The accessories market is bigger than ever, but dealerships still aren't taking full advantage of it.
From fuzzy dice to satellite navigation, auto accessories are a $40 billion-a-year business — generating more revenue, by some accounts, than collision repair. Profit margins on accessories sales routinely approach 50 percent.
Half of the new-vehicle buyers say they plan to customize their purchases, industry surveys suggest. When they do — 6 million new vehicles are accessorized in the first two years of ownership — customers typically spend between $300 and $800. Truck buyers spend $1,500 on average.
Yet only about 5 percent of customers buy add-on accessories from the dealership where they purchased their vehicle, the dealer software provider Reynolds & Reynolds estimates.
As new-vehicle sales and profits stall after years of growth, franchised dealerships in the U.S. must look elsewhere to pick up the revenue slack. Dealerships and automakers have ample opportunities to increase their share of the accessories market, now dominated by aftermarket providers, and to build customer loyalty in the process.
"We've got to do a better job of selling" accessories, says Trevor Gile, managing partner of Motorcars Honda in Cleveland Heights, Ohio. "That'll be the next big movement to capture every penny."
Gile says dealerships must "get the nut cracked" of installing accessories more quickly and efficiently. He is revising his service department's processes to help accomplish that goal, Gile told Fixed Ops Journal.
Mark Seng, global aftermarket practice leader at the data analysis firm IHS Markit, says "dealerships are getting aggressive across the board" about selling accessories, "and OEMs are focusing on the aftermarket, too."
"The dealer is positioned better in the consumer's mind" than independent competitors to provide sophisticated accessories such as electronics, Seng said in an interview at last month's Specialty Equipment Market Association show in Las Vegas. But he adds that it now "takes a much greater level of expertise" to sell accessories successfully.
To capture a greater share of the aftermarket, dealerships need to offer accessories to customers as an integral part of the new-vehicle sales process, dealers, suppliers and industry consultants agree.
That means committing to adequate pay, training, equipment and support for dealership employees, including those in fixed operations, to sell accessories, industry experts say.
Among their recommendations:
Get service and parts employees involved in promoting accessories, both during the new-vehicle sales process and when owners come in for service.
Enabling vehicle buyers to talk to specialists who install accessories can provide a reassuring source of expertise.
Dealerships often "drop the ball in creating an introduction from sales to service" for new-vehicle buyers, says Gina Allen, fixed operations director of the Santa Margarita Auto Group, which operates Ford and Toyota dealerships in Rancho Santa Margarita, Calif. As a result, she says, "the conversation about accessories gets swept under the rug."
At her Toyota dealership, Allen says, the service manager is immediately notified of every new-vehicle sale, so that a service employee can discuss accessories with the buyer. The Ford store maintains a "parts boutique" that acquaints buyers with popular accessories, she adds.
Give dealership employees meaningful economic incentives to learn about and sell accessories.
A 2016 survey of 2,600 dealership general and sales managers by the industry consulting firm Carlisle & Co. found that 9 out of 10 new-vehicle dealerships sell accessories actively. Yet one-fifth of the respondents said they were not compensated for such sales, according to the report.
"If dealerships are not clever enough to incentivize their salespeople, shame on them," says Lawrence Constantin, director of Americas sales and marketing for Solar Gard, which makes window tinting and paint protection products.
Nor should incentives be limited to sales managers and employees, says Nancy Vanderbilt, president of Automotive Aftermarket Services LLC, a firm in Santa Fe, Texas, that works with dealerships to sell accessories.
"Everybody plays," Vanderbilt says. "Each department should share in accessory sales profit, because each department touches the process."
Read Full Article Here: 7 Steps To Increasing Accessories Sales
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