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Dan Dillingham

Dan Dillingham US Central Vice President

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Buying From the Couch

Who would have thought that people could buy a car without ever stepping foot in a dealership or making a phone call to a salesperson?  I can almost hear you saying,  “This guy has lost his mind!”   Times are changing.   Auto consumers can do everything required to buy a car without ever leaving the house - or couch for that matter.  If a house can be financed from a bank in Maine with an electronic signature of a buyer who lives in Texas, then why not a car?   Because, WE “CAR GUYS” WONT LET THEM! 

In most stores today, the buying process for the customer is this “easy:

      1.  Customer researches online

      2.  Customer submits an online lead

      3.  ILM sends an auto responder

      4.  Internet salesperson attempts a phone call to customer.  If answered, they usually ask for       the price and are told the Internet price is the best possible one.  After all, isn’t that why they sent the lead?  Surely it was because it was the lowest price they saw on the websites they visited.

      5.  The salesperson tells the customer they need to set an appointment to negotiate an agreeable price. This, by the way, is the new version of the 1990 technique used when a customer did not want to enter the showroom and wanted to talk price on the lot.  You remember, don’t you?  “The best price, sir, is inside.  Follow me.”  Smile, turn and start walking – if you have control, they will follow you.

       6 – 19.  These steps all happen inside the dealership if the customer makes the appointment and if they show up for said appointment.  We all know what these steps are, and how they are time-consuming and exhausting for everyone involved.

       20.  If you are lucky, the customer will take delivery of a vehicle 15-20 percent of the time.         Whew!   

Now lets take a trip down memory lane to about 20 or 30 years ago.  What was the in-store process before the days of high speed Internet?

  • Plug your phone line into the computer, if we even had one
  • Wait through the ear-piercing connection tone
  • Wade through the swamp that was the World Wild Web to do our research. 

It just wasn’t conducive to providing the information that consumers needed…yet.  It’s more likely that the husband and wife sat at the table and did their budget, writing everything out on a piece of paper to help them decide how much they could spend on their new car.  If they were educated buyers, they go buy the book on how to buy a new car – you know the one - written by the guy you fired last year because he only sold 2 cars a month.  They probably also would purchase Consumer Reports Automobile Edition which provided safety ratings, MSRP and retail price of the individual options and various packages - and best of all, it gave them invoice, rebates and hold back which were most usually incorrect.   Good luck to the salesperson who greeted these customers, armed with their organized 3-ring binder full of ammunition and ready to do battle.   These were customers who would grind their salesperson down so there was no way he could get to the price that they wanted so he turned to the closer, who likely wasn’t there.  He was somewhere smoking and shooting the bull with the desk manger who was supposed to be penciling his deal.  When the closer finds that he can’t close them either, the customers leave and begin hitting every competitor on car dealership row.  When the customers finally figured out that nobody could get them the price listed in magazines and books, they would revisit the first lucky salesperson two or three weeks later, repeat the process from their first visit and five or six hours later drive off in their new car.  Then the high-fives and Marlboros would break out…because those guys were “closers BABY!”   All that being said, I have to admit that as I write this I still get a smile because regardless, it was a blast!   I had so much fun selling cars one at a time like that and it was easy, or so I thought.

In 2014 the business has completely changed.   We are now technology-driven, and that’s ok.   I happen to believe that “Car Guys and Gals” are the best breed of business people!  We just need to keep evolving with the technology available to us.  I’m disappointed to say that there are still many dealerships stuck in 1990.   I see them week in and week out.

It’s no surprise down what path technology has led our industry.  The surprise is how many businesses do not have their processes prepared for what lies at the end of that path.  I’ve been discussing how the car business was “easy” back then.  It was easy for us because the process was the same every day, and we knew what to expect.  What wasn’t easy is that is was slow and inefficient. And, it certainly did not leave a great impression on consumers either – how many cringed to think about having to buy a car from a dealership.  Just look at the industry reputation we all work so hard every day to overcome. I had no idea back then how technology would give a whole new meaning to the word “easy.”

Fast-forward to today’s market– Have you changed your dealership processes to adapt to technology and consumer behavior?

The husband and wife decide they want a new car, and pick up their mobile device (they only grab the lap top if they are my age and cant see the little words on the tablet) and they Google “BEST DEAL ON 2015 TOYOTA CAMRY IN DFW.”  Instantly, all the information they need is on the 1st half of the page, including MSRP, accurate cost, rebates, dealer cash, special rates, and competitive makes and models they may not have thought about.   Once their choices are narrowed down, they look at your website and, believe me, this is just like the phone call 20 years ago.   They are eliminating you based on your website and prices.   CALL FOR PRICE does not work anymore, and if you believe that it does, you were just eliminated.   I recently bought a new boat and I didn’t call for the price even once.   If you don’t have prices on your website then you are toast!  It’s that simple.  Your competitors are just a click away.  

Once shoppers find the car that suits their needs and budget, today’s technology allows them not only to receive a value on their trade, but also make an offer on a vehicle of interest. With one click of a button, the Desk Manger is sent an alert.  This is not a lead sent to the Internet department - this customer wants to buy a car now!   The Desk Manager reviews the offer and responds back with a counter or acceptance.  Once an agreement is reached, the Desk Manager gathers the customer information required, and sends a link to the credit application inside the dealership’s CRM. The Desk Manager receives another alert once the customer completes and saves the application.  After the credit is pulled within the CRM, the deal is given to F&I where they will email the customer electronic forms to sign, and the deal is done.   It’s that easy!  The customer is now ready to take delivery.   All this is done and we have never spoken to the customer on the phone – let alone in person. These particular customers don’t want to talk to you on the phone, and they don’t want to come into the dealership regardless of how many free mani /pedis or Starbucks coffee they get. 

Now I know some of you reading this just said, “Well that can’t happen.  What about the customers with bad credit?   What if they have a trade?  What if they are upside down?   What if, what if, what if?”  My Dad used to tell me if a frog had wings he wouldn’t bump his butt when he hopped.  Some people will  “what if “ themselves right out of a deal or right out of business.

Many are treating today’s car shopper the same as they did 25 years ago, just using a different medium to do it -  and in a much more polite and professional manner that conceals their antiquated processes.   You all know the car business has changed and it is by no means the same as it was in 1990.    As an example, I have not seen a fist fight on the showroom floor in at least 10 years.  Consumers have changed, technology has changed, and we as salespeople are changing but we are still 10 years behind.   We have to get in front of this and start thinking like the 25-year-olds of today.  They are your buyers now and they are your buyers in the year 2025.   What innovations will technology bring us by then?  The twenty-something is our future.  Amazon is delivering packages with drones - who would have ever thought - now that’s forward-thinking!

Thomas Ieracitano
Well said my friend! We need to get out of the way.
Jas Aulakh
This is possible I'm just starting a used dealership and gathering all of the information I can and start to implement into my business.
Alex Lau
This is a great article. This is one of those articles that slips past everyone. BTW, I am in the latter stages of developing a TV platform application for automotive retailers. I'll not let the cat out of the bag, but rooftops will be able to convert a lead with one click of a button, based upon a commercial playing. Think Shazam for automotive.
Dan Dillingham
Thank you, everyone for the feedback. Good selling this week!
James Lawrence
This article reinforces the trend that there are fewer and fewer opportunities for dealerships to differentiate themselves from their competitors. Outstanding insights!

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