The next session in Dealertrack Technologies’ series of free webinars delves into how dealers can learn best practices for embracing digital retailing to keep their dealership from derailing in the face of an evolving approach to sales.
Dealertrack digital retailing expert Ali Mendiola said today’s consumers demand a seamless and transparent online to in-store experience. Mendiola emphasized that dealers who align themselves with shopper’s expectations and deliver an inefficient and satisfying experience by leveraging digital retailing technology are seeing great results including:
• Amazing lead to sale conversions
• Higher profits on deals
• Increased levels of consumer trust
• Less time spent working the deal in store
• Complete control over vehicle merchandising and pricing
The training session is set for 2 p.m. ET on Dec. 9.
During the webinar, Dealertrack plans to showcase real dealer practices and results, and conclude with a live Q & A session.
Dealers can register for the free session here.
Autotrader will be hosting its final Interactive Dealer Summit of 2015 at the beginning of December in Atlanta – if you cannot make it, a free simulcast will be available.
The event will be streaming from Atlanta on Tuesday, Dec. 15 from 9 a.m. to 3:30 p.m. EST. Register here.
What can you expect to learn about? Autotrader will be discussing the latest information from industry thought leaders on car-shopping behaviors and how it interacts with real life and the Internet world.
Autotrader’s Interactive Dealer Summits regularly include speakers from Autotrader, Cox Automotive, Haystak Digital Marketing, Kelley Blue Book, vAuto and VinSolutions.
A link to view the simulcast of the event will be provided following registration.
According to Autotrader, the Interactive Dealer Summit speakers will be discussing the following topics:
- How today's customers shop for cars
- How to improve dealer visibility in the digital marketplace
- How to reach today's consumer at every stage of their car-shopping journey
- How to build in-store processes that produce great sales results
Dealers that fail to invest in consumer-facing technologies risk being trumped by competitors.
That’s the message from J.D. Power following its 2015 U.S. Sales Satisfaction Index Study released on Thursday.
J.D. Power’s study, in its 29th year, measures customer satisfaction with the sales experience for new-vehicle shoppers — for both buyers and non-buyers — to gauge what works and what does not to keep customers satisfied.
This year, the company highlighted especially the importance of utilizing consumer-facing technologies during the car-shopping process. One example, in particular, pointed out the use of tablets.
According to J.D. Power’s study, among both premium and non-premium buyers, the use of tablets by sales personnel to perform tasks such as recording customer vehicle needs, demonstrating a vehicle’s features and displaying pricing information yielded higher customer satisfaction.
Perhaps most notably in respect to tablets, the study shows that handwritten price quotes had a negative impact on buyer satisfaction.
The study also found that F&I products, such as extended warranties, pre-paid maintenance contracts and tire/road hazard protection helped increase satisfaction to the customers that were presented with the option.
“With retail vehicle sales in the United States in 2015 forecast to reach 14.2 million units and this positive momentum expected to carry into 2016, dealers face challenges in properly servicing a high volume of new-vehicle buyers who are increasingly tech savvy,” said Chris Sutton, vice president of the automotive retail practice at J.D. Power. “Dealerships should understand that customers want and trust technology and that it can enhance efficiencies. Dealers that disregard it may risk being left behind in three to five years. Customers are experiencing interesting uses of technology in many of their other retail transactions — and now expect this in auto.”
Here are some other key findings of the study, listed by J.D. Power:
- Sales staff remain vital to sales experience: The most impactful sales satisfaction key performance indicator (KPI)—best practice—is interacting with a salesperson who understands the customer’s needs completely (+106 points). Such salespersons are good listeners, ask relevant questions and are able to deliver on customer requests. This KPI demonstrates that even with the growing prevalence of online communications and emphasis on an efficient transaction, the salesperson still plays a key role.
- 5 of top-10 KPIs relate to working out the deal: Among the most impactful KPIs are five that involve making customers feel comfortable (not pressured) and confident they are receiving the most transparent and up-front information to aid their decision-making while at the dealership. Delivering on these best practices improves satisfaction and builds loyalty and advocacy.
- Gen Y equally interested in safety and protecting vehicle value as other generations: Among generational groups, Gen Y is as likely to purchase F&I products as other generations. For example, by generation, the following proportions of customers purchase tire/road hazard protection: Gen Y (21 percent); Gen X (21 percent); Boomer (20 percent); and Pre-Boomer (20 percent).
