In my many discussions with dealers, the one question that invariably comes up is “What is online retailing, really?” They’ll then begin to tell me how consumers can already buy a car online from them. They have a widget with which a consumer can get their trade value. They have an online payment calculator. Customers can submit a lead, get a quote online and even correspond with Internet Managers and then come to a price agreement before they even come into the store ….This is the point in the sales cycle that I like to share what online retailing is to your customers, what they expect and why this heightened experience is getting such huge consumer adoption.

You see, despite all of the technology now available for dealers to use to (supposedly) make online car buying easier, our research has found that this mish-mash of widgets plaguing auto dealer websites simply doesn’t work and actually may cause confusion and offer additional exits from dealer websites, without getting the valuable engagement, trust and lead info.

Sure, I’m told that dealers are getting some leads from them. People are using their trade value tool. They’re converting. I’ll sit back. Listen. Then throw this out there: Our research shows that while your customers are using these tools guess what they then do … they leave. In fact, we’ve found that there is a 200-300 percent ‘missed opportunity’ because of these widgets. Why? For a couple of reasons:

1. The customer uses your trade-in value widget -- which in many cases is really only a frame-in of a valuation company’s site such Black Book or Kelly Blue Book. They input their vehicle information then discover that their vehicle isn’t worth what they thought it would be – much less in fact. They decide to sell it on Craig’s list …and they leave.
    
2. The customer is only interested in a specific car, goes to the VDP page and starts inputting figures into the online payment calculator to find that the payment is too high based on the information they input. We all know that in the ‘majority’ of cases, there are a lot more factors that make a car deal than a singular payment option…and they leave.

These are just a couple of reasons. But if they are occurring on your website, they are causing you to lose opportunities. In today’s landscape, we as dealers must take a hard look at our websites and ask ourselves, “does our site gain the consumer’s trust, simplify the process and make the consumer ‘want’ to engage?”

The reality is that even with all of the technology available, we’re still in a people business. Only a small percentage of customers are going to be OK with the cold and mechanical process delivered by these widgets. On top of this, none of these widgets collaborate. There are multiple pieces for each and every car deal. Without human interaction with a customer during the information discovery process, in the majority of situations, there is no way for a car deal to happen.

Sure, the customer “could” collect each piece of information bit by bit and attempt to assemble a deal structure on their own – this is how much my trade is worth, this is how much my payments should be with this interest rate and this much down. But invariably when they contact the dealership, or arrive armed with the information that your website gave them, we all know what happens. Things change. When that happens, customers get upset.

So, to answer the initial question of what online retailing really is. Online retailing is simply an extension of how we sell cars already -- except it moves that process into a single online experience that is integrated, accurate and builds a relationship along the customer’s journey.

Rather than seeing a customer bounce from your website because they used your self-service trade-in value widget and it scared them off, offer a fully integrated online buying experience that moves them through the sales steps with interaction between the customer and your dealership. Find a tool that is Amazon-easy, yet fully integrated, so it is also Amazon-easy for your team members at your dealership. I believe that the consumer (in 95% of cases) wants to come to your dealership for the full experience. But only after the entire deal is finalized and you have earned their trust and respect. That is part of the fun! It’s all about, trust, respect and simplicity.

The customer doesn’t just want information, they want ACCURATE information and while they may THINK all that matters is how much you’ll give them for their trade, we all know that it’s the whole deal that matters, not just any particular piece of it.

Online automotive e-commerce should cultivate relationships with customers; build trust; create a great customer experience by avoiding erroneous figures or misunderstandings due to generalist information; and allow you to protect your profit margins and increase market share.

You would never pencil a deal and present any single piece of the deal puzzle without knowing the whole picture. But that’s exactly what many dealers are doing online with the many widgets created by coders and companies that have not ever set foot in a real car dealership.

I believe in this great industry and I know beyond a shadow of doubt that we must evolve our digital showrooms to a point where the consumer trusts us, experiences simplicity, and even awe, to the point where they will ‘want’ to engage. Then we must continue that experience at the dealership and employ team members who share that same vision. And THAT is what online retailing really is.

