The current dealership sales and finance process was built by dealers, for dealers. Not consumers. There are a lot of critics that say the automotive retailing is the largest broken industry in the world and many say the process is destined for significant change. All this is fueled by:
- Raised consumer expectations
- Increased scrutiny by the CFPB
- In-store processes plagued with information disconnects and profit leaks
Many consumers are looking for an Amazon or Apple buying experience – models that really don’t facilitate highly considered purchases or require complex deal structuring or financing. Our industry can’t be exactly like those models, but we can certainly be better. It’s time to evolve: the way consumers shop for cars has dramatically changed over the last several years but the way cars are sold has become outdated and stuck in the status quo.
Obviously, people will continue to buy cars but consumer expectations are going unmet. Which has meant emerging business models, like Beepi, Carvana and Vroom, have gained positive attention from venture capitalists and consumers alike for simplifying the process. According to a recent Cox Automotive study, less than 1% of consumers like the sales process as it is today. Eighty-eight percent of dealers say significant opportunities exist to improve the sales and finance process in their store. With numbers like these, there is an imperative to evolve dealer business models based on consumer behaviors and expectations. Dealers are being forced to seriously look at how they can become more efficient in sales and operations, F&I, inventory and parts and service; or risk losing the customer and possibly driven out of business in the mid to long run.
If profits are determined by sales and sales are determined by sales process, then there’s little doubt that the greatest obstacle to success and customer satisfaction is the time it takes to complete the deal structuring and F&I portions of the car-buying process.
Based on research that will be presented in this session – “Think Like Your Customer. We Can’t Be Apple but We CAN Be Better” on Tuesday, August 9, 3:00pm – 3:50pm in Room 123 – the biggest opportunities to improve the Sales & Finance process are:
- Creating greater information flow between the Sales and Finance departments
- Eliminating the ‘unsatisfying’ wait time for the customer
- Improving the speed and quality of the customer’s transition from Sales to F&I
- Reducing the time the customer spends in F&I
Creating a truly connected buying experience means leveraging new online and in-store technologies to create one unified car buying experience.
Dealers should think more like the customer. The more customers know, the more comfortable they are. The more comfortable they are, the more likely they are to buy. According to a Cox Automotive Study, 90% of U.S. buyers are payment buyers. Today’s shopper requires more than just price transparency, they also want deal transparency. If most shoppers want to know what their monthly payments will be, how much they can get on a trade and what financing terms will be before they decide on a specific vehicle, then make it easy and convenient for shoppers to find the information they are looking for. Make your website more transactional and consider moving current ‘in-store’ processes online. Start sales and finance together, online and at the same time. Think: Online 4 Square tools.
Give consumers more control of their dealership experience by offering fully integrated price negotiation, deal structuring and F&I tools including instant trade-in and credit decisions; available incentive and rebate programs; and payment calculators. With online) retail tools, the consumer is giving a little to get a lot (but at the benefit of the dealer. Transparency becomes a two-way street, forcing the consumer to give up more of their personal information earlier in the process and shifting the online information advantage back towards the dealer.
This is not a race to the one-hour close. It’s about creating a process that allows the dealer to go as fast or as slow as the customer wants – and, the end result promises to be a boost to your bottom line and increased customer satisfaction.
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.