How to squeeze more revenue, profit out of your new-car sales

Are you leaving money on the table when you sell a new car?

With greater competition for fewer sales opportunities expected through 2018, sales of accessories becomes an even more important revenue – and customer experience – opportunity.

“Nearly half of all new-vehicle buyers plan to accessorize … [with] sales of accessories a nearly $40 billion market annually,” according to the Auto Accessories Trend Report from Reynolds & Reynolds. “Consumers who accessorize spend more than $200 [and] nearly a quarter spend $1,000 or more.”

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“Today’s consumers desire personalization to transform the vehicle from “a car” to “my car,” reported R&R. “That means customizing the vehicle with everything from floor mats and window tint to custom paint and remote starter systems to trim kits and interior illumination.”

But here’s the rub … “While consumers say they prefer to purchase accessories at the dealership, fewer than 5 percent do. The reason: Dealerships aren’t actively offering accessories to their buyers.”

Yet 150 dealers from 23 brands surveyed by R&R that are using process and technology to improve their results captured $59 million in accessories sales, with more than $33 million in profits, breaking down to about $350 per customer in sales and nearly $200 in profit.

Top 10 accessories by volume:

Floor mats; window tint; protection products; factory exterior; alarms, remote starts and recovery; body side moldings; step bars; factory interior; wheel accessories, and hitch and accessories.

Top 10 accessories by revenue:

Protection products; alarms, remote starts and recovery; step bars; floor mats; window tint; upholstery; body side moldings; tonneau covers and bed caps; dealer packages, and bed liners.

Top 10 accessories by profit:

Protection products; alarms, remote starts and recovery; window tint; step bars; body side moldings; upholstery; floor mats; factory exterior; dealer packages, and radar detectors.

“The personalization trend is where automotive retailers will find new opportunities,” said R&R. “Dealers who invest in the right processes and the right technology will capture the sales potential of accessories, increase dealership’s gross profit, and improve the customer experience.”

The Trend Report suggests the following accessories strategies and best practices:

  • Assigning a department champion to help monitor all aspects of the accessories business.
  • Establishing an accessories sales process and compliance standards to help ensure presentation to all customers, whether buying or servicing a vehicle.
  • Using digital tools to provide customers with an engaging accessories presentation, and manage the accessories sales process effectively and efficiently across dealership departments.
  • Offering genuine OEM and aftermarket accessories, using aftermarket items to fill in the gaps on fast-moving accessories not offered by the OEM (e.g., window tint, upholstery, etc.).
  • Taking advantage of any “wait time” after the purchase has been negotiated and financing is being arranged to allow buyers to digitally configure their vehicles with accessories.
  • Easing the financial pain for buyers by providing the upfront price of accessories and calculating their vehicle enhancements into the overall financing and monthly payment.
  • Coordinating the efforts of everyone involved in the transaction – from the salesperson to the vehicle buyer, F&I office, service and parts departments, and local restylers and distributors – to help ensure a seamless financing and accessories installation process and a consistently positive experience for each person involved in the accessories process.

“In short, the most successful dealers are rethinking their approach to selling accessories, creating a new profit center and separating themselves from the competition,” said R&R.

The only remaining question then is whether your dealership is among them.

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