*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 Hayley Holmes

COVID-19 continues to put pressure on the automotive industry. Sales teams have been forced into the new territory of online selling, manufacturers are playing catch up after halting production, and sanitation has become the new convenience factor in stores. But what really stands out to me is used inventory levels. As the pandemic has played out, it has gotten harder and harder to find quality used vehicles. Auctions aren’t what they used to be – both in terms of how they operate and vehicles available. And with the two month lull in sales during the spring, consumer trades took a hit as well. This issue is intensifying every day as consumers are fully back to shopping and are ready to buy. The challenge is, how do you serve them without the right inventory mix?

Mining your customer database is one way to fight back against an undesirable (or empty) used inventory lot. You can scour each profile to find those who are driving just the right vehicles you need, but that’s only half the battle. Of those, you have to find the ones likely to sell or make the trade today. So what goes into it?

Equity Mining 

Equity mining consists of analyzing your customer database to determine how much equity a customer has in their current vehicle. Most people would think targeting only customers who have positive equity, even just a small amount, would give them the best opportunity to close a deal. This isn’t always the case. Positive equity certainly helps when putting together a deal, but negative equity customers can be just as ready to buy – sometimes more so – than positive equity customers. Disregarding negative equity customers right away is a huge miss.

Data Mining

Data mining helps you identify customers in the market and ready to buy or even sell based on life circumstances. It uses three types of data – demographic, transactional, and behavioral – to analyze each customer’s unique position. This includes traits from age and income, to warranty information and deal details, to selling a vehicle and going through a change of address. All these factors, and thousands more, have a generous effect on whether or not a customer is willing to play ball.

Extreme Mining 

Smarter predictive analytics engines will combine every factor when deciding who’s an appropriate target. This includes both equity position – regardless if it’s positive or negative – and life circumstances. The reality is, the more data and information you have on a customer, the easier it is for the engine to determine their exact next move. Maybe it’s to simply sell their vehicle so it’s off their hands. Maybe it’s to trade in their vehicle for the newer model. Or maybe it’s to trade in their vehicle for a completely different model. You wouldn’t know without a robust predictive analytics engine.

Inventory levels aren’t just a challenge to navigate during the pandemic. It’s always important to make sure you’re allocating the right inventory mix for the right customer base. Take a look at your mining efforts and determine what category they fall under. If you’re only using one over the other, you could be missing the mark.

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.