The challenges of vehicle personalization and leasing

Posted by Insignia Group on Apr 17, 2015 8:30:00 AM

In the past few years, dealers have found that leasing has become a more popular choice for car buyers. When a customer leases, there are many advantages to both the buyer and the seller. Consumers enjoy the benefit of low payments, the ability to get a new car every few years, and latest technology and safety systems.

One of the advantages for dealers is customer retention – hopefully the consumer will come back to lease another car from the same dealership. However, the customer return rate is not as high as dealerships would like to see. The internet has made buyers more aware than ever about the car buying process. When a buyer walks into a dealership the odds are that the customer knows more about the vehicle than the sales person. We live in the information age where anything you want to know is literally a click of a button away. Due to websites like Consumer Reports, Edmunds, and Kelly Blue Book, buyers now have access to the best prices, tips on negotiating, vehicle specs, and customer reviews on both the car and the dealership. They can even build their perfect car on the manufacture website and then search for a dealership that has it available. The internet has created a lot of challenges for dealerships due to the accessibility of information. A common complaint across the market is the inability to hold gross on the vehicle. Since consumers can look at vehicle pricing across the country dealers must continually reduce pricing in order to stay competitive. So where do we make up the lost dollars? The answer is easy… vehicle personalization.

The logical answer to the loss of profit in dealerships is offering vehicle customization to each customer. Every person who has a car buys something for it at some point; it could be as insignificant as an air freshener. But EVERY customer buys something. Dealerships are finding a way to capitalize on every opportunity by offering popular items at the time of sale. These typically include a variety of products from protection items to performance to aesthetics. The first step in the process is to simply show the customer what you have available for their car.

Vehicle personalization is easy to promote on a car that someone is planning on owning for 10 years. The question dealers face with the rising number of leases is ‘how do we sell to a customer who plans on returning the car after 2 or 3 years?’ The key is to know your customer and their hot buttons.  The more you build rapport and ask questions about their life the easier it is to sell them the car and pick accessories that will fit their needs.

Ask yourself ‘what would a parent like to have in their car to make their life easier?’ Most often the answer will be protection products. A parent typically likes to equip their car with all season mats to protect the floor from spills and muddy shoes, window tinting to keep the sun from making the back seat too warm, and interior protection to make the seats stain resistant. Every detail that a sales person finds out about a customer’s life translates into an accessory.

build rapport

Protection products are incredibly important on leases. Manufactures are cracking down on what is considered normal wear and tear which results in a hefty damage bill for the customer. Best practices have shown that it is favorable for the customer to be proactive by purchasing products that will protect the car from common damages.  These products are typically body side moldings, all weather mats, splash guards, clear film, rear bumper guard, door edge guards, interior and exterior protection. When discussing the benefits of each product talk about the value of the product, how it will make their life easier, the importance of the product, and how spending a little money now will prevent a big bill in the future.

Most often dealers won’t see a customer spending an additional $1000 on a lease; but every penny counts. Selling a set of all weather mats and body side molding is typically about $300-400 which on a 36 month lease only raises the payment about $10 a month. This is less than a ticket to the movie theater, 2 lattes, or 6 bottles of coke. When it comes to leasing it is about getting a little bit on a lot of cars vs getting a lot on a few cars. Focus on protection and safety products, know your customer, and ask for the sale. If you do these things you will be successful in vehicle personalization on leases.

For more information on offering auto accessories in your dealership, contact Insignia and start selling today!

Offer personalization

 

Written by Jenny Beckstrom, Insignia Group Vehicle Personalization Expert

 

Topics: Sales Best Practices, Customer Retention, Increase Profits