Protecting dealer margins while innovating the car buying process

Matthew Pavy
I just finished an article about the Buffet auto group acquisition and was not shocked by the numbers presented by autotrader about the state of our industry. Here is the site out of 4,000 shoppers said they didn't like the buying process - 70% of respondents said they liked the idea of a "test-drive center" at which they could try multiple vehicles in a single location; only 19% said they like the typical test-drive experience.-14% of respondents prefer to negotiate on the lot; the other 86% would prefer to do it online.There are plenty of people advocating an overhaul of the whole industry and that argument has been going on for a decade or better. Dealers will most definitely need to make some changes in store processes and how they manage the "customer experience". When people start mentioning a whole lot of changes the first thing those in charge think is my tiny margins are going to shrink even further. Well that's exactly what I don't want to happen and have been working on for the last 8 months. This burden of change should not be solely fitted on dealers shoulders, even though that's where most of the change must occur. This change should come from new technology and software that has the dealers interest in mind as well the consumer, it will bridge the gap and meet the dealers halfway or even further. I can assure you that if we as an industry; OEM's, dealers, vendors don't work towards a common goal then you will see companies like Carvana, and Tred take a sizable piece of the sales revenues along with the financing and warranty revenues.These companies are solving a problem that is why they are gaining traction. I know it may seem like a pipe dream but what we have been working on is Customer experience management solutions with the help of new technology that will provide a personable, relaxed, and trust building environmentwith out costing any or much more than what most dealers spend today. Hell we all have had that deal where we are a $1000 dollars or more apart and end up throwing in a year of oil changes and some hats and the customer closes. Perception is what we must focus on, not for the sake of deception, but we have a big trust gap to hurdle and when we do the buyer will be more apt to use our service, send their friends and one I was surprised of in the article was shorten their trade cycle.Profit is not a dirty word. We must talk about value just as much as pice.What processes can you as a dealer start now in preparation for the coming change? "Change now while times are good," Schwartz said, Cox Automotive president "Give customers the control they want and the convenience they expect," Schwartz said. "This business is changing rapidly. Things are happening daily and we have to embrace them."That's my 2 cents, Matthew Pavy Twitter: @Socialmobil
Matthew Pavy
Chris I would definitely agree with the statement that millennials are desiring more value and convience rather than price be the default. Most definitely what happens on the lot matters and it is crucial that dealers provide an experience that makes the customer want do business with them. The avg auto shopper, depending on hours spent researching vists 2.6 dealerships there is also an age filter in there. The lot is still a big part of the process. Find ways to put the customer first and treat them fair then it will return ten fold in exposure by word of mouth which is the best type of advertising.
Jonathan Dawson
We all have an opportunity to make an impact on the customer and transform the experience. That is ultimately what customers want. They want a new experience that is customer-centric.

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