Monday, Feb. 06, 2017, 04:48 PM UPDATED 4:54 PMBy Rob Christman
I brought in the new year in Athens, Greece. How spectacular seeing the fireworks display over ancient Acropolis and Parthenon.
While there, I also took in the flavor of modern-day Athens. The roads, buildings and storefronts which mix in modern and historic elements. Many things we don’t see in the USA, such as European brand autos; Skoda, Peugeot and Citroen running the roads. Mercedes taxis. And a terrible economy.
Cars of all sorts packed the overcrowded roads.
When I spoke with locals about the automotive economy and process, I was shown systems that work for the very small spaces that they call showrooms. Other than display vehicles, they keep no inventory at the showroom locations.
Vehicles are stored in facilities an hour or more away from downtowns, yet the Athenians still are buying vehicles. Delivery times are two or more days. In other words, Greece is using a highly efficient system given the limitations of space and leveraging the culture and pace of Europe.
Now, things home are quite different. We haven’t had consumers patient enough to wait days or weeks for delivery of their new or used vehicles since the 1980s.
We’ve created a culture of better, faster and more efficient and now have to manage, leverage and conquer what we’ve created.
How can we best leverage American’s expectations and be most efficient to make 2017 your most profitable year? The answers are to understand consumer thinking, wants and desires, then feed them what they want.
Here are some strategies to increase efficiencies and profits for 2017.
Sell the experience
The millennial consumer is looking to connect and identify with your dealership’s online presence, with your dealership and with you. They crave content online, they demand technology in their vehicles and they must trust you.
Today’s buyer expects high levels of engagement from companies they do business with, and that engagement needs to span physical and digital channels.
Increase operational experience and the in-store consumer experience
Dealers create important experiences for car shoppers every time those shoppers come into contact with the dealership — whether shoppers are online looking at inventory, reading a customer review, walking onto your lot, or interacting with sales personnel. In all scenarios, shoppers are demanding a better experience and are bypassing dealers who don’t deliver it.
In fact, car buyers are considering fewer dealerships today than they were 10 or even two years ago.
A recent Autotrader study shows that more than half of auto buyers experience frustration in the vehicle purchase process. This study further revealed that customer satisfaction is highest within the first 90 minutes at the dealership.
As the amount of time a customer spends at the dealership increases, customer satisfaction with that dealer decreases. The first sign of declining customer satisfaction occurs at the 1.5-hour mark and continues to decline significantly from that point on. Satisfaction dips below the average at the 2.5-hour mark.
Multiple personnel handoffs and a lack of adequate communication between sales representatives and sales managers throughout the vehicle sales process extended customer wait times. Making sure that your frontline sales people are well trained will reduce the amount of handoffs at each transaction. And will also free up the sales manager’s time to be more efficient.
Your sales person must be knowledgeable, skillful and have the right resources.
Also, use formal, consistent talent-management practices, such as structured recruiting processes with multiple interviews for each candidate.
The process of vehicle pricing negotiations caused re-working and process step repetition that extended customer time at the dealership. Negotiation took an average of 21 minutes and a maximum of 41 minutes, making it potentially the most time-consuming variable in the vehicle sales process. Increasing transparency on line and on lot will shorten the haggling period, increase the customer satisfaction and build higher trust from your consumer. Also, providing the ability for customers to perform administrative aspects of sales process upstream will reduce the amount of time customers spend in the dealership.
Leverage technology during the buying and contracting phases
Using a combination of paper forms and software to perform sales functions created inefficiencies that extended cycle times. By utilizing e-contracting platforms offered by companies such as F&I Express, you can integrate the contracting phase and increase efficiencies during point of sales and in receiving payment to your dealership.
As we’ve discussed in previous articles, your CRM system is hiding future sales. Either learn how to maximize queries within your CRM system to mine future sales, or outsource these tasks to a third party specializing in finding customers and marketing to them on your behalf.
Your current database of consumers are your best source of advertising. Consumers prefer to make repeat purchases from a known and trusted retailers. Make that retailer you!
Connect with consumer emotions
At the most basic level, any company can begin a structured process of learning about its customers’ emotional motivators and conducting experiments to leverage them, later scaling up from there
When a customer buys, find out why. It’s easy to do and can be tasked to either a sales manager or the F&I manager. When a customer doesn’t buy, find out why.
Make this a consistent part of every T.O. performed at your dealership.
The more you know about the why and why not of each sale, the more efficient you become at tightening up systems, process and training at your dealership.
And finally, none of my articles would be complete without stressing the importance of giving the consumer the option of purchasing a CPO vehicle!
CPO remains the fastest growing segment of auto sales. Today’s consumer wants more car for less money. And, they demand that technology and luxury are included. Oh, and did I mention that they don’t want to spend a lot of money? What better way to tie together the safety of a like new vehicle, combined with a warranty and the desired technology and the reduced rate of a used vehicle than a CPO?
With the rapidity of change and today’s consumer, the environment won’t allow you to stay as steadfast as the Parthenon! These few steps that your dealership can take now will result in a more efficient, profitable 2017.