Among brands, Porsche ranked the highest on a 1,000-point scale in customer satisfaction with a score of 752, marking a 14-point increase over last year. MINI, for the sixth-year straight, ranked highest among the mass-market brands, with a score of 762 (35 points over last year).
Want to check out the full study? Click here.
It’s a tricky balancing act dealerships play — keeping service bays running efficiently with customers’ units that generate both profit and loyalty while also reconditioning trades and other pieces of used inventory to get them prepared for the retail blacktop.
To help service department managers tackle this challenge, research and strategy firm Vennli shared what it found through its latest consumer survey while Rapid Recon discussed the impact of reducing the daily holding costs had at Ricart Automotive.
3 paths to improve the service drive
First Vennli set the stage by recapping how the firm questioned 516 vehicle owners about their choice to go to the dealership for ongoing service versus independent service centers that work on all models or specialty service centers that are focused on a certain type of service like tires or brakes. The survey generated five trends, including:
• Only 36 percent of vehicle owners go to a dealership for regular maintenance and just 22 percent go for oil changes. However, the large majority of individuals (91 percent) who get their oil changed at a dealership also get their service done there.
• The importance of choice factors was similar for people who choose to go to a dealership and those who go to an independent service center. The most important drivers of choice were quality of service, explanation of service, trust in the recommendations, expertise with make and model, speed of service, low price, and comprehensive, one-stop shop for all service.
• It was less important for vehicle owners to be able to schedule online, personally know the mechanic, have the vehicle cleaned before it was returned, or experience a great waiting area.
• Owners perceived independent service centers to be cheaper. However, they valued the specific expertise of the dealership service centers as well as the certification of mechanics, comprehensive vehicle inspection, and use of parts by a specific manufacturer.
• Individuals who go to the dealership for service believe it has higher quality of service and is equally convenient for them compared to other options. Those that go to independent service centers similarly believe it has higher quality of service but find it to be more convenient.
In light of those five findings, Vennli recommended a trio of modifications dealers could make to improve their performance in this area.
1. Redirect focus from less important items (waiting room, cleaning service) to the core drivers of customer choice.
“Customers want quick service or the option to drop off their car – they don’t want to wait while it’s serviced,” Vennli analysts said. “In fact, people who leave their car and return for service spend $3 on service for every $1 spent by a person who waits while their car is being serviced.
“Customers who wait want to get out as soon as possible and will turn down additional services,” they continued. “A possible solution is to offer a concierge service where the car is picked up and dropped off.”
2. Focus marketing communication on the specialized and comprehensive service the dealership provides.
3. Consider marketing campaign strategies to bring customers in for oil changes, knowing that most who come in for oil changes will return for regular service.
“Highlight comparable pricing for oil changes to neutralize the perceived advantage of competitors,” Vennli said.
Faster to the front line
It’s like the child waiting in line to see Santa at the mall; that time it takes to get that vehicle the dealership took as a trade or the unit that just arrived from the auction ready to be retailed.
NCM Associates notes from its 20 Group studies that daily holding cost is an average $32 per vehicle.
“Where used-car and service and parts managers aren’t aware of how holding costs add up as the recon clock ticks, they’re erasing dollars from gross on every vehicle,” Rapid Recon president Dennis McGinn said.
Dealers who speed the flow of vehicles through reconditioning to get them frontline-ready faster reduce holding cost erosion, said Jared Ricart, service operation manager at Ricart Automotive, who has reduced recon time there from 12 days to four.
“We thought we had good insight into how long it was taking us to get vehicles frontline ready, but when we turned on Rapid Recon it showed us we were at 12 days,” Ricart said. “That long process was killing gross.”
Rapid Recon time-to-market reconditioning software applies the science of workflow accountability to vehicle reconditioning.
“The issue is holding costs,” McGinn said. “Holding cost is each vehicle’s percentage of dealership overhead, which accumulates daily, from acquisition to retail. Faster time to market reduces holding costs’ margin erosion.”
Understanding how holding costs erode gross, a parts manager, for example, can better decide whether to buy a more expensive part to do the repair now versus waiting for a less expensive part that takes a day or two to arrive.
“Looking at the first seven months on Rapid Recon, we’ve retailed 5,000 used cars. By cutting down the days in service by eight days, at $32 a day per vehicle, you can do the math on the savings we’ve collected,” Ricart said.
