As we flipped the calendar into 2017 this month, it was time for New Year’s resolutions once again. Maybe this year you’re planning to finally buy that gym membership or cut out fatty foods. Or maybe you’ve resolved to step up your game at work and improve your close percentage.
These are all noble goals … but I bet that in a couple of months, most of us will have slid back into our old habits.
However, there’s one resolution you can make this year that will be easy to stick to.
That’s because making this change will drive results that are too good to pass up. And that change is to increase your certified pre-owned sales in 2017.
CPO sales soared to another record high in 2016, and dealers at every level can find ways to get their numbers even higher this year. If you haven’t embraced a CPO strategy yet, now’s the time to get started.
If your CPO sales are sluggish or labor-intensive, now’s the time to get your program off the ground. If you’re already in the running for CPO Dealer of the Year, now’s the time to take your business to the next level.
But why CPO — and why now? The benefits of resolving to increase CPO sales are too numerous to list, but here are six to start.
1. CPO builds consumer trust
Consumers know that when they choose CPO, they’re choosing a vehicle they can rely on. That’s because CPO vehicles are held to a much higher standard than typical used vehicles. They’re inspected and repaired until they’re brought to like-new condition. And by completing and documenting the repairs, you can dramatically improve customers’ perception of your dealership.
When consumers see you’re willing to put in the time and effort to care for these vehicles, they’ll know you put their needs first — which increases trust and transactional satisfaction.
2. CPO provides peace-of-mind
For an overwhelming majority of consumers, CPO vehicles are an attractive option. According to a recent Autotrader consumer survey, 82 percent of used-vehicle shoppers felt favorably about CPO.
The reason? Today’s shoppers are risk-averse. They don’t want to purchase a vehicle they can’t rely on, or one that might break down at any moment. Choosing a CPO vehicle helps consumers avoid that risk.
No surprise, then, that 64 percent of CPO consumers list peace-of-mind among their top deciding factors. What might surprise you, though, is that shoppers are willing to pay a sizable premium for that peace of mind. $2,714 more per vehicle, to be exact!
3. CPO ensures financial security
Although no one wants to think about the worst-case scenario with their vehicles, today’s consumers could be one catastrophic incident away from financial hardship. According to a recent survey from Bankrate.com, 63 percent of Americans don’t have enough savings to pay for a $500 or $1,000 emergency. In other words, if the average American experiences car failure, paying for repairs will be a major challenge.
Consumers are looking for ways to stay financially secure in case of an emergency. And CPO vehicles’ extended service coverage delivers that security — a major selling point.
4. CPO directly affects consumer loyalty
Want to increase repeat sales and consumer loyalty? The key is improving how consumers feel about your dealership. And offering CPO vehicles is one of the best ways to improve their perception. Cox Automotive’s 2016 CPO Study reports that 93 percent of CPO consumers were very or extremely satisfied with their vehicle.
And that level of satisfaction translated into increased loyalty. Seventy-eight percent were likely to repurchase from the same brand, and 69 percent were likely to repurchase from the same dealership. CPO vehicles won’t just help you close the sale today — they’ll help you earn repeat sales tomorrow, too.
5. CPO warranties are difference-makers
One of the biggest differentiators of CPO vehicles is the addition of a warranty. These warranties give consumers peace-of-mind that a repair facility or licensed mechanic has inspected the vehicle and brought it up to minimum standards. This improves consumers’ confidence in their vehicle purchase.
That’s why, after make and model, the warranty is the most important feature for today’s consumers. Fifty-seven of used-vehicle shoppers end up choosing a CPO vehicle because of its warranty. So use this key differentiator to your full advantage!
6. CPO is where your consumers are!
The CPO market is big, and it’s getting bigger every day. It’s estimated that 3 million consumers are currently interested in CPO. And with around 3 million more vehicles coming off-lease in 2016, the CPO market could be as large as 5.2 million consumers by 2020. That’s 5.2 million reasons CPO should be a cornerstone of your dealership’s strategy.
Because consumer demand for CPO vehicles is so high, it creates a major opportunity for you to increase your profit margin on used vehicles — all while improving consumer satisfaction and loyalty.
There are countless reasons why stepping up your dealership’s CPO focus in 2017 is a smart idea. CPO vehicles offer unique value to consumers, and overall demand has never been higher. Making these compelling vehicles a bigger part of your overall strategy will help you deliver more value to consumers, while improving your profit margin on every vehicle.
So resolve to boost your CPO sales numbers in 2017 — because this resolution is worth sticking to!
Rob Christman is a 15-year veteran of the auto industry and has worked for top brands such as Autotrader and Kelley Blue Book in both corporate product development and field sales positions. Rob has presented at many industry conferences, most recently at the 2016 Used Car Week CPO Forum.