Win More Quotes: Dealer Best Practices
By Mike McFall, President, JDJS Consulting
This article explores several best practices recommended to dealers looking to boost their fixed operations profitability and win more quotes. This article is adapted from the November/December 2019 Fixed Ops Magazine.
What’s the best way to win more quotes on marketplace and pricing platforms like PartsTrader or PartsTrader integrated with OE Connection? While there’s no single secret, managers like Brit Willcox, Wholesale Manager at Nally Honda, believe that it’s critical to have the right tools and the right process to respond to every opportunity. “We are working on several platforms and we try to return a true quote with a full pricing and delivery information to 90% or higher across the board depending on volume and order complexity,” says Wilcox. “And we focus on making sure we have the right match and identify any OEM manufacturer rebates or pricing support.”
Other managers agree. In a recent survey, parts managers were asked about what makes their dealership successful in online sales. They reported that creative pricing methods, properly incentivizing managers and willingness to explore new technologies are key competitive advantages in winning more quotes.
Adjust Prices Often to Win More Quotes
When working with online platforms, it’s a given that the right price is important to winning more quotes. But dealerships need to look beyond available manufacturer pricing support and/or conquest pricing. The overwhelming majority of dealers surveyed, about 86%, vary their price to match local conditions or they expand their market. In doing so, they offer competitive conquest style pricing on more parts even without the manufacturer support programs. These dealers report win rates that are 30% higher when compared to dealers sticking with fixed prices.
Best Practice: Pricing flexibility is key to winning in a transparent marketplace and it’s critical to capitalizing on the dynamic prices and incentives offered by OEM’s.
Use Price to Achieve Business Goals
If variable pricing is critical, then what are the factors that should drive price change? According to the survey, most dealers use price to gain market share or grow sales in a new territory.
Further down on the list are factors like time of year, the need to reduce high inventory levels, and whether they are responding to an existing customer or a potential “new” or latent customer.
OEM wholesale price changes landed in the middle of this list. With the growing importance of dynamic pricing in the industry, this result is somewhat surprising and may truly be low because only a few OEM’s currently follow this practice.
Best Practice: Maintaining an active pricing strategy allows dealers more opportunity to grow sales with the existing customer base and is an effective tool to be used when entering new markets.
Reward the Right Outcomes
Nothing drives personal behavior and dealership success better than a compelling pay plan. So, it’s not surprising that more than 90% of dealers offer some type of performance-based manager incentive.
By far, the most common plan noted in the survey is based on department profitability. This is likely because other store departments are paid in the same way. But, dealers with this plan only experience average win rates. Other less popular incentive plans like payment on sales growth or payment on sales volume have slightly better win rates. These may also be combined with short term bonus programs and other incentives.
Best Practice: Explore variety in pay plans or offering special incentives because what works in other dealership departments may not be the best option for selling more parts.
Embrace New Technologies
Almost all dealers are satisfied with the current process of quoting prices manually. But Jay Mahoney, Parts Manager at DARCARS, says, “We take a blended approach, entering enough data to help customers by verifying order accuracy and we use tools like Auto PartsBridge to stay competitive.” There is growing industry awareness of new technologies and the opportunity to improve quote processes and win more quotes. Technology that would improve parts inventory match and pricing, including pull through on rebates, would reduce workload and improve platform engagement.
In the survey, 38% of managers indicated that they would consider using software programs that improved quote response rates. Interestingly, these dealers also had win rates slightly below average and might benefit from an improved quote process. “We are quoting on several systems at the same time,” says Wilcox. “It would be great to improve some of the pricing and inventory match.”
Software services continue to evolve. Programs like CollisionLink, Auto PartsBridge, DMS Link, and other OEM recommended programs offer some dealers a way to match parts and price among separate databases. On the horizon, systems like OnPart may someday offer automated quoting solutions that are fully integrated with online platforms.
New technology needs to work with the existing systems and platforms to integrate data and improve efficiency. “Online platforms bring greater transparency and have become essential to dealers who want to expand their territory,” says Dustin Whitehead, National Sales Director at PartsTrader. Their platform already integrates seamlessly with many third-party software providers. This makes it possible for dealers to quote more accurately and leverage every rebate or incentive.
Best Practice: Explore new software tools that work with existing systems to drive new sales opportunities while increasing worker productivity.
Winning more quotes through online platforms comes down to a mix of techniques that need to be customized for each situation. Be sure pricing is adjusted to meet dynamic conditions. Set prices to achieve business goals. Compensate managers based on measurable objectives and explore new technology to reduce friction and improve quote efficiency.
Mike McFall is the President of JDJS Consulting.
He has over 25 years of experience in the
automotive industry, having served on the
board of Fenix Parts and worked with dealers
at General Motors, AutoNation and Black Book
before establishing JDJS Consulting.