The automotive industry is certainly at an excited time in history, as we watch technology re-engineer profitable dealer models. While its been said that “the car business is changing” repeatedly over the past generations, at no time in history as the business of selling and repairing cars experienced such accelerated change. I heard a saying once, “When people are confused, … they do nothing.” Many of the independent dealers I speak to on a daily basis are uncertain how to take advantage of the evolving models caused by tech. This gives rise to serious consideration how cars are sold. Customers are changing the buying experience and they want convenience and transparency. Below are two key drivers are not easily implemented into the dealer model of yesteryear.
A strong majority of dealerships across the country still employ a commissioned sales staff. How they are paid, what they do and how they do it are, for the most part, still following the footsteps of the traditional sales process. That is not a bad thing, to many, its all they know. In fact, in some of my core executive sales training workshops, we still rehearse and review elements of the traditional road to the sale. However, if you watch customer behavior, we already know they do not want to participate in the traditional process and are using technology to avoid it; and in fact, cut out a new path of buying cars. Not only that, but when customers arrive at the lot, many have progressed through the first several steps of a sale. The days of a sales person “wondering around the lot”, dragging tired prospects around to select a vehicle are depleting. Customers are researching vehicles online, comparing prices and options and reading reviews on not only the vehicles, but the dealerships. Social media is having an impact where customers decide to buy. Traditionally, sales professionals, their pay plans, training, personalities and much more have consumed the resources of the dealership. In today’s climate, and continuing in the near future, strong customer service representatives may provide competing value to the dealership. Customers are offering signals they prefer the customer service rep over the super-slick, “Dale Carnage”, commissioned sales person. Customer service positions can be structured on an hourly rate, perhaps with incentives that are short term and change at frequent intervals at the needs of the dealership. This change in pay structure can free up relief and result in higher profitability. Simple training on how to greet a customer, how to demo a vehicle and/or how to field a phone call can be deployed that is light, customer focused and less sales-y. The idea of providing customer service reps offers dealers an opportunity to align with the changing demands of today’s buyers. This staff structure still has sales and finance managers finalizing loans arrangements, backend products, final numbers and paperwork/delivery.
Technology is creating a vacuum in another position in the dealership. It is a position many are afraid to staff and typically don’t. That is a digital marketing manager. Yes, a lot of digital marketing today is free through social media, but even third party digital marketing requires maintenance. Dealers struggle to accurately track ROI on advertising. How many people are coming in and buying cars from the digital efforts your dealership is utilizing. Just a few weeks ago, in a 20 Group, a dealer just cut back from a $20,000/month in advertising on Google Ad Words alone. Where is that money going, what is it producing? How much investment could be saved and allocated to marketing that is really working with a qualified staff member who was charged with a digital marketing plan including social media efforts and perhaps CRM analytics. This position not only manages the third party relationships and content but also measures what was working and what was not working. There is certainly a shortage of digital marketing experts with experience in automotive sales, however those dealers who are tasking a marketing manager with results are saving a ton of wasted dollars in advertising expense and doubling down on the efforts that are working. They are also positioned to exploit new technologies as they are released and test effectiveness. For example, at the time I am writing this article, Facebook is conducting a closed beta test, soon to be released, of a messenger chat-bot app that is no cost. This development could make a substantial change in chat service as we know it, … and its free.
The future is bright, but it must be embraced. Do not allow confusion to cause your team to stand on the side-line and watch this evolution transact.
If you would like more information on Facebook’s chat bot option through messenger, or if you are interested in learning more about a retail 20 Group, write me at firstname.lastname@example.org.