The automotive industry pretty much resets at the beginning for each month. I’m sure you’ve all heard the term, “hero to zero.” Well, that’s rather how it is – you are judged on your sales for the previous month.

So, what do managers do when they get nervous in the middle of the month – perhaps sales volumes aren’t on track, or inventory is making them nervous? They start looking to the one place that has the most traffic and the most potential to bring in sales – their website!

It is surprising that even today, while most GMs and GSMs can tell you how much floor traffic they have from their brick & mortar showrooms, from my experience, I find that many cannot answer questions that are increasingly more important – (1) how much unique traffic are they getting from their digital showroom; (2) what is their conversion to lead rate; (3) what is their closing ratio.

I understand how many responsibilities a GM or GSM has in the operation (35 years’ experience myself), but today we must make an oath to know these 3 numbers at all times. Have your internet director email these to you every Monday and noodle on those analytics. Most every GM I have met is a solid business person and will evolve their business in the right direction -- if they simply have these 3 numbers.

I just read an article that stated a mind blowing statistic: apparently, the automotive industry is the lowest converting industry for ecommerce sites at 1.7%!  How can this be when most other retail industries are converting at a 3-8% rate?

Imagine if, as a dealer, you were able to multiple your leads – on traffic you already have visiting your website – by 400%, you’d be interested then, right? If your conversion rate to leads is not 3%, I suggest spending some time researching available technologies that respectfully engage and fascinate your digital showroom clients via localized/personalized messaging; online retailing that provides the opportunity to engage from home with their own personal deal manager and auto picture technology that spoils and fascinates.

If other online retailing verticals can accomplish a 7–8% lead conversion rate, why can’t we? Today, I believe we can. We simply must think like an e-commerce site. Think like Zappos or Amazon, or any of the top 20 e-commerce sites in the world. They realize that the consumer is the boss – give them what they want and make the experience enjoyable and easy.

In most dealerships your phone is ringing off the hook. Perhaps the calls are sales calls. Or, just as likely, they are service or parts calls. You have it covered. You have tracking numbers on your digital showroom site (Website) assigned to each. You may even listen to those calls and take appropriate actions based on the conversations. But are you listening to the parts and service calls? There are services available that will listen for you and offer reporting.

Chances are good that some (lots) of those sales calls are ALSO service calls. Why? Because customers don’t care what number they call. They simply look at your website and call the first number that catches their eye! Tracking your website conversions based only on your Internet leads and sales calls (from a trackable number) is probably giving you an erroneous result – which, in turn is causing you to make decisions that may not be in the best interest of your store.

Do you want a simpler way of calculating digital showroom conversion? (If you don’t have a company listening to all calls). Take the entire quantity of your website leads and phone calls – no matter which phone number the customer called in on – and divide it by the unique number of visitors for your website. Use this math for 12 months while you evolve your digital showroom. Have your internet manager examine where the actual digital showroom (website) leads are coming from and track the rise/fall.

The fact is, dealership revenue isn’t produced by sales alone. You WILL get sales calls on your service and parts lines. Regardless of WHY the customer is calling, every last one of them represents revenue to your dealership. They all matter.

Evolving as a GM for the new digital business model is not hard, you really only need these 3 factors and then begin researching technologies that make sense to the consumer. Trial and error is necessary and expected. I guarantee that once you pay attention you will find renewed enthusiasm and see even more potential to take market share, among other benefits. Remember, stop thinking like a dealer for a moment and think like a customer. We have more than enough traffic!!! I guarantee that there will be low fruit for the picking.

By now, I’m sure you’ve heard about Amazon’s entry into the automotive world… something I predicted quite a while ago and covered in previous blogs.

For the moment, Amazon is functioning as simply a new research portal where consumers can find information and communicate with each other about vehicle models, features and reviews. However, this is simply stage one. Amazon is a VERY successful and trusted brand and will eventually seek to monetize this operation. How they choose to do that or, better yet, how they choose to EVOLVE this service remains to be seen…. but I have my ideas.

