*Previously seen in FUEL, the Reynolds and Reynolds monthly newsletter*

By Jessica Quattro

I’ll come right out and say it – customers are disenchanted with the car buying process.

I know, I know… “Thanks, Captain Obvious.”

But it’s a serious issue, and it’s one that spans generations. Roughly 25% of Gen Xers say they would rather battle a root canal than negotiate with a car dealer. Think about that… a root canal. Similarly, 56% of millennials say they feel salespeople pressure them into buying something right away. 1 How did we possibly let the car buying process get so painful that consumers would rather have a dental procedure than visit a dealership? Upon close inspection, it’s easy to see the problem is rooted in the execution of the process rather than the core process itself.

To start, salespeople are often limited to approaching customers completely cold or waiting for the customer to make the first move. They can’t proactively jump on a good opportunity because identifying those opportunities requires detailed information beyond a customer’s name and phone number. This leads to customers reacting to most sales interactions defensively, reducing their willingness to buy.

Deeper in the buying process, the typical execution of deal negotiation rubs customers the wrong way. Salespeople spend too much time away from the customer to counteract their lingering feelings of pressure and expectation. Whether they’re at the desk talking over deal points with the sales manager or in transit to/from the desk, the customer is left alone.

An unattended customer is a wild card. Are they shopping your competition? Are they venting to their friends via text? Are they drafting their Google review? Or maybe they’re just sitting there in silence while dealership stereotypes and horror stories swirl around in their head? There’s no way for the salesperson to manage the sales cycle AND the customer’s experience when they aren’t with the customer.

All that to say – the average salesperson is woefully under equipped to effectively manage all aspects of the buying experience.

Luckily, technology is growing and improving to meet these challenges head on.

New solutions are addressing customer pain points by giving your salespeople what they need to manage the buying process – from first contact with the dealership, to negotiations, to signing the deal. Allow me to paint a picture of what this looks like:

1. An indicator in the customer profile visually shows an equity estimate on the customer’s current vehicle, indicating to the salesperson that the repeat customer has positive equity in their potential trade.
2. After settling on a vehicle with the customer, the salesperson skips the “leaving their customer” part of the traditional negotiation process by electronically sending the sales manager key details to start the process.
3. These details lead to a strategic first pencil created specifically for the customer using the details gathered like the finance and payment options they’re looking for and the ballpark trade value based on the equity estimate.
4. From there, the sales manager starts a deal based on what the customer is looking for, rather than a pre-set payment option matrix. All the while, the salesperson is present with the customer and available to discuss the vehicle or answer questions about the process.
5. Once the sales manager electronically sends the deal back, the salesperson easily presents the payment options on their tablet or computer where the customer accepts or revises the options and electronically sends additional details back to the sales manager.
6. The process continues until a deal is settled on, with the salesperson staying present with the consumer, transparently sharing updates and information about the vehicle and deal options. The process is faster, transparent, and streamlined for everyone involved.

CRM technology is being redefined to alleviate some of the tension between you and your customers. This new workflow not only speeds up the sales process, but helps increase repeat buyers and gives the customer a sense of control, ensuring they aren’t left alone while the salesperson runs back and forth from them to the sales manager to negotiate the deal. Furthermore, the most cutting edge CRM technology is allowing the process to expand beyond the four walls of the dealership without sacrificing control or profitability.

To learn more about what else is being done to redefine CRM, read this article about how a redefined CRM can be used to improve teamwork between sales and service departments, deliver better customer service, and increase customer retention.

1    https://www.autodealertodaymagazine.com/322497/87-of-consumers-dislike-dealership-experience-survey-finds

About the Author

Jessica is product planning manager at Reynolds and Reynolds for sales based applications.

*This article previously appeared in the Reynolds and Reynolds FUEL monthly newsletter*

By Chris Walsh

Nobody saw 2020 coming. It flipped our world upside down in a matter of days, and some of us are still trying to put our heads back on straight. But the aftereffects that late 2020 and early 2021 brought are even more surprising. Despite sky-high car prices and minimal inventory, shoppers are in fact out there. And there’s a lot of them. In this article, I want to highlight current and upcoming car buying trends you need to know so you can better position your dealership to not only capture these shoppers but to maximize each opportunity.

Trend #1: Rise of Couch Shopping (figuratively)

For years, consumers have started the car buying process online in the form of research. With more information at their fingertips, this convenience is the catalyst for most purchases. 2020 spurred consumers to adapt their buying habits even further. No longer did they want to step foot in the dealership. They wanted more and more aspects of the traditional car sale available to them in a remote setting.

The challenge is making sure your dealership still has some control in the process, keeps the customer engaged, and maintains compliance along the way. A retail anywhere approach allows you to serve your customers no matter where they are, without seeing a dip in profits or efficiency.

Trend #2: Frictionless Is Here to Stay

Though this somewhat falls under the couch shopping trend, a frictionless experience is an entirely different beast and deserves its own recognition. Historically, consumers have been prone to value convenience. 2020 put this into overdrive. This means setting up your F&I managers so they can sell in an online environment; because yes, even if the customer isn’t in your store, you still need a full, transparent, and compliant F&I experience.

