Turn Rates Spike to an 8-Year High
Days to turn reached 70 in the first 19 days of March 2017—the highest level for any month since July 2009, according to a report from J.D. Power and LMC Automotive. This is causing dealers nationwide to search for new ways to decrease turn, but some of our dealers have already uncovered a crucial weapon in the battle against surging turn rates. These GM dealers are enjoying a 34 days-to-sale average for their vehicles enrolled in our mannequin vehicle program.
That's 49% speedier than the national turn rate, and these dealers are simply participating in a free incentive program that rewards dealers who build and display mannequin vehicles in their dealership.
What Is a Mannequin Vehicle?
At its core, a mannequin vehicle is simply an unsold unit with accessories pre-installed on it. They are most effective when placed in the showroom or in a prime exterior location, and use decals to call attention to the accessories. They utilize the same marketing principles as the life-size dolls retail shops use to display clothing.
Similar to a retail apparel mannequin, the vehicle is used to highlight the unique merchandise in a store, attract customers inside, and upsell the customer. These three combine to generate extra revenue and increase profit, while also positively contributing to a dealer's monthly objectives.
A Pattern of Success
VIP ADI offers the Mannequin Vehicle Program to all of its regional dealers, incentivizing the sales teams while consulting management to maximize the dealership's mannequin effectiveness. We see a clear pattern with the dealers engaged in this program—they are exceeding their monthly objectives.
83% of Dealers actively participating in the Mannequin Program during February 2017 finished over 100% to their Accessories objective at the end of the month.
So are these dealers more successful, in part, because of their participation in the Mannequin Program, or are successful dealers just more likely to capitalize on the sales opportunities offered to them?
Just look at the numbers:
Lou Fusz Chevrolet in St. Peters, MO currently leads the program in mannequins sold, at 13, with a 24.77 days-to-sale average, and $37,900 accessories sold at retail.
- Weber Chevrolet in Creve Coeur, MO leads in total accessories retail at $41,354, 8 mannequins sold, and 32.63 days-to-sale average.
What can't be measured are the additional accessory and vehicle sales generated by having a properly mannequins at your dealership.
Building Targeted Beacons
Mannequin vehicles also serve as powerful marketing tools for your dealership. They give your potential customers another reason to choose your dealership over the guy down the street. You win the customer's time and attention when you show them that you are different AND have something special to offer.
When they see the vehicle preloaded to look or function in the way they desire, they are far more apt to visit your store and close the deal. It's the same reason accessorized pre-owned vehicles tend to sell more quickly. An accessorized vehicle has a personality beyond what the manufacturer crafted, this gives you the ability to further target specific demographics and customer types beyond what you're already doing.
You can also increase accessory sales in places you don't expect. Often customers aren't exposed to accessories during the purchasing process, but a mannequin in the showroom exposes the customer to that portion of the business. This can start the conversation with the customer, and it's a natural way to spark the dialogue.
With all the added revenue and profit potential, it's easy to see why mannequin vehicles are the choice way many dealers are combatting record-high turn rates.