Gone are the days when dealerships were at the center of the transaction. Today, the process begins online and customers don’t even have to set foot into a dealership to buy a car. The new “front line” is online.
Omni-channel retailing in automotive meets the customer where they are, from online to in-store.
Here are five actions you can take to maximize your profits in today’s omni-channel world:
1) BE EASY TO FIND ONLINE
It may come as no surprise that 95% of vehicle buyers search online for information,(1) spending an average of 14.5 hours online before purchasing(2). The majority of those searches are happening on a mobile device(3). Focusing on mobile and your online inventory is key. While the dealership is important, you need to “make the car the star” – the customer is searching hundreds of different vehicles and yours needs to stand out.
Ask yourself these key questions:
- Are all my vehicles online? If they aren’t online, they aren’t for sale.
- Do my vehicles have real professional quality photos? Quality photos make a huge difference. Stock photos, no photos, or low-quality photos will turn customers away.
- Do my vehicles have full, factual descriptions? If you are missing packages and options, you are very unlikely to get a customer looking for those features to click on a vehicle or reach out. This is especially important for luxury vehicles.
- Do my vehicles have accurate prices? And make sure it matches the price when they come into the store.
When evaluating your vehicle descriptions, think like the customer. The common questions customers are looking for include:
- Is this car right for me?
- Am I buying a lemon?
- Is this a fair price?
- Why is this car better than others I’ve seen?
- Why should I buy from this dealer?
Make sure your listings answer those core customer questions at a glance.
Not only do your vehicles need to be easy to find and answer all the core customer questions, they also need to be easy to share. Customers want to easily share vehicle listings with their significant other, a friend, or themselves via text or email. No logins or shopping carts required.
2) MAKE IT EASIER TO GO FAR FROM HOME.
The reality is 99 out of 100 buyers expect the car shopping process to be a hassle(4). Considering 56% of consumers would buy more often if it wasn’t so difficult(4), the big question is what can we do to make it less difficult?
Here’s what customers want to make the process less hassle-driven:
- Transparency in the process and the pricing.
- Ease and convenience. Consumers don’t want a long, drawn out process.
- Less stress and no haggling. Haggling is not fun and can be a stressful process.
- Confidence and trust in the dealership and the salesperson.
- Value and quality at a fair price. They don’t want the cheapest, but the best value.
What do you say on your website that reassures and welcomes them into your dealership? Have you allowed them from the comfort of their own home to get to know you enough so they want to come in?
3) BE REAL — SHARE FACTS AND DELIVER.
Customers don’t want to start from scratch when walking into the store. Validate all the information they saw online and make sure it is the exact same as what’s in the showroom. This builds immediate trust and shows you care and listen. If the in-store experience mirrors the online experience, you have a much higher likelihood of success.
4) EMBED PROFIT INTO THE PROCESS.
Dealers like to sell cars and help customers, but most importantly they need to make a profit. Unfortunately, those profits have been eroding over the years. It’s time for a new sales process and many dealers are recognizing the need to adapt. 45% of dealers in a MAX Digital study said they are looking to change their sales process, and a majority want a more consultative approach(5).
Dealerships can deliver the strongest profits by inviting the customer to participate in the process. When your customers feel in control, they rate their experience highly (hello CSI scores!). You can build value by showing the package details and market comparisons. In fact, 78% of consumers won’t buy a used car without a third-party price validation.(6)
For trade ins, the customer can take an even stronger lead. You can get the customer involved during the trade-in process with the following tactics:
- Guide the conversation. Ask simple questions about the quality of the trade-in vehicle. E.g. “If a 1 was bald tires and a 10 was brand new tires, how would you rate your tires?”
- Bridge the value gap. If consumers won’t buy a car without a third-party validation, how likely are they to trade in without a third-party validation? The purchase offer needs to bridge the gap between their initial understanding of their car’s value and the actual fair market price.
This collaborative process works much better than the used car manager taking the car for a spin and coming back with a number written on a piece of paper.
5) ENABLE TECH TO GUIDE ADOPTION.
The automotive industry struggles with high turnover— now at 80% for auto sales consultants(7)— and technology can help. Seven in 10 dealers said their sales people don’t have enough training or information(8), which helps explain the high turnover. Equipping sales people with the right tools and training will set them up for success.
Technology solutions can provide insights on metrics such as time to market as well as who on your team is performing and who needs more training to be effective.
But remember, technology alone does not and will not help you sell more cars. Success in an omni-channel world is all about collaboration and making it easy for your people to adopt technology. Monitor usage trends and leverage your vendors to do additional training when needed. No one wants to pay for technology that doesn’t get used.
In the next five years, the majority of dealers are going to adopt this omni-channel approach.
Creating a simple, transparent process that maximizes profit doesn’t have to be hard. These are easy steps you can take – and they all don’t require a process overhaul or mean you have to do it all at once.
About the Author
Mike Cavanaugh is Executive Vice President of MAX Digital, an end-to-end software provider for the automotive industry. The company empowers auto dealers to conduct transparent sales transactions, increase gross profits, and sell more cars through digital retailing.
Source/Notes:
(1) Google/TNS Auto Shopper Study, 2016, U.S.
(2) 2018 Auto Trader Study
(3) Kantar TNS/Google, “The Drive to Decide 2017”, U.S. 2017
(4) Driving Sales Customer Experience Study
(5) MAX Digital 2019 Profit Study
(6) Car Gurus Shopper Study
(7) NADA Dealership Workforce Study
(8) MAX Digital 2018 Turnover Study