Ricart noted the Rapid Recon process can help technicians better appreciate recon economics.
“Techs who understand recon is a production-based service work to move vehicles through inspections and repairs faster,” he said. “At Ricart, recon technicians work a three-day week, with the compressed time to earn their hours incenting them to work faster and push more vehicles through their phase of the reconditioning process.
“As a communications tool, Rapid Recon has helped everyone involved eliminate wait times and work faster toward our common time-to-market goal — and not point fingers,” Ricart went on to say.
Dealers can calculate their holding costs using Rapid Recon’s Holding Cost Calculator.
Both Allied Finance Adjusters and the American Recovery Association highlighted ways repo agencies can get involved in upcoming events.
First on Wednesday and Thursday, ARA is hosting two sessions of its monthly webinar training series. This week’s sessions are set to feature Dave Kennedy, who is the chief executive officer of First Credit Resources based in Johnstown, Pa.
Kennedy’s presentation will be focused recognizing and handling aggression.
To register for the session set for 2 p.m. ET on Wednesday, click here.
To register for the session scheduled for noon ET on Thursday, click here.
ARA reiterated that members must register online for the webinar with individual email addresses in order to receive a certificate of completion.
Meanwhile, Allied Finance Adjusters highlighted the five speakers scheduled to make presentations during its mid-year meeting on tap for Nov. 10-13 at the Golden Nugget in Las Vegas. The group includes:
— Valerie McGilvrey, Asset Management Services
— Jeff Koistinen, My Recovery System (MRS)
— Tom Lynch, KeyNET
— Tom Wentling, Executive Services Group
— Attorney Machelle Morris
Discounted hotel reservations are available by calling the Golden Nugget at (800) 634-3454 and giving AFA's group code — GSAFA11.
In light of the Consumer Financial Protection Bureau handing out a $44 million enforcement action against Westlake Financial Services for its debt collection practices, BellesLink founder Paul Kulas offered five reasons why these methods that regulators find to be non-compliant aren’t that successful anyway.
In a blog post published three days ahead of the CFPB announcing its action against Westlake, Kulas pointed out that cell phone pinging and caller ID spoofing — practices he acknowledged were once common in skip-tracing and investigations — are not only drawing the attention of the CFPB but also the Federal Communications Commission.
Besides the possibility of landing in severe regulatory trouble, Kulas noted five other reasons why these practices don’t serve collectors well, including the following:
— When spoofing, you have to keep calling until somebody answers the phone. It wastes your time.
— If you’re on the phone call and the call is dropped, the person can’t call you back.
— If the call is dropped, you can’t call them back. At least not without explaining, one more time, why you’re calling from their Mom’s phone number. So, the lead is burned.
— You can’t leave messages to get a call-back. The caller ID they see on the call-back won’t match the original call, making it suspicious and burning your lead.
— You can’t easily keep track your calls and the work you’ve done. You have to manually track your calls.
Kulas closed by stressing that BellesLink apps offer more “effective” tools for finding people, contacting targets and tracking work.
For more details, visit www.belleslink.com.
The American International Automobile Dealers Association is offering two opportunities to listen to a free webinar to explain how a vehicle that’s been in an accident can be just as valuable in inventory as any other unit.
Coming up on Oct. 20, AIADA’s AutoTalk Series presents an abbreviated 20-minute version of the award-winning presentation on maximizing used-car department opportunities with Bob Grill, senior trainer at Carfax.
AIADA officials asked, "Can an accident actually add value to a vehicle? If the customer is comfortable with the accident, why isn’t your used-car department?
“At the end of the day, there is always a right buyer for every car,” they continued. “Listen to Bob Grill address these issues and more regarding used vehicle sales opportunities and increased profits.”
Grill has held various senior management positions at one of the country’s largest publicly traded dealer groups, and has been involved with the launch and execution of several highly successful national used-car programs. Grill will share his knowledge and experience with enhancing the profitability of your used-car department by leveraging all used vehicle opportunities.
“Have your used- and new-car managers join us for this 20-minute session that is sure to increase your bottom line,” AIADA said.
There are two opportunities for dealerships to watch the free webinar on Oct. 20. For the session beginning at 10 a.m. ET, register here. For the session beginning at 4 p.m. ET, register here.
With Dealer Car Search’s new “website texting” feature for its website customers, the company aims to improve the line of online communication between customers and the dealership.
