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Jared Hamilton
From: Jared Hamilton
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Joe Orr

Joe Orr President / CEO

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Online Deal Creation – Consumers Have Wanted an ‘Easy Button’ for Years

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There’s little doubt that the experience provided by auto dealerships in the past has jaded consumers into a stereotype and perception that isn’t necessarily accurate any longer, yet continues to persist. Because of this perception, companies such as Beepi, Carvana and more are creeping into the automotive space and threatening to snatch sales away from dealerships. (how? by providing customers the ability to purchase their car online) These companies pose a true threat as they are luring our customers away – and make no mistake, these are our customers – through messages of convenience and an excellent customer buying experience. Carvana was just named #5 on Forbes list of America’s Most Promising Companies. The hundreds of millions invested in these companies show that Wall Street believes their business models are viable.

 

Online deal creation is simply a response to consumer demand. Consumers no longer wish to spend hours at a dealership in confrontational situations with salespeople and sales managers hiding behind one-way glass. These consumers have more knowledge at their fingertips than they have ever had in history and that transparency is only going to grow. We have countless studies that prove that only 1.5% of consumers expect to be satisfied with their showroom experience when buying a vehicle, and that is the truth - not a manipulated CSI report where the sales person begs for 5's and Y's.  This is a failure on our part and the catalyst for these online auto sales companies that are creeping into our space, taking our sales and resulting service and parts business.

 

It wasn’t that long ago that dealers didn’t think they needed a website - we all know how that worked out. As consumers have become more conditioned to shopping online for everything from luxury items to toilet paper, our industry has been the last to embrace this trend. If dealerships don’t wake up and understand that consumers will buy things the way they want to buy them, we’ll only be helping these other companies gain ground. There is no reason for this to happen. The technology exists today to facilitate a similar (and superior) online buying experience as the disrupters entering our market. Embrace technology to provide the same type of buying experience as these start-up competitors and you could literally stall their momentum. Dealers will always have the advantage with a physical inventory. And, consumers want to touch and feel a vehicle prior to purchasing it. Frankly, there aren’t many consumers that want to spend tens of thousands of dollars on a vehicle without even seeing it or driving it first.

 

It seems that the fear dealers have adopted concerning online deal creation stems from a perception that they will sacrifice gross in the deal. I can tell you for a fact that this is simply untrue. At Dick Hannah, we implemented this online deal creation process to massive success and profitability.

 

I think there needs to be more discussion about the "Evolution of Culture' in our dealerships. The entire staff must get behind this evolution - every dealership needs a champion. Which is it, the whole dealership or a champion? We must study these platforms, learn and adapt to satisfy consumer needs/demands and send these Wall Street companies packing!         

Donna Bavely
How long have you all been offering this and how do you get around the sticker price issue? I yelled hallelujah when I read the paragraph abt maintaining gross!
Joe Orr
Hi Donna, I utilized Virtual Deal in the store was a GM at. I used the product for 4 months and then after 25 year at my store (Love that store) I left to take this product coast to coast. We get around price by not making it an issue. Our Virtual Deal / internet prices are more than fair. We make it all about the experience and the ease (Easy button) that our product offers the consumer. Feel free to call if you want to dive in deeper. 360.798.6727

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