party.
Where can a dealer focus their marketing efforts to secure a steady stream of
late model trade-ins? Their customer
portfolio.
In mid-April, Absolute Results
conducted a study of 31,980 retail
sales transactions that occurred from
January 1st to March 31st, 2021. Exist-

What simple steps can dealers take to
not only grow the monthly number of
sales they derive from their portfolio,
but also to secure valuable trade-ins
and increase customer retention? Here
are three practical strategies from the
Absolute Results Appointment Culture
playbook:
1. Run a weekly appointment blitz
with your sales team focused on
portfolio customers currently
driving two- to five-year-old
cars. Develop word tracts to ask
customers how their driving
needs have changed, to tell the
" story of the used-car market, "
and to explain why it's an ideal
time to trade in. Have the Business
Development Centre and new
sales-team members reach out to
orphan customers, while the longterm staff engages their previous
customers. Support this blitz with
an appointment bonus and a buyin commission.

ABSOLUTE DRIVE™

65%

AVERAGE TRADE RATE
BY TOP DRIVE DEALERS

I called a Toyota dealer in Vancouver to congratulate him
on 15 deals from the Drive platform last month and he said,
" 15 deals? I got 30! - Every deal came with a trade. "
-Stuart Neal, Absolute Drive

2. Run a monthly Appointment-Driven Event. Create
and deploy a portfolio-based
multi-channel marketing campaign with personalized messaging for each customer. Support
this campaign with an appointment blitz, having the sales team
reach out to customers with a
limited-time trade-in bonus and

ing. A recent Appointment-Driven
Event generated 33 deals-31 of which
included trade-ins! Using the Absolute
Drive platform, more than 100 dealers
across Canada are increasing customer
retention and acquiring inventory with
trade-in rates reaching as high as 64%.

Dealers who are able to secure a steady
supply of used-vehicle inventory are
in a position to win in today's marketplace. As consumers look for alternatives to public transportation due to
the pandemic, the demand for used
vehicles is at an all-time high. Record
numbers of first-time car buyers,
typically purchasers of used vehicles,
are entering the market. Rising prices
and limited new-vehicle supply are also

TRADE RATE CASE STUDY
31,980 RETAIL TRANSACTIONS
January 1, 2021 to March 31, 2021

PORTFOLIO DEALS
CONQUEST DEALS

47.99
percent trade rate

33.96

percent trade rate

Get almost ⅓ more trades

when you sell to a portfolio customer
a virtual pre-appraisal. Have sales
professionals offer private appointments in which they either
" go to the customer " or invite the
customer to the dealership.
3. Engage with your service customers. Every. Single. Day. Use
offers created by a digital tool like
Absolute Drive, which automatically generates " buy-back " or
" trade-up " offers for qualifying
service customers, which will
start a conversation with these
brand-loyal customers-50% of
whom bought from a competitor.
Locally and globally, hundreds of
dealers have proven that these three
strategies both grow portfolio sales and
secure valuable trade-ins. Weekly appointment blitzes have been adopted as
best practice by the hundreds of dealers who have engaged with Absolute
Results' Appointment-Culture train-

fueling the demand for used vehicles.
At the same time, the supply of used
vehicles is down. Rental fleet turnover,
which provided the largest supply of
one- to two-year-old cars in the past,
has drastically decreased. Many business-fleet accounts have extended their
contracts, and exports of late-model
used vehicles to the US continue to
further tap Canada's supply.
All of these factors have created a seller's market, a market in which dealers
can thrive-but only if they have inventory to sell. The solution to winning
the battle for used-vehicle inventory
lies in a dealer's portfolio.
To learn more about Appointment
Blitz training,
Appointment
Driven Events
or Absolute
Drive, point your
camera here:

Automotive News Canada - May 2021

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