If the rhetoric out of the United States is anything to go by, our dealers – and original equipment manufacturers – are missing out on some serious cash.
Most purchasers are spending big money accessorizing their new vehicles. They just aren’t spending it at the dealer – and that’s not because they don’t want to.
Let’s look at some statistics from 2015 by Foresight Research (I know this is US data but I’m sure we can agree on the broad market similarities):
- Accessories sales are a $40
billion market; - Nine out of ten consumers purchase accessories and 60% of them spend more than $1500;
- Most would prefer to buy from the dealer yet only 5% do;
- Four in ten base their dealerchoice on the accessories available at purchase;
- But 67% say accessories weren’t offered or mentioned during the
sale process
There are obvious reasons why we should take note of this. New vehicle margins are pitiful and aftersales revenues are shrinking because of longer service intervals. Cars themselves (well, their parts really) are also more reliable. And then, of course, there are the independent repairers.
With finance and insurance coming under increasing scrutiny from regulators, accessories are the last real profit frontier.
And I think it’s one that sits well outside the “too hard basket”.
Customers are in your showroom, they want accessories and they prefer to buy them from you (Foresight Research says buyers prefer dealers for installation, quality and durability). Where else in a dealership can you expect margins of 30% to 60%?
Across the many dealers and OEMs we work with, we’ve seen first-hand how a little focus on accessories can yield a lot. Here are some ways you can claim your share.
Pre-purchase information
Customers are well researched before they walk in, thanks to the internet. OEMs play a key role here and should have easy-to-find and easy-to-use accessories configurators or listings online. Ideally dealers should back that up with available accessories listed on their own websites.
Understandably, the vehicle is the primary product but don’t hide or isolate associated accessories – the statistics prove people want them too. And please, please, please, ensure anything you do online is up-to-date and accessible on mobile.
In the showroom
Gone are the days of printed collateral. Even when print was the main communication medium, accessories brochures seemed to land more dust particles than eyeballs. Again, OEMs can play a key role here by supplying useful technology to help support accessory visibility within the showroom and, critically, you should make this part of the sales process.
It could easily be slotted in between confirmation of purchase and the F&I discussion – allowing the customer to add plenty of accessories with a marginal increase to their monthly repayment. A decent tablet platform combining an accessories configuration with a finance calculator in the hands of your customer is a powerful tool.
Post-purchase mode
Research shows that customers are in an active accessories purchase mode for 90 days post-purchase. This is where most sales go the way of aftermarket – again not by first preference.
Customers will look online first to purchase or to find an independent retailer. OEMs are some time away from selling accessories directly online – they’ll also need to consider dealers in this when they do – so dealers should establish their own online stores and even leverage marketplaces like eBay to get their share of this post-sale revenue.
Basic stores are very easy and cost-effective to set up these days and, in most cases, OEMs will be glad to share photos and text to support your online sales efforts.
Service departments too should create some accessories visibility when these owners eventually return for their service.
These recommendations are basic yet fundamental and, yes, we can help you with consultation and technology to facilitate.
But the easiest thing you can do, starting right now, is simply ask: “May I show you some accessories for your new car?”
Andrew Selim is managing director of FieldForce.
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