The market is calling Beepi, Vroom and the Carvanna’s of the world ‘Disruptors.’ I simply call them evolutionary companies that will assist in gaining consumer trust and confidence with the car buying experience — and ultimately with dealerships.
Today’s technology has made it a snap to buy most goods online and this has conditioned consumers to expect ease, transparency and speed with all their transactions – this is the way they (and I) prefer to do business. As a result, consumers are rewarding dealers and technologies that create a better car buying experience.
Maybe it is time for us to pause and look in the mirror. To examine just what these ‘disrupters’ are doing that dealers can’t. The answer is: Nothing! Dealers have the ability to offer every convenience these disrupters are offering — and much more.
Let’s take a look at a couple of quick and easy examples:
1) Home Delivery: All of these services – Beepi, Vroom, and Carvana – have home delivery. Many dealers, however, shy away from offering this for several reasons. First, in many states, contracts executed within a residence have a 3-day right to cancel the contract. And secondly, it’s much more difficult to close a higher pencil, or sell accessories and other back-end products, if the customer isn’t physically present.
However, we all know that if we sign at the customer’s home or place of business, and if that customer came back in 2 days, or even 2 hours for that matter, to return the car, most of us would take the car back. With the power of CSI, review sites, social media and the reach of consumers today, most of us understand this. And. Let’s not forget that Beepi, Vroom and Carvana allow a full ten days! The fact is that according to recent studies, this IS what customers want.
Then there is the fear of losing margin. It’s easier to hold margin when the customer is in front of the finance manager. I would have to agree with that (being in retail 35 years). But, I am told that is simply not the case. WE have dealers doing home delivery and their backend is not affected. We must learn new ways to use simple technology to simplify the consumer experience and increase their pleasure, while reducing their pain. Dealers I work with tell me that after a deal is finalized, a simple email link with all the accessories available for that model works well. Then a finance manager simply does a join.me screen share and makes his/her presentation, prints the paperwork and the salesperson is off to the customer’s home to collect a wonderful review and CSI score.
So, why not offer home delivery and a 3 day right to cancel right up front? Sure, with some manufacturers you may not be able to RDR that sale for 3 days. But, in the grand scheme of things, that’s a far better consequence than having the consumer run all over your social media properties with vengeance on their mind. At my former dealership, we offered a 3 day right to return the car and it worked wonderfully. The marketing statement was worth so much more than the 1 or 2 customers that took advantage every quarter. The fact is, very few people ever took us up on it. It may sound scary, but in reality the marketing words “3 day money back guarantee,” is so much stronger. And, sooner or later you will probably be doing it anyways, to stay competitive.
2) Off-Site Test Drive: Another differentiator that consumers want, but many dealerships hesitate to offer, is an off-site test drive. It’s always about “get them in.” When it should be, “let’s make it as easy as possible for the customer to do business with us.”
In fact, pulling someone from the floor and sending them with a vehicle for the customer to test drive accomplishes many things – it leads you closer to selling a car – it says so much to the customer about your dealership and it may separate you from your competition.
When I was a salesperson, I was very successful, and one of my secrets was that I always offered to take the car to the customer for the test drive. That person who won’t commit to an appointment because of work or busy schedules may very well be willing to let you bring the car to them – and they’d probably be very impressed and appreciative. Who would you want to buy your next car from – the dealership that’s all about “when can you come in?” or the dealership that went out of their way to bring the vehicle to you to test drive?
Being in retail, I understand that change can be difficult. But, evolution in our industry is exciting. To thrive in today’s business climate I believe dealerships need to focus on being as consumer friendly as possible. Make it easy for people to buy cars from you. That is the unique selling proposition that the disrupters market. If you follow suit and adopt practices that make it just as easy for consumers, the marketing message of these disrupters won’t have much power any more. We have many more dealerships than there are disrupters. We also have the power of brick, mortar and service. And the fact is, the consumer still wants to walk our lots and enjoy the excitement of all the new car smell, colors, shapes and sizes. Those disruptors that deliver only one car for a test drive just can’t compete with that.
Author: Joe Orr
Joe Orr, former General Manager of Dick Hannah Honda, and automotive retail veteran of 35 years, entrepreneur and visionary. Left a 25 year job to take Online Deal Creation coast to coast as CEO of Virtual Deal. Joe is always on the forefront of new technology and is a driving force in progressive digital initiatives and a strong advocate for winning dealership solutions of all flavors. He will tell it straight and in dealer talk.