Anyone who attended this year’s NADA in New Orleans would come away with this truth: dealers are on the lookout for ways to improve the customer buying experience in their store or stores. How? By finding process efficiencies in the Sales & Finance deal flow that reduce average transaction times, while increasing profitability and customer satisfaction. As evidenced by a sea of flashy and impressive booths at NADA, there is an abundance of forward thinking technologies available to help dealers do that. And yet…
…disconnects remain between dealers seeing a problem and their willingness to adopt technologies that, while they have the potential to help, will undoubtedly upend legacy processes.
Auto dealers are some of the smartest businesspeople on the planet, and have advanced our industry by light years since the ‘worldwide web’ first set NADA on fire in 1996. However, a constant onslaught of ‘shiny object’ and flash-in-the-pan solutions has served to make even the most progressive dealers’ heads spin and have served to make less progressive dealers even more jaded and speculative about the supposed ‘next best thing’ on the market. That being said, there are some solutions that seem so obvious, whose adoption is so global that my head spins with the question: why aren’t more dealers adopting it?
Ask yourself these four questions:
- Do you use a mobile device/tablet in your everyday life?
- Do most of your customers use a mobile device?
- Would you like to find processes efficiencies in your dealership that reduce average transaction times?
- Have you adopted mobile devices/tablets in your dealership Sales and/or F&I department?
My guess is that your answers to the first three are all “Yes,” and, yet, the last is a ‘No”. Here’s another question: Do you see a disconnect here? Maybe you are even reading this on a mobile device? This disconnect mirrors the results of a survey that we conducted recently to understand to what degree dealerships are adopting mobile devices, what the benefits are; if it could have an impact on the F&I department and, for dealerships who are not adopting, why not?
Since 2013 we’ve been examining the disconnect between actual start-to-finish purchase transaction times and what dealers believe is the “ideal” time consumers should spend in a dealership buying a car. The good news is that this year ‘the disconnect,’ as reported by the cross section of dealers in our survey, has diminished somewhat since the previous year, with transaction times showing a marked improvement.
|How long do you estimate the start-to-finish (sales/financing) transaction takes for your dealership(s)?|
|2014 Survey||2016 Survey|
|Over 3 hours||40%||25%|
Nevertheless, well over half reported an over two hour process, and, of the nearly 80% that stated that two hours or under was an ideal transaction time, well under half (42%) reported actually achieving it. Among the issues cited for the slow down were transition time from Sales to F&I and the time it takes to complete the F&I portion of the process.
This got us wondering: what if the process were expedited with the use of mobile tablets? Would that make a difference? So we asked dealers to give us some feedback on mobile device adoption and usage, and these are the results:
The majority reported that they believed mobile devices can speed up the transaction process. But, and this is a very big but, 60% of those not already using mobile devices in their dealerships said they were not even considering adopting mobile tablets. That’s right: nearly two in three will not even consider using them. We asked why and the top three reasons cited were: 1. Cost to Implement, 2. Staff/Management Resistance to Change, and 3. Undefined ROI.
|What are the reasons you are not considering the use of mobile tablets in your dealership?|
|45%||Staff / Management resistant to change|
|19%||Sales team turnover|
|16%||Can’t see the benefits|
This puzzled me. The cost of the average tablet is around $400, but that pales in comparison to the dollars in time potentially saved by shaving just one hour off the sales/transaction process. The increased efficiency and productivity could easily pay for a tablet in a single day.
As for staff resistance, that is as hard to comprehend, given that most of today’s Sales/F&I personnel are already using their own personal mobile devices – so training to adopt should be quite simple. Perhaps the answer lies in the third issue, undefined ROI … if neither store management nor staff can see a conversion, customer satisfaction or productivity benefit – then resistance is easier to understand and the answer perhaps lies in better proof points from vendors offering mobile solutions. That being said, the results of the survey do indicate that dealerships are able to visualize the benefits:
|What do you imagine the greatest benefits of using tablets in your dealership could be? Speeding up the process is number one!
|#1||Speeds up the process|
|#2||Increases customer satisfaction|
|#3||Improves dealership efficiency/consistency in the process|
|#4||Makes dealership personnel jobs easier|
|#5||Increases selling prices and profits|
In spite of the disconnect between dealers ‘not considering’ but also acknowledging that they could ‘speed up the process,’ the survey results had a silver lining in an area that we believe can benefit the most from increased connectivity, information and process consistency facilitated by mobile devices: F&I.
Of the dealers we surveyed, nearly half are either considering implementing mobile devices (33%), or already using them (17%), in their F&I department, which shows that there is great potential for adoption if ROI can be proved. Meanwhile, Sales departments are exhibiting slightly higher usage of mobile tablets with 24% using mobile tablets and another 39% considering using them. And here is a key point: of dealers using mobile tablets, the number one realized benefit cited was ‘speeding up the sales process,’ with improved CSI and efficiency and consistency of processes second and third.
So how do we connect these dots? My belief, shared by many of the dealerships I speak to every week, is that a ‘connected’ car buying experience is the secret sauce of shorter transaction times, greater productivity, CSI and ROI. By connected, I mean literally end to end – from the Meet & Greet through F&I to delivery. And app or web-based mobile technologies can have a huge part to play in this. Here are just a few ways I believe that the use of mobile technologies can accelerate and condense the entire car buying/selling process:
- Mobile technology enables the equal exchange of information anytime, anywhere with consumers, whether the consumer is at home, work or at the dealership.
- Mobile enabled technology creates engagement and builds trust and tears down barriers with consumers.
- Mobile technology enables everyone in the dealership involved in the vehicle purchase transaction to be connected, reducing bottlenecks and inefficiencies in the sales and finance process.
- Mobile enabled technology can help dealers sell more cars faster, increase profitability and improve customer satisfaction.
These are just a few ways that I am convinced mobile technology can increase ROI and conversion – just by using a device that has become as ubiquitous as the TV. So, in closing, I ask the question: if you are using a mobile device to make your life more efficient – whether ordering pizza, reading a book or booking an Uber – isn’t it worth giving it a try in your dealership? Process change is only as difficult as you expect it to be. Only one thing is for sure: by changing nothing, nothing changes.
Author: Pete MacInnis
Pete MacInnis is founder and CEO of eLEND Solutions, a company that is focused on providing a more efficient sales and finance process for the entire automotive industry. eLEND Solution’s patented platform streamlines car selling by bringing more functionality online. The company’s suite of products includes CreditPlus, ID Drive and MOBILOT.