How are you approaching the September plate-change?

The September plate-change ushers in the second biggest sales month of the year and a welcome opportunity for franchised car retailers to engage with customers in showrooms and online.

New car registrations for the month are on an upward trajectory, with the Society of Motor Manufacturers and Traders reporting a 21% jump last September to over 272,600 units, a welcome surge but still a long way short of pre-Covid volumes.

The debut of the 74-plate comes at a challenging time for the car retailing sector. Although new car registrations have been growing month-on-month for the last two years, we know this has been driven by the fleet sector with retail sales under pressure as consumers grapple with a challenging economic backdrop.

However, one thing’s for certain. Car retailers will be doing everything within their power to create a buzz around the new plate with attractive finance deals and added value offers to attract retail customers into showrooms.

Traditionally the plate-change also gives retailers a chance to maximise on opportunities to drive profitability into the last month of Q3, leaving them in a good place to finish the year as strongly as possible.

The importance of part exchanges

A key determining factor for all franchised retailers in September will be their approach to the influx of part exchanges from customers ready to trade-in old for new.

However, this plate-change could bring two industry trends into play: an increase in older used cars and customers expecting to spend more of their buying journey online.

Firstly, the near collapse of new vehicle sales during the pandemic, led to replacement cycles being extended as retail owners and fleets held on to cars for longer.

Shoreham Vehicle Auctions (SVA) recently highlighted it is seeing an influx of older part exchanges in the market, requiring more expensive repair work to get them forecourt ready.

In this scenario more thorough and accurate valuations are crucial. While there is undoubtedly a market for older used cars, margins should not be wiped out by repair costs.

Secondly, research by iVendi highlighted the growing value customers place on being able to get online valuations for their cars from retailers.

It found over half (56%) said they were unable to carry out an online part exchange valuation and that over a quarter (28%) of those went no further with their purchase because of that.

Part exchanges present an unrivalled opportunity to engage with car buyers online, while also sourcing desirable stock for the used car forecourt, an important consideration for Q4 planning.

It’s a win-win and we have just the solution to ensure your part exchange strategy takes advantage of these changing market conditions and consumer trends.

Remote, accurate vehicle appraisal

Our solution to the many challenges presented by part exchanges, from condition to pricing, is CitNOW Appraise.

This powerful tool enables you to increase conversions and retain more customers during their purchase journey, by delivering fast, accurate and competitive vehicle appraisals through a simple, seamless digital process.

We’ve digitised the remote vehicle appraisal experience, which has delivered time savings for customers and retailers, resulting in fast, accurate and competitive part exchange valuations.

This appraisal tool, conveniently accessed through a browser, simplifies the part exchange process and helps retailers to grow their used vehicle stock inventory.

With no account creation or app download required, your customers can simply submit video footage and photos online which you can review remotely – saving you time and money.

You can then provide fast, accurate, no hassle, first time valuations, avoiding the need for any awkward customer conversations.

We know this service resonates with customers but don’t take our word for it. This is what Martin Rowley, General Sales Manager of Porsche High Wycombe had to say about how his business has benefitted from CitNOW Appraise.

“Conversion rates based on customers using the tool themselves is well over 60%. It is a great tool – our clients trust us at the early stage of our communication.

“It helps build our customer confidence about our own processes and the high standards we hold when preparing our own vehicles,” he said.

Engaging customers early on

Our most recent showroom analysis of new car sales data identified a year-on-year drop in enquiries and orders, a worrying trend which, with the challenges currently facing the retail market, could persist into the September plate-change.

All the more reason to ensure you have the best possible digital assets on your website, as these will increase the number of views and enquiries for new cars as well increase conversion.

CitNOW Imaging addresses the main challenges associated with the creation and deployment of digital vehicle assets: quality, time to web and cost.

This powerful app-based tool empowers retailers to create consistent, professional-grade imagery and video.

With its AI-powered quality control and real-time guidance on image-taking, it helps retailers adhere to OEM and group standards, while stock feed integrations and APIs allow you to leverage content seamlessly into quick, consistent, online listings.

With CitNOW Imaging, retailers can capture and deliver high quality, consistent images – super fast, as well as attract potential buyers with fully automated, engaging dynamic video content which is complimented with live vehicle data.

The result is a reduction in the amount of unadvertised stock and days in stock, decreased time to web and showroom sales teams benefit from a more efficient overall solution to marketing new cars

Discover more about how CitNOW Appraise can supercharge your part exchange process and how CitNOW Imaging can deliver speed to web for your new car stock.

Returning customers 26% more likely to convert

We wanted to look at our data set in a different way this month and try to answer a question that is so often assumed, that returning customers convert better.

To answer this question, we completed an analysis of nearly 3 million sales leads over the past 12 months and categorised these leads by “Known” and “Unknown” customers, e.g. has the lead been generated from a customer that is already known to that retailer.

The results of this analysis showed that “Unknown” customer leads converted from Lead to Order at an average of 25.07% but leads generated from “Known” customers converted on average at 31.61%, a 26% improvement when compared to the Unknown customer leads.

Other influencing factors

In today’s omni channel environment customers have one thing above all else, choice. Used Vehicle Locators and Market Places are full of available stock and are only a few clicks away from a customer tempted to purchase a new vehicle.

So, what can retailers do to make sure customer keep on purchasing from them?

The core of this comes back to stock strategy and are you as a retailer purchasing the right vehicles that are in demand and are they being presented to customers as effectively as possible.

Stock analysis and Stock Pricing solutions allows retailers to review the rating or desirability of their stock in a single view, our data shows that vehicle stock that is highly rated not only sells faster, but generates better GPPU as well.

Using the AutoTrader Retail rating as an example, stock rated at <20 (Low Demand) takes on average 73.3 days to sell and generates an average GPPU of £782, stock rated >80 (high demand) sells on average in 36.8 days and generates on average £1374 in GPPU.

John Law, Executive Director, CitNOW Insights commented “Being able to understand the makeup of your stock mix in this way is a win, win. Retailers can see what stock is desirable and which isn’t, influencing future stock purchasing, retailers can then sell these vehicles faster and at an improved price point as a result.”

Aftersales impact on retention

Being able to present these used cars back to your customers at key times is another major factor and is where having a strong aftersales retention policy in place is key to frequent touch points and marketing opportunities with customers.

John Law continued “Key factors that influence buying decisions from consumers is professionalism, trust and transparency. Customers that have these positive experiences in the aftersales team after purchasing a vehicle from you, we believe would make them more likely to buy from that retailer again in the future.”

As part of our analysis, we wanted to look at what can influence this further.

Firstly, use of video in aftersales work, today on average 49.9% of all eVHCs includes a video of the vehicle provided by the technician, in our previous analysis we have shown that Red eVHC work that includes video converts on average 11% better than those without. This shows that where customers are provided with the right information in a clear and transparent way they will purchase from the retailer as they trust the information being provided.

Service plans and retention products are also a great way to build trust with customer, being able to freeze service costs for the life of the plan is a huge win for the customer, especially in today’s financial landscape. However, today it is estimated that on average only 1 in 4 customers are offered a service plan quote, a simple change such as a setting a KPI that every customer is given a service plan quote either at the point of vehicle sale or service would massively help to increase long term customer retention.

John Law, commented “Being able to provide a range of technology solutions such as video, or retention packages that help customers spread the cost are great ways to keep customers coming back to your retailer, these combined with proactive stocking strategies we believe would help retailers to see more of these higher converting “known” customers and as a result help to drive improved profit and efficiencies in sales teams.”

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