7 Methods to Keep Dealerships Relevant in the Age of Online Orders
For the past three years we have worked extensively in automotive dealerships, training staff on customer service skills, and coaching management teams on how to deliver better customer experiences. We are always talking to dealership owners and managers about how to remain relevant to a changing consumer base. Unfortunately, we come up against an outdated mentality and attitude that has failed to pivot from the manufacturing-focused business model (when it was all about the product) to the model required today (when it is all about the customer).
Many automotive dealerships are still focused on things rather than people, and as a result, buying and servicing a car can be one of the most annoying and painful things a consumer can do. In fact, when it comes to car shopping, Edmunds.com finds that Americans hate the haggle so much that they’d give up Facebook, sex, and smartphones just to avoid it. And if there is one thing we know about consumers, it’s that if something is painful or stressful and offers little experiential value, they will soon figure out how to avoid it.
“Car sharing services like Uber and Lyft, combined with a demographic shift back to cities, are changing the cost/benefit equation of ownership. For a growing cohort of Americans, it is now cheaper and equally (if not more convenient) to use a mix of transit, biking, walking, and auto-on-demand than it is to own, park, maintain, and insure a car” Forbes reported in 2014.
Whether auto dealers like to admit it or not, the relevancy of their dealerships is being questioned. These threats are not just coming from disruptors like Uber, Lyft or even Tesla, whose sales model is resonating with consumers, but most importantly from within. An unwillingness to shift to a more customer-oriented focus is the single biggest challenge within the industry.
So, let’s review some of the ways automotive dealerships can create better customer experiences and become more relevant to the modern consumer.
We know customers are doing most of their research online, creating a very knowledgeable and empowered consumer, but what the Internet cannot do is give a consumer a chance to play, test, assess, and drive the vehicle. The test drive is still the best way to sell a car, and yet it is amazing how difficult it can be to just get into a car. Some dealerships and their staff make such a big deal about getting into a car (because they want to be sure you really want it) that by the time they get access to keys, make you sign your life away, and have grilled you on your means to purchase, that you are annoyed enough to go elsewhere.
Test drives must be easy and accessible, and not placed under any pressure of time. If all you get is to drive around the block with someone who is obviously making it clear they have more important things to do, then why bother? Now, we understand the pressure sales people are under; with margins shrinking considerably, the frustration of spending a lot of time with someone who has no intention to buy is real. That is why the sales person may not be the best person to conduct a test drive. We love what BMW has done with the introduction of the Genius role. It was created to allow customers to learn abut the vehicles and to test drive as many as possible in a pressure-free sales environment; it’s exactly what the customer wants.
When it comes to the test drive, another consideration is that it must be customized to the person driving. Offering a choice of beverages, favorite music stations or genres, and a choice of driving conditions, is a must; yet, many times there is little consideration for what the customer likes. The goal of any test drive should be to make the customer feel like the car is theirs. By creating tastes, sounds, and driving conditions, you go a long way in making that ownership a reality. We love the Tesla test-drive experience that begins with the selection of your favorite song, immediately connecting you to the car.
Automotive dealership must find a way to connect better with women. One of the most important and influential demographics representing huge purchasing power is being ignored, and in some case disrespected. As owners and managers, there must be a focus on removing the sexist and boorish attitudes so may people in the industry still direct towards women. One of the ways to do this is to hire more female sales staff, so that consumers can choose which gender makes them feel more comfortable for business transactions.
There can also be more messaging and training to the current sales and service staff about their interactions with women. For example, Lexus is rolling out the “Lexus Difference” to help train staff to be more sensitive to their interactions with customers; in particular women.
Talent Selection: Experienced Doesn’t Mean Good
Dealerships must stop placing so much emphasis on previous automotive sales experience for their showroom floor. Because of this preference, many times dealerships just end up recycling staff that have been recently fired from another dealership down the road. To attract sales staff that is younger, more diverse, and more customer-centric, dealerships and their leaders must be willing to invest in training for a culture that recognizes and protects those who are different.
“Dealers need a management and sales team that looks like its buyers in gender, age, and race,” wrote Bob Carter, Senior Vice President of Automotive Operations for Toyota Motor Sales USA in Wards Auto in 2015.
Remember to recruit for a person’s ability to engage and care for others. Just like many other industries, you can train customer-facing people on the knowledge and processes required to run the business, but you cannot train them to like people. Dealerships must move beyond experience when they look to hire new staff; they need to look for people with the type of personalities that your customers want to deal with.
Great customer experiences are often the result of great interactions. With our background in the hospitality industry, we at SGEi know there are a number of basic service techniques and habits that would easily transform the service and after-sales experience at dealerships. Simple concepts like the 10-5 Rule, first impression management, how to personalize conversations, and how to make customized recommendations, are all important to the modern consumer. Yet, there is often little appetite from owners and general managers to invest in this type of service training. One of the most important investments the dealership can make is to establish, teach, and reinforce great customer service skills. It will make your customers smile, and that is the simplest and often most important form of service.
Transparency and honesty are important values to the consumer, and yet they are not words you would often hear in connection with a car salesperson. According to Gallup in 2014, 92% of consumers don’t trust car salespeople. Currently, the one-price approach is being tested across multiple brands and public groups. Dealerships offer a single, best price so there is no need to negotiate: it lets the customer know they are getting the best deal without researching and haggling.
SGEi is currently watching as Sonic Automotive Inc. continues to move all of its stores over to this model. In addition to one price at Sonic, customers will deal with a single sales person using a tablet, so the whole sales process can be concluded within an hour.
Time & Tech
Companies that waste their customers’ time, or make interactions painful, are quickly losing customers; yet, many auto dealerships fail to respect this important consideration. Why does it still take hours to purchase a car? It is often a dealership’s disorganization and self-imposed rules and paperwork that are causing so much pain to the customers.
Utilizing tablets to capture and process information about the customer, car, and payments significantly streamlines the buying and service process. Many brands are investing in tablets for their staff, but getting them onto the technology and actually getting themcomfortable with it is very different. We see sales staff with tablets that are never used, because in reality they don’t know how to use it, and would rather not try.
Investing in software and technology training for customer-facing staff is critical in improving the customer experience. Even without technology, just showing consideration of the customer’s time, and customizing the sales or after-sales process to that time, is an important step in the right direction.
Connectivity & Environment (Yes, This Is a Dealership)
If you are going to use some of your customer’s time, then you need to ensure it is in an environment that is relaxing, refreshing, and allows for connectivity. Starbucks proved that people consider it a good use of their time to sit with a great cup of coffee, have a snack as required, and to easily get online. Why is this so difficult for most dealerships? Stale coffee, vending machines, outdated magazines, hard to access WiFi, and loud TVs are far too common in dealerships today.
Dealerships must evolve their environment so that customers don’t mind hanging out while they wait for their cars to be prepared or serviced. When customers visit your dealership, they are looking to see if you are a brand fit and meet their expectations for cleanliness and organization. Ensure restrooms, lounges, and offices are cleaned and organized regularly to ensure the best possible impression.
These ideas are simple with the right attitude and mindset. Unfortunately, there are still too many owners and executives of car dealerships who manage their business and treat their customers like it’s still the 80s. If you’re wondering if your dealership is relevant to modern customers, then go online and see what your customers are writing, and check if you maintain market share. It’s not just about making money; it’s about creating an experience at your dealership that connects your with customers, values their time, and delights their senses; it’s about ensuring your dealerships are relevant so they don’t become relics like video rental stores.