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6 Benefits of an Equity Mining Platform
Oct 6, 2023
Dealers, F&I, Training
The pandemic is more or less a thing of the past, as are the supply chain disruptions and inventory shortages that came with it, but things aren’t quite back to “normal.” The challenges and uncertainties of the last few years have forced drastic shifts in consumer brand loyalty, leaving many manufacturers and dealers with customers who have never been more nomadic in nature.
On top of that, the current economic state—with high interest rates and record-level MSRPs—means that customer loyalty should be every dealer’s primary objective, and equity mining is more relevant than ever.
The best audience to focus on right now is customers who are already part of the family and are in a good equity position. Through the power of equity mining, dealers can easily tap into their databases for new sales opportunities: On average, sales grosses on new and used vehicles are around 10% higher when working with current customers than with those where there is not a pre-established relationship.
Here are some of the ways an equity mining platform can help you focus your marketing efforts and capitalize on your owner base:
1. Bridge the Gap Between the Service Lane and the Showroom Floor
A few years ago, Jeff Bounds of Mosaic Consulting Group wrote: “The probability of selling to an existing customer is 60-70%, in contrast to a new prospect: 5-20%. The question is why are we not fully embracing this in our industry?”
Equity mining software can help you do just that. An effective platform will analyze thousands of customer data points before every service appointment, targeting the best sales and unsold VSC leads coming into the service lane. Some platforms will also identify current owners with no recent service history, allowing you to draw them back with personalized service letters and incentives.
2. Targeted Marketing Campaigns With Lower Costs and Better Results
A good equity mining platform will not generate hundreds or even dozens of leads on a daily basis. Instead, it will intelligently analyze millions of data points and isolate those owners who have the highest probability of repurchasing from you.
The result is a handful of qualified leads that can be reached out to via personalized first-class letter campaigns, social media posts, e-campaigns and automated phone messaging. On top of that, it can reduce marketing costs to as low as $180 per customer.
3. F&I Product Sales
J.D. Power released a recent study showing that the current average trade-in equity is over $9,100 for those in a positive equity position. According to Dealer Wizard, iA American’s Dealers’ Choice Award-winning equity mining platform, of those with positive equity, 42% purchased a vehicle service contract when trading in their vehicle. Conversely, only 25% of consumers with negative equity purchased a VSC. These data points further validate the necessity to place more emphasis on reengaging and reselling current customers to drive incremental sales volume, F&I product sales and gross profit.
4. Lucrative Source of Quality Pre-Owned Vehicles
Taking initiative by targeting customers via equity mining leads to higher grosses on each sale and saving on acquisition costs—which ultimately saves you the time, money, and headache of having to go to auction.
You can take advantage of an equity mining tool to leverage your dealership’s used car trends, as well. This helps identify the vehicles your dealership needs on your lot, as well as the vehicles you need help pushing off your lot. By utilizing these data points, you can define the exact criteria for your marketing needs.
5. Data in the Palm of Your Hand
Some equity mining tools out there will provide a convenient mobile app. This allows you to extend your showroom floor to connect with customers wherever you are. It conducts instant appraisals, generates instant equity analysis, and provides next vehicle purchase recommendations and financing options – all in the palm of your hand.
6. Seamlessly Integrated With CRM Platforms
Most equity mining tools are integrated with all major CRM platforms, making program adoption simple and allowing dealership management to push all service drive equity leads directly into the CRM.
7. Performance Metrics
As an extension of your sales team, allow your equity mining tool to go one step further with analysis of overall dealership performance. This capability allows you to monitor and assess KPI metrics, drill down into employee performance, and identify areas for growth.
The strongest grosses tend to come from those who have purchased from you before and receive service from your dealership. Using an equity mining tool to help with that can reduce dealer pain points and make it that much easier.
Dealers who optimize their entire dealership operation and cultivate their owner base through equity mining are going to be better positioned to compete in today’s marketplace.
Test Drive an Equity Mining Platform
DealerWizard does all this and more. Click here to schedule a demo of the DealerWizard equity mining platform.