Have you ever wondered why your local grocery store or gas station always offers candy bars and chewing gum at the counter? Cross-selling! Do the same thing! Cross-selling at car dealerships improves margins and customer satisfaction.
Or why the fast-food restaurants ask, “Would you like fries and a drink with your order?”
Much like grocery stores and gas stations, the car dealership market has changed.
As profitability is under pressure, you need to look for new and additional sales opportunities at car dealerships. Customers are worth gold when they are already in your showroom.
Dealerships are quite used to the old ways of selling to their customers. That’s why they are resistant to change. When you talk to dealership managers about adjusting their strategy, they will often protest with the following questions:
“Why do I need to change if it has always been like this?”
“Why do I need to change when I’m already busy?”
Here are the reasons why dealerships need to change their approach to selling:
- Changes in customer needs and behavior.
- Availability of a variety of similar products for customers.
- More competition from non-traditional sellers.
- Shift in environmental thinking.
- Digital and online vehicle sellers.
These factors are beyond the control of any individual member on the market. Sales, costs, organization, bonuses, stocks, pipeline, and communication require careful and robust management.
In this article, we’ll deep-dive into cross-selling at car dealerships: What it is, how to do it, and when to do it.
What is cross-selling?
Cross-selling and upselling are strategies to sell more to existing customers or prospects during the sales process and meetings or when someone visits your website. Check out the case study about car dealership CRM helping with sales process.
Here is an example of cross-selling:
You go to a bike store to purchase a new 10-speed bike. During the sale, the salesperson will offer you to buy a bike helmet at a discount.
For the bike store, this is an opportunity to increase revenue in one sale. For you, this is an opportunity to get a great package deal on a bicycle and a bicycle helmet.
It’s not marketing, cold-calling, or prospecting where you usually pay attention. However, that doesn’t make it any less critical since dealerships already operate with lean margins.
Cross-selling is critical to improve your margins.
Why focus on cross-selling at car dealerships?
First – you cannot rely on merely selling and leasing vehicles along with the added income from the service and repair sales. Traditional areas of the automotive business do not create excellent profit anymore. Therefore, we need to find additional sources of income.
This is where cross-selling at car dealerships comes into the picture.
Second – Customers are already at your dealership. We should use any opportunities to demonstrate and offer something more, much like gas stations’ cashiers.
According to different studies, it’s more expensive to acquire a new customer than retain an existing one. And if you are really “lock-in” a customer, they’re more likely to spend more and purchase more frequently.
Existing customers are easier to sell to because they already know, like, and trust you. You’re more likely to sell to an existing customer, compared to the 20% likelihood of selling to a new lead for new cars. So if your sales team isn’t cross-selling, you’re just leaving money on the table.
Your front line staff is in a great position to cross-sell successfully because they already have the customer in front of them.
The key to successful cross-selling is making an offer that’s appropriate for the customer.
You can use a printed spreadsheet for the qualifications document. However, a more up-to-date alternative would be a digital form in a DMS or CRM system like Modera Salesfront. This can be filled in after a meeting. Make sure all the necessary information has been recorded and easily accessible.
Selling the right product or service – to the right customer – increases profits and deepens the customer relationship.
And the cost of cross-selling? Close to zero.
This makes cross-selling at car dealerships an excellent growth strategy.
Benefits of Cross-Selling
Cross-selling’s main benefits include increased sales revenue, improved customer satisfaction, and increased customer lifetime value.
Cross-selling is excellent for both you and your customers. If you know them well, you can propose something of interest during the customer journey at the ideal point. Your sales and customer satisfaction increases because the product fits their needs better.
How to cross-sell at car dealerships
Opportunities for cross-selling at car dealerships might arise when potential customers browse your website or at the point-of-sale in your showroom.
Therefore, you need to be very good in both areas – online and offline.
Online & Digital Sales Tools
Changes in customers’ behavior and a need for digital customer service make it very important to have an excellent online presence.
Web-shop, vehicle configurator or showroom based digital sales tools would work well and support sales.
To support sales, accessories, and lifestyle products are part of Modera’s vehicle configurator in Web front.
Sales and service advisors can cross-sell if they spot an opportunity during a meeting or even casual conversation with a customer. Customers might mention an interest in a new model or that they’d like to have more functions for the car they’re using. It can be a signal that they’re ready to hear about the options for solutions.
For instance, a customer mentions that he would like to use his SUV for camping trips. At that moment, the salesperson can recommend several off-road, aftermarket options to increase the revenue from this sale.
Some of the aftermarket options can include the following:
- Off-road tires
- Light guards
- Roof rack
- Skid plate protector
- Body armor
Your sales advisors should find the opportunities and advise customers in the showroom.