That’s according to Rick Wilson, the chief executive officer at Dealer Car Search, whose website texting solution links interested customers online directly to a salesperson in the office or on the lot.
"The bottom line is consumers only want to interact with the dealership after they have first searched the website and found the car in which they are interested,” Wilson said.
By offering access to website texting buttons on search results pages and vehicle detail pages, Wilson believes this is the best time to connect customers to the dealership as well as providing them with improved service quality.
Dealer Car Search says that customers can initiate the texting feature from desktop, tablet or smartphone using a round robin system that cycles text leads through a rotation of salespeople.
“So far the results have been astounding and many participating dealers are seeing an immediate increase in consumer engagement in the form of increased leads and sales,” Wilson said.
For more information on the solution, visit the Dealer Car Search site here.
While it may seem we’re swimming through a painfully large number of automotive recalls on a daily basis, that doesn’t change the fact that cars simply last longer, on average, than ever before.
This is reflected by the most recent U.S. vehicle registration data from IHS, which shows that the average length of vehicle ownership has hit another all-time high for both used vehicles (63 months) and new vehicles (78 months).
According to Brian Skutta, AutoAlert’s chief executive officer, how long a consumer holds onto their vehicle has a direct impact on the SAAR and is also a key performance indicator for the auto industry.
“To put this in context, the lengthening ownership lifecycle is resulting in consumers buying fewer vehicles over their lifetime, giving dealers fewer opportunities to sell them cars if you wait for them to come to you,” Skutta said.
Via an online survey of over 400 vehicle owners, AutoAlert reached out to get a better idea of where today’s customers could be swayed to get back in the market for a new or new-to-them vehicle.
Here are a few key findings of the study, according to AutoAlert:
- Seventy-five percent of consumers would be very likely or somewhat likely to trade-in their vehicle today if their monthly payment would remain about the same.
- Fourty-nine percent of survey respondents were not aware they were able to upgrade their current vehicle before their loan or lease is at end-of-term.
- Regardless of how long consumers have owned their current vehicle, 63 percent of them would like to upgrade their vehicles every three years or less.
- Dealerships that keep their service customers coming back are smart because 57 percent are very likely or somewhat likely to purchase a new car from the dealership where they service their car.
- Sixty-nine percent of consumer respondents felt it was very important or somewhat important for the place they bought their vehicle to proactively notify them when they are in a position to upgrade their vehicle if it doesn’t impact their monthly car payment.
- More than half of consumers want to be notified about key points in their ownership lifecycle (e.g. warranty is expiring, trade-in value is about to decrease rapidly, before incurring mileage overages on lease, end of contract).
- The three highest motivating factors to buy or lease a new vehicle were:
- 83 percent better fuel-efficiency
- 68 percent too many repairs to be made on current vehicle
- 65 percent additional safety features
“Dealerships find better stewardship of their customer records through data mining, empowering them to disrupt longer trade cycles down to an average of 36 months – a dramatic increase in trade-cycle velocity,” Skutta said. “This type of data-driven engagement with consumers is where dealerships are finding a great return on investment.”
According to the company, out of the more than 400 survey participants, 35 percent were millennials, 31 percent were Generation X and 34 percent were baby boomers.
To check out the full white paper of the results, click here.
If you look at the cars sold via Auction Edge, more than 93 include a photograph.
Meanwhile, roughly 63 percent include a condition report.
That gap shown in these statistics — provided during an Auction Edge presentation at the Digital Managers Session of the Auction Academy near Chicago this summer — doesn’t necessarily mean, however, that the condition report isn’t vital.
“The importance to the buyer — it’s already there,” Auction Edge senior vice president Dan Diedrich said in a follow-up interview with Auto Remarketing.
Closing the gap between the percent of cars with pictures and the percent of cars with condition reports is, “a matter of the auction having the boots on the ground to actually do the work, and for that matter, the technology to efficiently do the inspection,” Diedrich said.
“Condition reports still just take a tremendous amount of time to do properly. And there are some really good products out there to help the auctions, and even the dealers, inspect their own vehicles, but I don’t know if anybody has gotten the silver bullet yet, in terms of the right technology to really do it quickly,” he continued.
“Everybody’s trying, we’re trying, but the big limiting factor is time, when it comes to getting the inspections done on that 90 percent number. You’re going to see the gap close; I don’t think you’re ever going to see a 93 or 94 percent condition report (rate), not from most auctions,” Diedrich added.