The tricky part is consistency and accuracy throughout the process. What happens when your customers want to start online but end in-store? What happens when you a co-buyer located in a different state? Do you find that your F&I managers have to reenter everything the customer already started online because it didn’t carry over? Or maybe the information just isn’t accurate so they have to spend time reviewing what’s right and what’s wrong.

When a customer wants a blended, online to in-store car buying experience or the transaction starts and stops at different points for whatever reason, your dealership needs to be able to pick up exactly where the customer left off. No rekeying of data, no missed signatures. Simply finish the deal, grab the keys, and go. That is the frictionless experience consumers expect.

Trend #3: Used Vehicles Are Flying… Off Lots, That Is

Saying used vehicles are a hot commodity right now might be stating the obvious, but sometimes the solution isn’t as obvious. Let’s address the elephant in the room: chip shortage. With less new vehicles being produced on the manufacturer level, dealers have no choice but to scrounge for used vehicles in order to keep their lots full. I recently drove by a local dealership, and they had less than ten new cars. It’s truly frightening to see.

Additionally, consumers are opting for used over new in general. As new vehicle prices climb, used vehicles are simply more appealing. The quality of vehicles has also improved over the years, so used vehicles aren’t carrying that negative stigma anymore of being outdated or rundown.

To acquire inventory, most dealers are looking outside of their four walls. What gets overlooked are those used vehicles already in their store or database. When you have a predictive analytics engine that can identify likely trade-in customers, that is your most cost effective way for acquiring what you really need. The data fueling the engine identifies only those with the highest likelihood to make a move, so you’re not wasting time on those who simply aren’t interested.

I also have to mention getting vehicles ready for prime time. When you do in fact get your hands on used inventory, you first have to get it into retail condition. Most dealers think their reconditioning process is just a few days, but in fact, it averages around 12. I don’t think we need to do the math, but the longer a vehicle sits in recon, the longer it takes for you to see a return (if there is one at all), and start the process all over again. As demand increases, your recon process should be automated, transparent, and streamlined if you want to keep up.

Trend #4: Deals Trump Loyalty

Customer loyalty used to be fairly strong. Shoppers would tend to stick with a certain brand, and even sometimes a specific dealership. I hate to say it, but that ship has sailed. In a recent study, over half of the brands analyzed had a less than 50% brand retention rate. This means consumers are no longer shopping based on brand or dealership. They’re shopping based on price. They simply want the best, well-rounded deal, even if that means sacrificing a little bit of the experience.

What this means for you is optimizing your digital ad strategy and online presence. Working with a dedicated partner to identify conquest opportunities will be critical this year as more consumers opt for a new brand. You want to make sure you’re the one they pick. And keeping your current customers doesn’t hurt too.

Your Next Move

Trends definitely come and go, but I believe what we’ve seen this past year and a half are more than just trends. It’s the new way of life and doing business. The dealerships that fail to address the changing car buying landscape will eventually fall to the wayside. So think about these trends, adoptions, and how they will continue to shape our industry moving forward.

About the Author

Chris Walsh is the executive vice president of Sales at Reynolds and Reynolds, overseeing all Sales leadership for the company. His focus on delivering a top-tier suite of products and services for Reynolds customers, developing the company’s Sales talent through intensive on-the-job and classroom-based training and education, and equipping that talent with a data-driven approach and actionable market insights, all combine to position Reynolds Sales for long-term success. He holds a bachelor’s degree in business from Ohio University.

*This article previously appeared in the Reynolds and Reynolds FUEL monthly newsletter*

By Corey Walls

At this point, every automotive retailer has heard that “electric vehicles are the future.”

That’s actually inaccurate – the age of electric vehicles has already begun, and there are no signs that it’s slowing down: plug-in and hybrid vehicle sales have quadrupled globally since 2015.  And when you look at the lucrative used vehicle market, both supply and demand for electric vehicles are rising quickly.  There are now well over 1.3 million EVs on the road.  It is still a niche market, but similar to lifted and accessorized trucks, it’s a highly profitable pre-owned segment if you can effectively buy, and more importantly, sell these vehicles.

Before you enter this market, you need to make sure your sales team is ready.

Train Your Staff on the Technology

Across the board, your associates need to become knowledgeable about the features of electric vehicles, but this is especially crucial for your sales staff. One way you can train your associates is through role-playing conversations about electric vehicles.

Vehicle lifespan, battery specs, and charging options should be foundational, base-level information for each EV on your lot. Just as you’d mention engine performance in a sales pitch for a truck, you should learn exactly how battery-electric cars perform and transmit that information to potential buyers.

It’s also critical to avoid grouping all EVs together in one category. EVs can vary significantly in size, range, and performance. A Tesla Model S and a Nissan Leaf will have vastly different features and buyers, despite the fact they are both powered by electric batteries. Research-driven customers will want to know which EV best fits their needs, so your staff needs to know what sets each one apart. For prospective buyers, seeing their options in person is a key step of their buying journey, and your readiness to engage with them will determine the outcome.

