The following article is based on Jordan Kite's presentation at the 2017 Dealership Minds Summit. To watch the presentation, click here.
With remarketing being the theme of the summit, over 25 representatives from dealerships across the country met for a 60-minute roundtable discussion on maximizing the efficiency and profitability of reconditioned equipment in stores.
Dominating the discussion were two clear-cut strategies regarding the marketing of reconditioned used equipment, putting into consideration the costs of service and transportation for machines.
Upselling & Repeat Business
A full reconditioning investment for a used machine up-front makes return on investment an uphill battle, one dealer representative warns. Instead, he recommends holding off in order to price it competitively in the marketplace, elevating the chance to garner interest and calls on the offer.
From there, dealerships can upsell the machine through the preliminary inspections. But without generating the original interest, he points out, recuperating any money is highly unlikely.
“If you present the machine as is and then upsell it for reconditioning being done, then you’re able to build that reconditioning into the selling price, especially if the customer needs that machine right away,” he says.
The built-in reconditioning price, he explains, can be presented as a form of store credit, giving the customer a valid reason to return later in the season to use that credit as a “gift card.”
“In doing so, you’re improving the ‘stickiness’ of that customer as he will obviously come back to you,” he says. “It gives your dealership a chance to recoup some of that margin money through extra parts and service because he’s going to come back to you for those things.”
Location, Location, Location
While opinions will differ on the best way to showcase used equipment, one dealer representative adamantly defended the strategy of compiling all of the dealership’s reconditioned machinery to one location, noting the advantages extend beyond organizational improvement.
In doing so, he says customers have more assurance they are picking the best option, while salespeople have more knowledge of each product, giving them the confidence to close more deals.
“We’ve found it’s easer for a salesman to bring customers to one spot and have all of your pickers right there vs. having him go to 8 different stores,” he says. “Our business is about 50-50 large ag to small ag, so we bring all of our large ag equipment to one location where the customer and salesperson can come and see everything on hand,” he says.
