As chip shortages drag on, many dealers are holding out hope that relief is on the horizon. However, the latest forecasts highlight why dealers experiencing inventory shortages can’t afford to pause their sales and marketing efforts until the market stabilizes.
According to a recent report from IHS Markit, inventory constraints are forecasted to extend through at least Q3 2022, while microchip producers have cautioned shortages may extend through 2022. But despite the forecasted challenges ahead, plenty of opportunity remains for proactive dealers.
To navigate uncertainties and challenges related to production delays, inventory shortages and other various external factors, it’s critical dealership leaders take a data-driven approach to navigating their next steps in seeking vehicle inventory solutions.
In this blog post, we share 4 ways for dealers to stay ahead of 2022 inventory challenges, including:
- Proactively engaging prospective pre-order customers
- Focusing on customer loyalty
- Conquesting new opportunities
- Maximizing your service drive
Proactively Engage Pre-order Prospects
As production delays drag on, customers shopping around in your market are likely hearing all kinds of wait times from various manufacturers and dealers, emphasizing the importance of engaging buyers early in their buying journey with transparent messaging.
While delivery time has always been dependent on brand, make and model, constantly evolving challenges to the supply chain have further complicated OEM production schedules. For dealers experiencing ongoing inventory shortages, pre-orders offer a natural opportunity to engage buyers returning to market while creating a simplified process for customers.
Instead of picking from limited inventory when it’s time to buy, potentially impacting dealership loyalty and CSI scores, pre-orders enable customers to get the vehicle they want, when they need it. But to stay ahead of evolving inventory delays, it’s important to engage prospects before they start shopping around.
Consider leveraging advanced marketing technology tools that integrate with data from your dealership’s CRM, DMS and service data to identify prospective buyers preparing to return to market in the coming months, such as customers approaching the end of their payment terms or the end of their warranty.
When marketing or communicating with customers about pre-orders, transparency and convenience are critical to offering peace of mind. Look for opportunities to build trust with customers making pre-orders by crafting messaging tailored to common concerns. Ensure your BDC and sales teams can speak confidently about each vehicle’s estimated timeline, including what is currently available for pre-order.
Focus on Customer Loyalty
As inventory shortages push prospective buyers to shop around, it’s important that automotive dealers recognize customer loyalty is no longer a given – even if a customer has bought from your dealership for years.
According to IHS Markit, brand loyalty among U.S. consumers for new vehicles dropped to a six-year low in June 2021 following steady declines in April and May. With these trends undoubtedly attributed at least in part to dealer inventory shortages, IHS Markit also found body style loyalty increased by 1.1% year-over-year in June.
What does this mean at the dealership level? If a customer wants to purchase an SUV, they will – even if that means switching brands to do so.
Just like with pre-selling, to protect your customer base from competitors’ conquest efforts and prevent customer defection, dealers need to engage loyalty customers before they return to market. Leveraging advanced dealership marketing tools that integrate with your dealership’s CRM, DMS and sales platform, look for cues that customers are preparing to return to market, such as customers approaching the end of their warranty or lease. Using this combination of market analysis techniques will help to drive sales.