For example, there could be confusion in the buyer’s mind about how charging works. One way to clear up any misconceptions could be to offer a hands-on demonstration to see firsthand how they would charge their vehicle. It’s also vital to teach them about the options of an in-home charging device or point them to apps that can locate publicly available charging stations.

Selling EVs will require a higher degree of technical knowledge, but through coordinated training efforts, your sales staff can embrace opportunities to talk about electric vehicles with prospects.

Build Strategic Relationships

As EV technology continues to evolve, you may find prospective EV buyers have more questions and a longer buying process than traditional car customers. This means it could be necessary to heighten the management of your interactions with specific customers, which can be achieved with effective customer relationship management (CRM) software.

Ideally, you want your salespeople to lead customers to a purchasing decision, but it can be difficult to focus your efforts in the right place without an effective CRM. To boost both efficiency and effectiveness, this solution would help your team prioritize tasks and follow-up actions based on the likelihood to buy.

A key part of this is understanding different EV buyer profiles. For example, Teslas and Audi EVs are high-performance vehicles with very advanced tech features, meaning the type of buyer you should target for these vehicles is different from, say, an environmentally-conscious Millennial looking at a Hyundai Kona.

That same base of technical knowledge in your sales associates will also help them differentiate between prospective buyers for the various EVs in your store, and your CRM is vital support in this area.

Implementing an effective CRM solution also ties back to properly training your staff to sell EVs. You can use real data to coach your employees on both their strengths and weaknesses throughout every customer interaction.

Conclusion

EVs are here to stay. While America is still adapting to EVs being more readily available, you can prepare your dealership to sell EVs with straightforward, intentional steps. By training your employees on the technologies behind EVs, prioritizing relationships with prospective buyers, and driving home beneficial incentives in F&I, your dealership can take charge of electric vehicle sales.

About the Author

Corey Walls is Senior Director of Product Management at Reynolds and Reynolds. He leads Product Management for Naked Lime Marketing, Digital Retail, and FOCUS. He was formerly the director of software design for ERA-IGNITE, POWER, The docuPAD® System, AddOnAuto, and ReverseRisk®.

*This article previously appeared in the Reynolds and Reynolds FUEL monthly newsletter*

By Hayley Holmes

Have you played “two truths and a lie” before? The concept is simple. I give you three statements – two are true, one is false. It’s up to you to determine which are which. Our topic will be about consumer leads and their likelihood to buy. Think you have what it takes?

Let’s play

1. A customer currently driving a two-door coupe is likely to upgrade to a newer two-door coupe.

2. More leads do not equal more conversions.

3. Negative equity can be used to your advantage.

Do you know which are true and which is false?

Let’s dive in

1. 1. A customer currently driving a two-door coupe is likely to upgrade to a newer two-door coupe.

This statement is false. Just because a customer bought it before does not mean they will buy it again. There are a variety of factors that could have altered this customer’s position to buy.

Perhaps the customer purchased her two-door coupe when she was twenty-two and single. Now, seven years later, she’s married and expecting her first child. Do you think a two-door coupe still fits her lifestyle? Likely not.

Perhaps the customer has moved and changed jobs since she first purchased the two-door coupe. Her new neighborhood and income have changed her buying position. Now, she is more likely to purchase something accommodating to her long commute and luxurious to fit her new lifestyle.

1. 2. More leads do not equal more conversions.

This statement is true. You might be thinking that a constant stream of leads coming in is like Christmas morning, and the more leads you have, the more you close. Not true. It’s about the quality of leads, not the quantity. Carefully crafting your lead funnel to the leads that will actually buy hold much more value than a random assortment of leads thrown at your salespeople. It’s about analyzing your inventory, the market, and your database to identify not only possible leads, but those likely to close.

1. 3. Negative equity can be used to your advantage.

This statement is also true. At first glance, you’re probably thinking a customer with $6,000 in negative equity is a reason to run for the hills and wait a couple years to call. Not a chance would you consider approaching this type of customer. Not so fast. You might be surprised to find that factoring in incentives and personal buying habits brings this customer from a D rating to an A+.

Moral of the story: not all leads are created equal, so why treat them the same?

Let me explain

How am I coming to these conclusions? Predictive analytics.

Predictive analytics uses demographic, behavioral, and transactional data to determine customer buying likelihood. It considers life circumstances and compares it to historical data of similar customers to make an informed decision.

Just like leads are not created equal, predictive analytics engines are also not created equal. In each statement above, the predictive analytics engine is going against the odds and the norm. Consider implementing a predictive analytics engine that goes beyond traditional data mining. The right solution will leverage previous deal information, in-stock inventory, OEM incentives, and behavioral and demographic data to propose buying propensities and likelihoods. You’ll be able to identify customers you would not have considered targeting before, and you’ll walk away with a new approach to and outlook on selling vehicles.

See what your salespeople think about this round of “two truths and a lie”. Did they get them right?

About the Author

Hayley Holmes is the product planning manager at Reynolds and Reynolds for XtreamService. She formerly served as a marketing specialist and team lead, providing XtreamService to dealerships, and assisting to build and develop the marketing services team.