I believe you are right......maybe in more ways than one! :)

Great article Ed. I doubt highly Auto Nation would dump 100 million+ into an idea based on a "hunch"...I often wonder if this whole battle with Tesla wanting to sell directly to customers isn't going to put us dealers in a really bad light. Even though I think the current franchise system does offer customers more value than meets the eye. I also think if we (as an industry) allow transactions to take place in a manner the buying public likes (dare I say...enjoys?) then it becomes a non-issue all together. I mean where would a factory owned store get their employees from anyway? The same exact place we do now, the community! The only difference comes down to process, training and culture. All three things we have control over RIGHT NOW. Examples of world class customer service and experience are all around us in almost every other industry and yet the car business is somehow existing inside a bubble (for some dealerships anyway)...People aren't comparing one dealer to another anymore, they're comparing us to the Apple store, to Amazon, Nordstrom's, their favorite restaurant and so on. Your article hits the nail on the head and we have a lot of work to do.

Guess it depends on how you define success. We used to sell cars for fun and profit. These days, new cars are sold for fun and practice. That ceases to be fun after a while. @ Chris - Ford dumped many hundreds of dollars in their own experiment to sell cars the way customers say they wanted to buy in the surveys they took. RE: "People aren't comparing one dealer to another anymore, they're comparing us to the Apple store, to Amazon, Nordstrom's, their favorite restaurant and so on. Your article hits the nail on the head and we have a lot of work to do." You left out Disney. I hope you guys are in the vanguard with your own money on the line in this effort to transform auto retail. Actually, I think Disney, Apple, etc. need to send their people to auto dealerships to help them learn how to sell high ticket items in a competitive environment, where trades have to be taken, most with negative equity, with complex financing issues, and still make gross profit and get a 90% CSI score. But then those guys sell gadgets, meals, and small ticket items, with no trades, etc. But knock yourself out. Talk is cheap. Put your own money in a deal and show us how its done.

AutoNation, Sonic, CarMax are all betting on this as being the future. And yes, the automotive space is much more complex, but all that means is that the solutions will be more complex, just as they've always been. But yesterday's solutions aren't the answer to today's problems.

Thanks David. You're right, how could I forget the "Disney Experience"! It looks great on paper, until someone in a leadership role contradicts the entire concept and the employees go right back to being "Gomo's" and "D-grunts". Look, I get it. The good old days selling cars like it was the wild wild west, before the Internet, before Trucks had window stickers, when you could hold 5 points in F&I...Of course making tons of money with very little effort is fun! Does anyone have a plan to get us back there? Today, the real "magic" happens when we can make a very complex, very large ticket item FEEL like they should be paying us admission, because they've enjoyed their experience that much. Our people aren't $10 hourly kids picking up trash, nor do I think we can learn from their pimply faced order takers. We are trained sales professionals. Many of us earn a 6 figure professional wage because we're great at making a very complex transaction...look and feel easy. Bottom line is this. Customers don't care how hard or complex it is and they don't want to hear our excuses, they expect us to figure it out (while they hold our surveys hostage in the process). As far as being on the front lines, working to make this a reality, my team and I put our own incomes on the line everyday. We're in the trenches, well aware that our customers pay our salaries. When I see something like this coming down the line at such a high rate of speed, the last thing I want to do is live in the past, resenting how hard it's gotten. I'd rather step up and get my team prepared to grab all the lost market share possible once the fit hits the shan... ; )

Chris, Let me know when you find those $10 Hourly kids picking up trash....Lord knows that's not around here. But on to the point. I think it all goes back to customer experience. Disney can charge outrageous prices because they are giving a "magical Experience" that most kids remember the rest of their lives and want to pass on to their children. That is something dealerships need to strive to do, and encourage sales staff to do the same thing. Almost sounds like it's time for me to break out my Frozen songs and start dressing like Elsa and singing "Let it Go"

I understand Apple pays their "associates" $30K per year. If you survey auto buying consumers they tell us that they'd rather not pay their sales person a big commission. They'd prefer to do business with the $30K kid. After all, they know everything from the Internet, right? They don't need much "salesmanship." So should we give consumers what they say they want in surveys? OR should we give them enough "transparency" to earn their trust to the extent we need to to do business at a substantial gross profit? That's what we've done from the beginning. We've provided "relative transparency." Interesting that some say this is a "new" concept. The great thing is that the market has always, and will continue, to sort this stuff out. Every dealer who wants to do business by giving consumers what they say they want in surveys is free to do so. And pundits, and vendors with their own agenda, will continue to make predictions. Its when you have your own money invested that your decisions really count. Corporate approaches lack the same level of accountability to the person making the decision. When your competitor announces a "new way of doing business" is it a marketing ruse or the real deal? Do you follow suit or do you realize you were just gifted a huge competitive advantage?

