Monday, Feb. 06, 2017, 04:48 PM UPDATED 10:14 AMBy Rob Christman
On New Year’s Eve, I was lucky enough to ring in 2017 in Athens, Greece. It was the trip of a lifetime: watching spectacular fireworks over the ancient Acropolis and the Parthenon, and experiencing the flavor of modern-day Athens.
But, of course, the car guy in me had one big question: What’s it like to buy a car here?
I asked a few locals about Greece’s automotive economy, and they showed me what a showroom in Athens looks like.
To my surprise, other than display vehicles, these showrooms had no inventory at all! When an Athenian buys a car, it has to be brought in from a storage facility an hour or more away — which can take more than two days.
Clearly, Greece has developed a system that works for the culture, pace and space constraints of Europe. But could you imagine selling a certified pre-owned vehicle that way in the U.S.?
We haven’t had consumers willing to wait days for their vehicle to be delivered since the 1980s! Americans have a mindset of “better, faster, more efficient,” and it’s up to dealers to develop a buying process to match.
Here’s how you can leverage American expectations to sell CPO vehicles more efficiently and make 2017 your most profitable year ever.
1. Understand what you’re selling
CPO is the fastest-growing segment of auto sales for a reason. Today’s consumers want more car for less money, and they demand that technology and luxury are included. Oh, and did I mention they don’t want to spend a lot of money?
To create an efficient path to the CPO sale, clearly convey the benefits of CPO to consumers. Remember, CPO vehicles offer the safety of a like-new vehicle, a compelling warranty, the latest technology and the reduced rate of a used vehicle. What could be more compelling than that?
2. Adapt to how consumers buy
To appeal to today’s consumers, it’s critical to use the channels and methods that resonate with them. Most consumers, millennials especially, are looking to connect and identify with your dealership online. They crave online content, and creating a useful online presence for your CPO program is necessary to earn their trust.
And a static online presence isn’t enough, either. Today’s consumers expect high levels of engagement from the companies they do business with, and that engagement should span both physical and digital channels. If you meet their needs in these areas, they’ll be primed to connect with you, streamlining the road to the sale.
3. Improve the operational experience
Whether they’re looking at your CPO inventory online, reading a consumer review, walking onto your lot or interacting with sales personnel, consumers demand a high-quality experience — and they won’t engage with dealerships that don’t deliver. In fact, today’s consumers are considering fewer dealerships than they were even two years ago.
To make sure your CPO vehicles are on consumers’ radar, it’s critical to create the smoothest operational experience possible. To do this, start by focusing on personnel.
Multiple personnel handoffs and inadequate communication between sales representatives and managers extend consumer wait times, creating a less efficient, more frustrating experience.
To reduce the number of handoffs, make sure your frontline salespeople are well trained. This will also free up more of sales managers’ time, making them more efficient. Also, be sure to hire effective salespeople in the first place! Use formal, consistent talent-management practices to find them, such as structured recruiting processes with multiple interviews per candidate.
4. Enhance the in-store consumer experience
A recent Autotrader study shows that more than half of auto buyers experience frustration during the vehicle purchase — and they grow more frustrated the longer the process takes. The first sign of declining consumer satisfaction occurs at the 1.5-hour mark, and dips below average after 2.5 hours. To improve consumer satisfaction, it’s important to account for potentially the most time-consuming variable in the sales process: negotiations.
At most dealerships, negotiations take an average of 21 minutes and a maximum of 41 minutes. The more you can shrink that time, the better. Providing more transparent CPO pricing, both online and on your lot, will reduce the need to haggle, increasing consumer satisfaction and building trust. Additionally, allowing consumers to perform administrative aspects of the sale upstream will reduce the time they spend in the dealership.
5. Make the most of technology
There’s no shortage of tools that can help you reduce inefficiencies in your dealership. For example, since using both paper forms and software to perform sales functions can extend cycle times, going wholly digital will help you move more quickly. Choose an e-contracting platform that will integrate the contracting phase, increase efficiency at the point of sale, and make it easier for your dealership to receive payment.
Technology can increase your efficiency long-term as well. As I’ve written in previous articles, your CRM is full of consumers who could be ready to buy.
Either maximize queries within your system to find and market to consumers likely to purchase CPO, or outsource these tasks to a specialized third party. This is an efficient way to increase sales, since consumers prefer to make repeat purchases from known, trusted retailers. Make that trusted retailer you!
6. Connect with consumers’ motivations
At the most basic level, any company can learn about consumers’ emotional motivators and conduct experiments to leverage them. When a consumer buys a CPO vehicle, task your sales manager or F&I manager with finding out why. And when a consumer doesn’t buy, find out why as well.
Following up with each consumer about their purchase motivations should be a consistent part of every T.O. performed at your dealership. The more you know about the “why” and the “why not” of each sale, the better you can tighten up your systems, processes and training, making your overall dealership more efficient.
As consumers expect an ever-faster and more efficient experience, you can’t afford to stay as steadfast as the Parthenon. By following these quick and easy steps, your dealership will exceed consumer expectations and enjoy a more efficient, profitable CPO program in 2017.
Editor's Note (from February 23): This is a revised version of a story that ran on February 6.