Speculation and opportunity run the gamut from becoming a third-party lead provider, to partnering with OEMs (for example, the Hyundai partnership currently in operation whereby Amazon Prime delivers an Elantra to consumers for a weekend test drive), to perhaps a dealership direct subscription model where dealers pay for branded geographic areas. There is even a scarier platform potential that I won’t share quite yet.

Regardless of which path is taken, OEM and dealer-specific ads are already appearing on vehicle information pages delivered by third party advertising networks. So Amazon is already actively collecting a little money through those partnerships.

However, right now, Amazon is simply in an information provider mode.

Because reviews are an important piece of the information that Amazon provides, I did some research on this and discovered that in fact, reviews for vehicles go back as far as March 2016. As this service was officially launched on August 25, 2016, I was curious to know how these individuals left reviews and whether they are legitimate. Through a quick, brief investigation of reviewers, I came across one reviewer of a 2016 Toyota Camry who also left reviews for a 2012 Chevrolet Volt, a 1989 Toyota Corolla, a 2016 Toyota Camry and a 1991 Toyota Previa, all in a 3-hour time period! Whether this is a case of false reviews, or simply an over-ambitious reviewer, is yet to be determined. Regardless of which, the biggest key here is that everything is done under the Amazon branding. However, I do not believe Amazon would want to open their brand to any criticism if false reviews permeated their platform.

What does that mean for dealers? For many years, Amazon has been the innovator as far as making the whole buying process easier for consumers – from two-day delivery, to next day, to one-hour delivery – Amazon is completely focused on being the go-to source for everything a consumer could want, be it groceries, liquor or restaurant orders delivered direct to their doorstep in under an hour in some cities!

Amazon’s entry into the automotive world is not unlike their disruptive entries into these other markets. I am sure their ultimate goal is for consumers to ONLY BUY GOODS THROUGH THEIR WEBSITE AND APP! So given this fact, wouldn’t it be logical to conclude that Amazon’s long-term play is for consumers to buy cars through their e-Commerce site – even if they choose to own brick-n-mortar stores?

I’ve been tracking this progression and have warned dealers for quite some time now that this was coming down the pipeline. It really is time to get better at the whole online vehicle selling process!

Collectively, we must continue to earn back the confidence and trust of the consumer, or be subject to a massive change in one of the greatest industries in the World. Remember, today almost every business thrives or dies depending upon the consumer demand. Today they demand convenience, simplicity, trust and a friendly environment. Amazon has it all and now, so can we – it’s all about relationships and delivering the experience today’s customers want!

You need more than just a third party app. I believe that a very high percentage of car buyers still want to communicate with a trusted advisor at a dealership. Do you offer your customers an online buying experience that actually converts, that consumers embrace and which enables you to retain your fair profits?

If you want to be competitive, now and in the future, you must give people what they want -- which is very simply an Amazon-like car buying experience. So, I strongly suggest that you get ahead of the competition and, just as importantly, protect this industry for our future generations. Start giving it to them now before Amazon beats you to the punch. It is inarguable that that is the direction.

Cheers to the greatest business in the World today! Let’s preserve it and better yet, enhance it for all.

In the popular science fiction movie, The Matrix, the hero Neo is presented with two options by the mysterious Morpheus – the red pill or the blue pill. By taking the red pill, Neo would be enlightened into the real world. Whereas, if he chose the blue pill, he would remain peacefully ignorant of reality and continue to live in the fantasy world. If you’ve seen the movie, you know that Neo chose the red pill and was awakened into a future world in which technology had taken over and humans were… well, I don’t want to spoil it for you if you haven’t seen it.

My point is this -- as dealers we’ve been taking the blue pill for far too long. Most other retail businesses are embracing technology and have a huge head start on catering to the wants and desires of today’s consumers. While the auto industry has stubbornly clung to the old ways of doing business. Wall Street finally took notice and, once Warren Buffett entered our industry, things started changing. Not necessarily for most dealers, but for the corporate Wall Street owned retailers who DO use the same technology that works in other retail sectors and apply it to the automotive industry. They’re figuring out and solving problems that we’ve ignored for too long. This has opened doors for tech start-ups to encroach on the market share of dealers who normally wouldn’t have much to worry about.