David, you make a great point about customer surveys being extremely flawed and they certainly don't know our business better than we do. Customers don't know what it is they want half the time, nor do they remember what they wanted yesterday or for long. What they do know, is that they want to get in and out of the dealership as quickly as possible and what matters most is how we make them feel. A good deal will always be a state of mind, and the people we make the most on, give us the best surveys. The customer that spends all their time worrying about price often crushes us on the survey, even after we lost money on the deal. You try putting $30k order takers or $10 an hour kids in place of todays real professionals and CSI will tank, right along with gross, retention and so on. What I think we should be working on is cutting out as many of the "points of pain" we can for our customers while changing the perceptions most people have when they think of a "car salesman".

@Chris I need a like button for some of your comments! Very well said. So many dealerships don't focus enough on changing customers attitudes towards themselves and too much on price. Show customers that your not that "sleezy salesman" and price can come later.

Thank you! A like button would a lot of fun. That and one of those "easy buttons" from staples and we're all set!

When you find the "Easy" button send one my way. I have lots of things that I could use it for. As for the Like button I mentioned it to one of the ds guys a few months back. Maybe we'll see it implemented soon.

Can you imagine a time when the auto maker forces their franchise dealers to rebuild their dealerships to look the same. Wait, they have already done that. What about a time when the consumer can get the exact cost of the new vehicle before they even get there, and find out what other paid for the exact car. Wait, they have already done that too. The worst thing world be the customers ability to shop every dealers inventory , both new and used and get the lowest price before they left the house. See the pattern here. As mentioned before, it is likely that the way people buy cars is going to change , change is inevitable, all we can do is adapt, evolve or perish.

"It is not the strongest or the most intelligent who will survive but those who can best manage change." -- Attributed to Charles Darwin

@Ed, Very well said. And Ben, you hit the nail on the head. Maybe instead of all the visibility, they should maybe focus on letting dealership order vehicles that will actually sell instead of putting so many constraints you end up with tons of inventory that you will never sell. once again, if only there was an easy button!

Man, I wish there was an "Easy Button" - this transformation will be difficult. But as this article shows (just published on Friday) the rewards can be substantial. The test store for Sonic "has seen its marketshare increase to 20% from 13% since implementing One Sonic. And the store's customer-satisfaction scores, administered by Toyota, are at 96% so far this month, higher than any point this year." "Sonic Automotive's bold shift to the future" www.bizjournals.com/charlotte/print-edition/2014/11/21/sonic-automotives-bold-shift-to-thefuture.html?ana=sm_clt_ucp62&b=1416523393%5E15983051&page=all

Nicely written! I do appreciate that, but this is the far far far from reality. How many years of experience do you have actually working in a car dealership? How can you possibly be qualified to make such a prediction? It is a nice article.. It is however just a huge exaggeration of what facts already tell us. As a 3rd party vendor to dealers you cannot in your right state of mind, and with your companies blessing, state such an opinion. Who are you to change the way cars are purchased in other peoples mind? More research and a lot more experience are needed before making such claims. I know vAuto cannot possibly be happy with you posting such a controversial article. That is why people are looking at it. Car dealers are growing more and more tired of being told how to sell cars by vendors who, in most cases, have not even held an upper level management position (GSM - GM) while actually working for a car dealership. Nice article, but it's just not true. Good luck!

