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"If you give a mouse a cookie" [1]. You may or may not be familiar with this popular children’s book series by author Laura Numeroff, each book opens with the main character receiving something, like a cookie. Then, in a playful circular and interrelated pattern they ask for more items until we arrive back to the beginning…when they ask for another cookie. There’s an interesting connection to this book and a dealerships Customer Lifetime Value.

For owners, the new car smell fades but the bond with their automobile doesn’t…at least not immediately. Unfortunately, their loyalty is still up in the air. What do you do before, during, and most importantly after the sale that will “nurture” loyalty? 

Realizing that most car shopping begins online, well before contacting a sales professional the dealerships do everything possible to generate showroom traffic.  Once in the store the sales team does everything to make sure the prospect leaves as a new customer!

The accessories market is huge, and growing continually. We've discussed how the auto accessories market has now exceeds $30 billion and is continues to grow.  Not only are customers ready to spend money, they are evidently willing to spend a lot.  If a dealership can capture even a fraction of a percent of that $30 billion market it will dramatically improve dealership profits.US Auto dealers sold nearly 1.45 million cars and trucks in March of 2013, making it the best monthly sales total in 6 years.  While that's good news, the reality is profit margins are still razor thin. There are a couple of lessons that we can draw here:

One of the biggest challenges dealers face when launching an OE accessory sales program is appropriate pricing so that every department gets a share. Typically a dealership’s parts department charges 25-40% mark up on replacement parts and the service department charge their regular labor rate for install. But, they are typically not replacement parts.

Just like fashion accessories they are often an impulse buy, sold in high volume for lower margins.  In order to remain competitive with the store down the road selling aftermarket accessories should be priced with a 10-15% markup based on brand and value.  Now that they are priced appropriately, revenues may be split between parts, service, and sales.

Since the release of the popular film “The Fast and the Furious”, car accessorizing has shifted from being a secret of car gear enthusiasts to a mainstream phenomenon. It even factors into customer retention for service conversions. Two sequels later and the aftermarket accessory market continues to average 8% growth annually. Car dealerships would be wise to keep up. The demand for car accessories is high. And, just like fashion accessories, there are hundreds of options. And, trends change rapidly. Here are four reasons why people love to personalize their vehicles.

Purchasing a car is the second largest investment most people will make. And, unfortunately, many compare the experience to a visit with the dentist. John Krafcik, Hyundai Motor America CEO stated “Americans would rather go to the dentist than visit a car dealer.”  So many things can go wrong from the time a prospect sets foot on the lot to the time they roll off in their new car. Many deals fall apart during one fatal stage, the uncomfortable transition to F&I.  During this time period many prospects are likely to change their mind.