In the competitive landscape of automotive sales, car dealerships are constantly seeking innovative ways to enhance profitability and improve customer satisfaction. One often-overlooked avenue is the post-purchase VSC sales process. This strategy not only generates additional VSC revenue but also drives vehicle sales, trade-ins, and service visits. Here’s how this multifaceted approach can be a game-changer for your dealership(s).
Enhancing Customer Trust and Satisfaction
The car buying process is often overwhelming for consumers. Most F&I departments offer their customers a menu of protection products, which customers often decline. This is especially true for cash deals where the cost of the products cannot be spread over long vehicle financing terms.
In addition, at time of sale, many drivers do not know how long they will own their vehicles. Initially, a customer perceives the newly purchased vehicle to be reliable. However, that perception of reliability diminishes as the vehicle ages or unexpected issues arise. When the factory warranty covers these repairs, the true cost is relatively unknown. By bringing awareness to these potential expenses and providing a way for customers to avoid the stress of those future costs, dealerships get a win-win scenario.
- Peace of Mind: Customers feel more secure knowing they are protected from the cost of unexpected repairs. This assurance can lead to higher satisfaction and positive word-of-mouth referrals.
- Relationship Building: Offering a VSC further down the road of ownership shows the dealership's commitment to the customer’s long-term experience. This builds loyalty and brings opportunities for repeat business.
Driving Vehicle Sales
Post-purchase or renewal VSC offers can be a strategic tool for boosting vehicle sales.
How? Awareness
Most drivers don’t keep track of when their vehicle's warranty will expire. A reminder forces them to make one of three decisions:
- Keep the vehicle out-of-warranty and risk expensive out-of-pocket repair costs.
- Replace the vehicle with a newer one that may still be under warranty.
- Purchase a VSC to protect against future unknown repair costs.
Encouraging Trade-Ins
Reminding your customers about their potential exposure to repair costs incentivizes them to trade in their vehicles sooner, contributing to a high-quality source of inventory and the associated profits for your dealership(s).
Increased Revenue Streams
The financial benefits of post-purchase VSC sales are substantial:
- Sales/Trade Revenue: You’ll sell more cars and get more trade-ins from customers who service with you.
- VSC Commission: Each warranty sold contributes directly to the dealership’s bottom line.
- Service Revenue: Customers who purchased VSCs are very likely to come to the dealership for covered repairs. However, they are also more likely to use that dealership for routine maintenance. Even customers who defected or who neglected servicing often return for service just from being reminded of their warranty status.
Conclusion
The post-purchase VSC sales process is a powerful tool for car dealers looking to enhance their operations. By focusing on customer trust, driving vehicle sales, encouraging trade-ins, increasing revenue, and boosting service visits, dealerships can add a new profit dimension and strengthen their business model.
In an ever-evolving automotive market, embracing this approach can set forward-thinking dealers apart from their competitors.
With Expert Warranty Services as your partner, we will build and manage a customized outreach and sales plan to maximize these outcomes...all at no cost to you. What are you waiting for?