Ed, this is a good article and certainly a great Call to Action for Dealerships that want to be successful going forward. I'm in Canada so I expect that things might be a little different in our markets but the structure is very similar. I think one of the biggest issues we face in adopting a transactional approach to selling on-line is the breech in transparency that happens in the transition from the OEM to the distribution channel (the dealership). If you think about other goods and services and the shopping process involved in acquiring those g&s, the transition down the sales funnel is a little more seamless than it is in the auto industry. Typically shopping and research might start at the OEM level and progress towards the distribution channel. As the customer moves into the distribution channel, the customer is closer to transaction and the pricing typically gets more competitive. In our convoluted industry, the customer could begin the journey with review sites, transition to the manufacturer's site once a brand is chosen and begin to fully utilize the shopping tools available there... Build and Price tools, Regional incentives (for vehicles that are sold out), test Drive forms, and on and on. The manufacturer is putting the cart before the horse here. At this point, Cash credits are offered, targeted lease payments are promoted, and finance payments including loyalty credits (which some customers don't qualify for) are HEAVILY promoted. This is the part of the process where the manufacturer is going Mano-a-Mano with their competitors and shaving gross away so there Civic leases out cheaper than the competitive Corolla. The problem is, the offerings at the OEM site are often plus taxes, excluding Freight and Prep and Dealer admin fees. Now the waters are muddied! The customer has now taken the bait and is ready to start checking out availability and the convenience of local dealerships. Now there is a wrinkle. Because of regional regulatory boards, dealers are not permitted to advertise in a similar manner to the OEM. Dealers have to include all fees except taxes and licensing where I operate, so no the customer is left to wonder "why is the vehicle getting more expensive" as they are getting closer to transacting. Now the customer is getting confused! Now trust is compromised and the user experience begins to suffer. If you can figure out this twisty roadmap to the sale, success is waiting for you at the end!

Dave - you are correct, there's isn't a clear path to the sale. The old funnel is gone. Customers bounce around, each following a path unique to themselves.

How are we doing on the time table? Sonic is making the move - 

http://www.autonews.com/apps/pbcs.dll/article?AID=%2F20160801%2FRETAIL07%2F308019991%2Fsonic-will-offer-online-car-buying

In general, the point about big data is that it is increasingly available to everyone: big box retailers and car dealers alike. Outside of transactional data are all kinds of customer touches (web visits, email, phone, store (showroom, service), etc.) that can be recorded and stored. This data amasses quickly and grows beyond the ability for a person to analyze without analytical tools. With the tools though, the data can tell a story about the consumers mindset and intent. So as you pointed out, analysis is the key. Tools are reaching the market at price points that are reasonable so the question becomes: how do you do the most with the data that you have? As time ticks by, competitive forces will force every industry to harness the power of their data...to what end though? In my opinion, the true superpower of big (or small) data is to provide an amazing experience to the customer. Consumers are coming to expect extremely relevant, timely, and individualized service to win their business. The ability to anticipate a customers desires and service them before being asked will win customers and their loyalty. Product mix is an element of that equation but it doesn't even come close to ending there.

Not only are "Consumers coming to expect extremely relevant, timely, and individualized service to win their business" as Adam says, but they also enjoy the timely and individualized service that a good document management system can bring to a dealership. Analyzing big data at your dealership can be enhanced by quick access to your electronic documents such as RO's, work orders, receipts, and history of customer interactions. Here's 4 questions you can ask to evaluate your own document management system: http://www.scan123.com/blog/index.cfm/2013/5/14/Four-questions-you-can-use-to-evaluate-your-document-management-system

Just don't ignore what's under your nose.

"Just don't ignore what's under your nose." Great advice Bill. I think you'll find that when you focus on data and analysis that fits the "Timely, Relevant and Actionable" test, you'll be focused on the important, not on the fluff.

Great article Ed. The challenge is that what was not timely nor relevant for the past six months may very well be today. I think we agree that things don't need to be tested unless the are timely, relevant, and actionable, yet some things need to be monitored periodicly. Going over traffic quality metrics like bounce rate, pages per visits, or duration on site may not lead to any action until suddenly they spike in the wrong direction, Part of the user experience data providers are building into their systems today is in an effort to make monitoring as automated as possible, with warning systems and such. Increasingly, much of the benefit from big data will be process and systems monitoring, so the dealer only needs to look at when something is called up as abnormal. Even then, only when the abnormality is timely, relevant, and actionable. Big Data certainly shouldn't mean humans spending more time scanning over more data. Generally, it will mean far more machine monitoring across far more data points with human time focused only on those timely, relevant, actionable items that are surfaced to the screen. In the short run, stores have an advantage when someone has the data structured in a way that facilitates quick human scanning for problems and opportunities by someone who knows how to quickly do that.