Think about the evolution of marketing in our industry. Let’s take vehicle inventory marketing as an example. It wasn’t too long ago that one or two pictures of a vehicle on a VDP or listing site was acceptable. Then progressive dealers started taking 40 or more pictures which quickly became the norm. Then video was introduced, beginning with stitched video and progressing to live video walkarounds.

What’s next? Well take a look at most high-end retailer’s websites. When you look at a product page (the parallel of our VDP), they provide the ability to zoom in on a picture to look at small details. Many also offer 360 degree interactive photos. I know what you’re thinking: “We don’t need that!” But guess what? You are wrong. Don’t believe me? Just check out Carvana’s website and one of their VDPs. They offer 360 degree interactive views of each vehicle on both the outside AND the inside of the vehicle!

Now, using this example, why should you care?

Because that’s what consumers want! Look, it wasn’t all that long ago that NADA told dealers if they captured 2-3% of consumers on their websites they were doing a good job. Well, I’m here to tell you that result is no longer acceptable.

Many vendors want to sell dealers MORE traffic to their website. However, the fact is that dealerships already have enough traffic to improve their business margins – by a huge amount. The average dealership will get 10,000 visitors per month. That means if they are capturing just 2-3% of these, most are missing out on 9,700 of their website visitors!

So, that being the case, how do you get those 9,700 people to stop on your website? Through technology… just like every other retailer. By using technology, you can impress your website visitors enough to make them stop.

Put yourself in their shoes. Why are they passing through? It’s because you aren’t giving them a compelling reason to stop. Photos and video are great, but they don’t give consumers the ability to virtually walkaround the vehicle in a continuous motion as if they were on the lot.

The broken images don’t let them see that little dent, scratch or other imperfection. Or, even better, the fact that there aren’t any. What do you think is going to increase their interest in your vehicle? The ability to see its actual condition!

Online transparency in your vehicle merchandizing is more important now than ever before. The technology that other retail sectors use to allow consumers to spin the images and get 360 degree product presentations is available right now for YOUR inventory. Not only is it available, it’s also cost effective and very easy to use. In fact, it’s so easy you will probably find you no longer need that outside photo service and actually save money while providing a more transparent and better customer experience.

Consumers are constantly flooded with messages everywhere they go, from billboards to direct mail, to websites, banner ads and email. Most of these messages are disregarded, ignored or, even worse, never seen, because, for the most part, the message itself is not relevant.

So, along came retargeting, which can continue to follow the customer around the Internet and, if done right, can produce great results. But, the problem is that you never know – for a fact – if it’s really relevant or not.

Then came geo-fencing.

In the beginning, geo-fencing was controlled mainly by the cell phone carriers, who could identify where a particular person was at any point in time. Consumers had to opt-in to receive push messages from carriers and the cost of entry for businesses was limited to large national brands. For example, a customer walking into Nordstrom could receive a push message welcoming them with discount offers.

Then geo-fencing evolved on a local level with beacons businesses could install which enabled them to push messages to customers at (or near) their business. The downside to this technology is that the customer first has to download and install an app on their phone.

However, geo-fencing has now evolved beyond those limitations and is a VERY cool and effective technology you should be using, because it is simple and effective!

Businesses no longer have to buy-in with a cell phone carrier at ridiculous amounts, install beacons and then hope that the customers have a particular app installed. Technology now enables you to geo-fence and target customers no matter where they are – on your own website – without an app. And you can even modify any campaign on the fly.

I recently wrote a blog about the highly effective ways geo-fencing can be used to create, communicate and capture corporate business. But it goes way beyond that.

Nowadays you can target entire communities. For example, a resident of “Pleasant Hills Meadow” that visits your website could receive a personalized message; “Welcome, Pleasant Hills Meadow resident. At XYZ Ford, we have a special discount program just for residents of your community!” This would certainly pique their curiosity. It makes your website personalized, dynamic and relevant. And, best of all, can be done with a simple website plug in – no app download required.