With digital sales tools, like tablets, you can experiment with different items easier and present more options.
Here is an example of Modera’s tablet-optimized configurator:
Showroom display and mounted on the showroom and demo vehicles.
Please do not forget the traditional brick and mortar side of the business!
A well prepared physical presentation of different lifestyle and accessory items in the showroom and the cars works well.
How do you cross-sell without sounding like a ridiculous car dealer?
1. Understand your customers
If you want to know what would motivate your customers to purchase more of your products, the best way to do it is to ask them directly. Ask your customers what their pain points are and what things they wish you would offer.
For instance, you can ask your customer what they liked the least from their previous vehicle. If the customer mentions that they didn’t want their last vehicle’s interior, the salesperson can recommend an updated interior package.
On the other hand, if the customer complained that his vehicle was underpowered, the salesperson could recommend a performance package.
Your customer’s responses can be your basis in generating the benefits you’ll add in the package, so they agree to your cross and upselling strategies.
Getting to know your customers is of utmost importance for any seller. Once you can precisely understand their wants, needs, and demands, you can give suitable suggestions and persuade them to purchase your products. Therefore, a robust CRM database with notes about customer needs is significant for making professional sales.
2. Offer related products
There is a higher chance of conversion when the products you offer them are something they could use with the ones they have already chosen.
Consider including the following in every new and used car offer:
- Finance and insurance products
- Winter wheels/tires, floor mats, rubber mat for the cargo area, mud flaps, etc.
- Extended warranties
- Discounts on regularly scheduled maintenance
3. Keep a suitable number of recommended items
Please don’t overdo it!
Remember that cross-selling at car dealerships doesn’t always work with all customers. When someone decides that their chosen product is just enough, give them the checkout option. Don’t bombard them with ‘more things that you might like’; otherwise, they might only decide not to purchase anything at all!
4. Use bundles (packages)
When you group your items, it’s a more effective way to encourage customers to buy. For example, you can group a laptop with a mouse, charger, and headphones into a “Technology” package.
We can also group new cars with insurance, financing, winter wheels, trade-in, and service packages in the automotive business.
The bundling of these items helps buyers agree more efficiently as we solve many problems simultaneously.
Ideally, you can present your customer with one deal that covers everything. For example, one deal can include the following items and services:
- New vehicle
- Trade-in offer
- Winter tires
- Aftermarket accessories
With a straightforward package, the customer is more likely to buy. The customer feels he is getting a great deal while the dealership can generate higher revenue and profit.
5. Sell benefits, not features
How do you stand out from your competition if you are both selling the same products and services? You focus on the BENEFITS of the product or service that is only available at your dealership.
When you offer a unique benefit, you create “an edge” for your business.
How to make cross-selling at car dealerships work
WIIFM or WINCS?
It should be called WINCS – Why I’m Not Cross-Selling? 😉
Typically, we fail at this point, and the sales of accessories and lifestyle items don’t fly.
Instead, think, “What’s In It For Me?” from the employee perspective who works on the front line.
The employees can include the sales advisor of new cars, used cars, service, body shop, parts, or F&I.
Everybody is already busy. Therefore, consider the following question: Why should they also focus on this area and convince customers to buy more?
The dealership should link company targets with employees’ targets and share some profit in a sales bonus.
For example: Cut the profit into three shares – 1/3 for Parts Stock employees, 1/3 for sellers (New Car Sales Advisor, Service Advisor), 1/3 for the company.
Build out customer journeys
Along the first step lines, map out customer journeys to identify how they will use the new car.
At that point, they’ll likely be excited to hear your cross-sell offer. Wait until they’ve reached this point before trying to cross-sell. Before they’ve seen the value in your request, trying to sell them something extra will be most likely unsuccessful.
Think about problems and offer solutions that make sense.
Before you try to cross-sell, take some time to review your customer needs and product offerings. Align them with your customer needs and present a sales tool for your team.
For example, if the customer is looking to buy a high-end luxury vehicle, they will want to make sure that the car’s exterior appearance always looks good. Therefore, the dealership can offer discounts on detailing services.
That way, you’ll have a clear objective of what you like to propose and how it might solve your customer’s issue or problem. You can also prove why the product or service you want to cross-sell would be a possible solution.
Sales Funnel principle
Sales funnel for car dealers is the game changer:
- Find customer needs
- offer more
- explain your benefits more
- negotiate more
- close more deals
- satisfy customers more
- earn more.
Not everyone will buy it. However, if you are not cross-selling, you are not making any additional sales at all.
We wish you success utilizing all the potential of your sales opportunities while respecting the customers!
Stay healthy and safe!
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