Someone still needs to make sense of large quantities of dissociative data. Luckily, retailers like Walmart have the resources to take macro-level data, and translate that into local-level information. "Timely, relevant and actionable" boils down to context. The amount of data that AutoNation or Penske can aggregate may have little to do with a single rooftop dealership in the middle of Montana. The art, or "gut feeling," is still alive and well. One needs to understand what metrics contribute to one's success, and then be able to append big data to help maximize business decisions. Without that context, big data is just a bunch of numbers.

@Dennis - You are absolutely correct, the trick is to 'package' the data so that it is clear, concise and easy to implement, Whether we're talking about your website statistics or a sourcing list for inventory that you need to buy, the same principle applies. @Bill - I don't think you need to be a Penske or an AutoNation to put data to work for your store. In fact the single point store in the middle of Montana has as much opportunity as the big guys. As Adam mentioned, transactional data is the very tip of iceberg; customers buy a car fairly rarely, but they put a LOT of research to that purchase. That research leaves a trail of data behind that can be to immediate use - actionable intelligence. The purchase is a single data point, the research is hundreds. Every click, every car looked at, time spent, all of it can be cross-referenced, and analyzed in real time. We are at the beginning of the "possible" here. I for one, think it's pretty exciting stuff. As far the "gut", it still exists, but a growing number of car guys are recognizing that experience combined with good data, not only is a decent replacement for the "gut", it can beat it, hands down. See Bill Simmons excellent post right here on DrivingSales "What IBM Watson Can Teach US About Big Data" - http://www.drivingsales.com/blogs/BillSimmons/2013/03/05/what-ibm-watson-teach-us-about-big-data

Totally agree that small store USA has actionable data, and that Watson is good at trivia.

Great article Ed, its al well and good having the data - it's how you implement it that matters, information overload can be quite a problem for many managers in the motor trade. In the companies I've worked in I've seen a few too many examples of 'paralysis by analysis'! Barry - http://www.mymotortradeinsurance.co.uk

Great points Ed! If you are to succeed as a team, you have to have the whole team has to be involved with all advertising efforts.

Nicely said Ed, I couldn't agree with you more. When marketing decisions are left in the isolated hands of one or only a few, you are missing out on a huge opportunity. You have talented experts working in your dealership for a reason - use them!

Nicely said Ed, I couldn't agree with you more. When marketing decisions are left in the isolated hands of one or only a few, you are missing out on a huge opportunity. You have talented experts working in your dealership for a reason - use them!

My sense is that, for more than a few dealers, the involvement in marketing went down because the Internet was so foreign to most manager's skill sets. Couple this with the fact that, for years, the Internet was seen as marginal, incremental business and not the 'core' of dealership marketing. We now have a generation of managers that have had little involvement with their store's marketing. There are exceptions, to be sure. And these exceptions seem to be dominating. For me, the takeaway is to keep evolving your skill set or, frankly, get left behind.

All very key points Ed. Same decisions, just another way to display is the way I see it in a way. I also have seen these same decisions being made by someone in a completely different building that rarely steps foot into the store. Does that even make sense?

Chris, It really is a two-headed beast, but the result is that many store level managers are much less involved in marketing their store and their inventory than they were 10-15 years ago. Responsibility for marketing has been transferred away, but these managers are still responsible for the results - the units sold and the resulting profitability. My advice is to get engaged and modernize your skill set starting today.

SPOT ON! Something that is so true but I didn't think about it until you just mentioned it here. Something I will be sure to point out in coming weeks... Thanks!

Communication among all department heads is and will always be essential to a successfully run business. Also, informing your sales force about the current or upcoming promotions give your customers a seamless experience and better chance to close more customers!

As a responsible parent, I did my part of sending my daughter to an efficient driving school and even gave her tips on driving and simple maintenance myself. While cars in the U.S. are mostly automatics, I preferred to teach Nella (my daughter) on a stick shift. I wish to buy her a new Mazda, but I guess it is better for her to drive a used car for a while which I bought from http://www.automotix.net/bargain_cars.html. In this way she can get a thorough hang on the car controls before she can switch over to her brand new car.