And what about shoppers right on your lot? Showrooming is now commonplace. Consumers are on your lot, viewing your inventory and using their smart phones to price shop your competition down the street. You can target these customers when they visit your website with a welcome message and perhaps a discount offer if they come in and present it to their salesperson, or a manager, to entice them into the showroom and away from your competition.

Or, even better, what if the customer is on your COMPETITOR’S lot, considering one of their vehicles while doing a bit of showrooming, and they happen to end up on YOUR website? What if you had a tailored message that popped up on their phone inviting that customer to your dealership with a discount offer? How strong do you think that would be?

The best part is that it doesn’t matter where YOU are, it only matters where THEY are.

Another hidden gem in regards to this new technology is the fact that it increases site conversions. Most dealers are still spending a fortune trying to build up ever larger numbers of visitors to their site. This personalization factor however, allows you to optimize and convert the traffic you are already getting – in the long run saving on marketing costs, while also increasing sales conversions.

Geo-fencing has evolved beyond big brands and there is no longer a need to have an app downloaded and installed by the consumer. You can now target whoever you want, no matter where they are, with relevant messages that prompt immediate action.

This is powerful marketing, something that is immediate, relevant and offers the consumer a call-to-action that is applicable to what they are doing…. RIGHT NOW. You want a competitive advantage? Be where your customers are and offer them something compelling right when they desire it. Conversion rates skyrocket and you smile at the end of each lucrative day.

I frequently talk about the current industry disrupters taking sales from dealers – the Beepis, Vrooms and Carvanas, amongst others. These companies snuck up on dealers and, with little warning, jumped into the spotlight and sucked investors into a future Nirvana of car buying bliss. They are currently blasting feel good messages to consumers portraying car dealerships as inconvenient -- pushing a message of an easy buying experiences which, unsurprisingly, consumers (and investors) have eaten up.

While they may not have yet gained much market share, their strength lies in one simple fact: the message they broadcast to consumers is effective. We have the technology to sell cars in the exact same way and deliver the exact same experience. Yet, deserved or not, sadly, dealers have a perception issue with consumers. So, who do you think consumers will believe first? You got it.

What we have yet to talk about is who the future disruptors will be. We can’t prepare ourselves if we’re not constantly looking on the horizon. Well, guess what? The horizon is staring us right in the face and if you thought Carvana, Beepi and Vroom were scary. These will give you a heart attack!

Google. Apple. Microsoft.

Any one of those entering the automotive industry would be a powerhouse -- but all three?

You may discount their efforts with arguments such as, “it will be a long time.” Or, “it will just be autonomous cars,” (which nobody wants). Or, a number of other excuses to ignore them. However, the fact is that these companies did not get to be industry giants by making things people don’t want. Remember the iPhone? When Apple first developed it, all of the other phone manufacturers predicted a flop. Well, we know how that went!

Let’s take a look at some of the recent events that have occurred with these companies:

• Google: Google is already testing driverless cars and have partnered with OEMs to assist in their manufacture. The company even plans to open a facility in Detroit to be near their “partners.”

• Microsoft: While Microsoft recently said that they were not personally entering the automobile business, they expressed their support and encouragement for other companies to do so and have offered to assist automakers.

• Apple: Probably one of the worst kept secrets is the Apple Car. Of course, Apple denies that one is in the making -- all while hiring automotive-related experts, investigating charging stations and filing patents that would suggest otherwise.

Two of these tech giants – Apple and Google – are already fortifying their positions within the industry through the integration of their software via Apple’s CarPlay and Google’s Android Auto.

While Apple is notorious for being uber-protective of its operating system, with the popularity of iPhones and consumer demand for integration, automakers are adopting and installing this technology into vehicles. Apple will decide what features, updates and apps will be allowed and automakers are already seeing a loss of control of their own vehicles.  

And we can’t forget Tesla, who are already fighting tooth and nail for its direct-to-consumer sales model. And in some places… winning. Now they’ve partnered with Nordstrom to build showrooms within Nordstrom locations!

