The gap between order and delivery is negatively impacting revenue and profit across the UK retail automotive sector. But, is it ok to simply ignore the situation in the hope that it will go away?
From our research we have calculated what the order to delivery period means, and we want to articulate just how businesses that are not addressing this issue in a scalable way, are losing out.
As we have discussed before, the ‘problem’ of customers waiting anxiously for their new car to arrive manifests itself in a financial problem via three routes:
Missed upsell opportunities
Poor customer satisfaction scores
Deals falling out
Just looking at #1 for now, the main dealer groups not creating an engaging and exciting marketplace between order and handover are losing, collectively, an estimated £168m per year.
We’re talking about dealers missing out on selling profitable products and services ranging from sport packs to paint protection, and GAP insurance to accessories.
Interestingly, the data insights from our platform, AutoBuzz, are already showing that customers are most likely to re-engage with these kind of products and services around month two of their order to delivery wait, and accessories and service plans are top of the agenda.
This is information and, crucially, real world data that just hasn’t been available to dealers up until now.
If we base our maths on 100 dealer groups in the AM Online Top 100, and we say that on average there are 4,000 dealers (570 divisions) in that table and that each site sells on average 35 new cars per month. Then, lastly we say that the average upsell value is £250.
Here’s how we get to £168m per year:
Our research shows that 20% of customers are upsold at point of purchase
Effective communication can target and close 50% of those remaining (14 customers)
14 customers x £250 = £3,500 lost per month or £42,000 per year
4,000 retail sites in the Top 100 x £42,000
£168m lost revenue per year across the sector
In the spirit of being open and transparent, we are more than happy to apply your own dealer maths to this algorithm and work together to understand where your site, division or group is missing out and to what level.
You might be surprised.
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For more information, feel free to get in touch and discuss a demo or integration of AutoBuzz to your dealer group by clicking HERE >>
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