Advertisement feature from AutoProtect Group
Dean Connolly, Director of Strategic Partnerships
The landscape for value-added products (VAPs) has evolved significantly over the last year. At AutoProtect Group, we are proud to have been at the forefront of helping dealers adapt and thrive, led by the regulatory focus on good customer outcomes.
Traditionally, dealers offering VAPs focused on one or, at most, two products (some offered none at all). Yet there was obvious demand for these products, with consumers buying them directly online. The opportunity for dealers is to create awareness and demonstrate value which in turn highlights the genuine need to customers.
Regulation and its focus on good customer outcomes is the key. Customers see value in VAPs, but not necessarily the primary option dealers promote; this is where a broader choice works.
SMART insurance, with its potential to protect customers from any hand back charges at the end of a finance agreement is an obvious opportunity. Consumers also see real value in keeping the car looking its best during their ownership, as well as in the ability to protect its future part-exchange value.
However, SMART insurance is not the only option. Our best practice experience is to have a complete, complimentary VAP product portfolio which allows customers to choose the products that meet their needs.
Millennials increasingly dominate car buying, with Gen Z buyers hot on their heels. For these car buyers, rising inflation and interest rates are placing pressure on their daily finances, as the certainty provided by low interest and low inflation comes to an abrupt end.
These car buyers often welcome the reassurance provided by products such as extended warranties, MOT cover, and tyre and wheel insurance. However, if these products are never made available to them when they purchase a vehicle, the good outcome they might have had in the event of a claim will never materialise, and the dealer income and good customer outcome opportunities will be missed.
Our experience is that with our training/coaching support, a broader VAP product portfolio helps to see more products chosen by more people – and yes, plenty of customers do choose multiple products. This is improved further by our deep understanding of our dealers’ sales process which allows a smooth customer buying journey with products presented at the right time and in the right way.
VAPs Should Not be Hard Sell – It’s Better to Make Them Easier to Buy
We know dealers are often concerned about promoting multiple products and fear that a ‘staircase of closes’ might collapse the deal.
This is another key area where change can benefit the promotion of VAPs. Over the last year, our greatest successes have been helping dealers make it easier for customers to buy the VAPs they value and not pushing them.
Increasingly, more people are starting to buy their new or used car online. Making the product portfolio available online for customers to discover can work brilliantly, as they recognise the value for themselves. Where this is not feasible, recreate the portfolio choice in the showroom, with pricing designed to earn a little from a lot. This approach can give customers all-round protection bought from a place of trust and understanding from good product education.
If you want to discover how reimagining the value from VAPs and how a partnership approach can embed positive change, we should be talking. Contact us at ourpartners@autoprotect.net.