“There are some, they’re going to do them on every single car,” he continued. “But the time factor, for your average sale, I just don’t see it getting that high. I think you’re going to see 80, 85 (percent) of vehicles having CRs in the simulcast environment.
“In the online only — the upstream or non-simulcast venues — that’s where you’re going to see a higher percentage, because you don’t’ have the bidder in the lane keeping the bidder online honest. So the condition report is absolutely needed in those upstream venues.”
A 2013 white paper from Manheim also shares just how important those CRs can be.
The report, titled Condition Report Impact on Dealer Sales, indicates that CRs tend to affect three areas, those being, “Simulcast, the ability to attract buyers and arbitration rates.”
First looking at Manheim’s Simulcast product, the white paper indicates that reach of Simulcast, on average, is impacted positively by more than 22 percentage points for vehicles with electronic condition reports than those without.
The report shows that the degree of positive impact is even larger as the price tier climbs, with cars in the $20,000-and-up ballpark having an ECR-driven reach increase of 30 percentage points.
As for buyer exposure, Manheim’s report finds that if a vehicle has a CR, the buyer’s distance to auction is 35 miles higher for an in-lane purchase and 95 miles higher for a Simulcast purchase.
Looking at arbitration, the report notes that vehicles with CRs had an arbitration rate that was 7 percentage points lower than for those without a CR. The decline in arbitration rates was most noticeable in vehicles priced below $15,000.
(Note: Manheim said its report includes one full quarter of dealer sales; it excludes Total Resource Auctions, Specialty and OVE sales; and it is limited to U.S. auctions. The white paper was released in the second half of 2013. It was based off results from the first half of 2013.)
At the company’s Manheim Pennsylvania location, general manager Julie Picard says some dealers do opt for the “image-only” route with CRs, but she does see an equal amount of importance placed on condition reports and photos.
“I wish somehow we could pipe the smell through for them,” she said with a laugh, but added, “because that’s truthfully very important, as well.”
And when asked to talk about some of the most important considerations for the online wholesale buyer, Picard honed in on the precision of the condition reports. But that goes beyond the online bidder, as she would explain.
“They definitely want to make sure that our CRs are accurate. They totally rely on that,” Picard said. “And I think Manheim has done a really good job of staying focused in that area of our business, to continually try to enhance our condition reports and really make them be representative of what the car’s condition really is. So, we continue to work on that day in and day out.
“You know, I can’t even liken that just to online any more. Our in-lane dealers will print out CRs,” she added. “They use that for their homework at night; they use it to view the condition of the car. When they walk up to a car, they want to know that it’s represented in the fashion that it was on the CR, so they can make a quick decision or whether or not to buy and move on to their next purchase.”
That’s something Pat Simmons has noticed, as well. The DAA Northwest director of technology points out that most buyers, even those who end up buying the cars at the physical auction sale, start doing their homework online.
So, it’s important for those buyers to be able to know as much as possible about the car ahead of time.
Simmons said the auction likes condition reports on all vehicles, and acknowledges the challenges of doing so, but also the benefits that make this process worthwhile.
“It’s labor-intensive. That’s certainly a challenge,” he said.
Plus, Simmons mentioned, all the logistical steps involved. However, the benefit of putting CRs on vehicles is well worth it.
Having a CR adds value to the vehicle, increases confidence in the buyer and portrays a better picture of the car, Simmons said.
“And that is worth doing,” he said.
Worth it on many levels, in fact. Not only do CRs increase confidence for dealers and help them make quicker decisions, but they can also give sellers a leg up on the competition.
That’s something that ADESA Cincinnati-Dayton general manager Geoff Parker emphasized in a Q&A with Auto Remarketing in our Aug. 1 Power 300 issue.
We asked Parker how his auction emphasize to sellers the benefits of including these on the vehicles they sell.
“As part of our commitment to providing the best possible service to our customers, including our sellers, we make it a priority to highlight and explain the benefits of including an accurate and thorough condition report with each vehicle at every opportunity,” Parker said.
“From gathering insight from our buyers, we know that dealers find important value in condition reports — they increase confidence, and they save time, because dealers know going into the auction the exact condition and details of the cars they want to purchase, making the in-lane or online decisions faster and easier,” he continued. “In today’s mobile-driven world where buyers are scouring websites and apps prior to auction day to help guide their purchasing decisions, providing complete, accurate condition reports offers sellers a competitive edge.”