Why throw Tesla into this mix? Do you really think that Apple or Google are going to start car franchises? Could they perhaps be waiting patiently, allowing Tesla to fight the battle over direct-to-consumer sales so that their path is clear when vehicles are ready to be sold? Let’s just say you won’t ever be seeing a Google or Apple car sitting on a FCA dealership lot.

So, we can sit back and dismiss the current companies disrupting our industry, taking sales and winning customers with easy online buying experiences. And, we can also ignore the threat to come from tech giants with deep pockets who, I guarantee, have no plans to lose in this market place. Or, we can take action now to stem the bleeding and take back what is ours by using the very same tactics that they’re using to win our customers while making sure our eyes are open to future threats that are certain to come.  

Automotive Online Retailing (ARO) is just now gaining inroads into the retail automotive space. And it is important to recognize that. We do not have to challenge or reduce our margins. As a matter of fact, we can gain margins. Customers will buy more, and they will buy more often, if their confidence is high and if their experience is pleasurable. Enough facts and research studies have been released to prove that.

We simply must gain consumer confidence and smooth out our processes while protecting our margins. For the majority, I promise you it is all about the process, the ease and simplicity, the transparency, the relationship and the enjoyment.

I write this article simply to offer you a look into a potential future. There is no doubt these tech giants have earned consumer confidence and, if they follow Tesla’s lead with their autonomous cars, our OEM’s and our dealer brothers and sisters will have their hands full.

I say “start now!” The future is clear and consumer demand is overwhelming. We can become better dealers in a myriad of ways. We can and must earn consumer confidence. I talk with Owners and GM’s coast to coast and know that dealers are making record profits today, and that is wonderful.

However, I specialize in peaking around corners and searching for trends with teeth. ARO is here to stay and the Amazon-like or Apple in store experience should be our goal as dealers -- along with becoming more efficient -- and yes, even more profitable. Have you seen the profits these tech giants make?

Enjoy your record breaking profits today. But know….this too will pass. Prepare for the inevitable.

Today I want to talk to you about a potential future I believe is rolling towards our industry at an alarming speed. You see, what I do, is I peek around corners looking for trends that have potential teeth and which could impact the automotive industry. 

Recently I have become very concerned, as there is one particular trend that could be with us in the very near future - as a matter of fact it could be with us extremely soon. Allow me to clarify…

Recently I was at an Oregon Auto Dealers Association meeting as a guest speaker in Hawaii, attended by 300 dealers. As I started my presentation, I explained that I had some exciting news to share. I went on to say that a few hours ago I had received inside information that one of the largest publicly traded dealer groups had just merged with another company. This company was immediately changing its name and the announcement was to be made public in the very near future.

I went on to explain that this newly merged company will be creating a new logo and putting their name on all of its marketing and on all of the acquired storefronts coast-to-coast. They announced they were also going to be searching for even more dealers to purchase over the next 6 to 12 months, in order to expand.

I then hit a button on my laptop, bringing a new presentation slide up on the screen where a fancy logo spun into view, then finally stopped with the new company’s name emerging as:

AmazonAuto

I sat there quietly for about 10 seconds and looked out at all of the 300 dealers. Many sat there with a stunned look of surprise on their face, while others appeared to be more than a little worried.

My wife (who sat in the back of the room) later told me that she had overheard dealers in the background saying “Oh, S**T!”  That would have been my exact feeling as well, truth be told. I waited a little bit to let it sink in before putting them out of their misery by telling them it was not real, but simply setting the scene for the concept and concern I wanted to share with them that day. But one thing was for sure - it was NOT that unreal a concept.

I told them that, while this actually didn't actually happen, (I hope they didn’t tweet it out to the world!) it has a strong potential of happening as soon as today!

Warren Buffett came to this business because he found out our secrets -- that our profits are more than interesting; future profitability potentials are huge; the consumer confidence is low and that there are pain points that can be solved quickly allowing even more profits to be made, all while gaining consumer confidence and even consumer enthusiasm. Wall Street is slipping into our business - it's a reality. This could happen.

So tell me, what would happen, if all of a sudden one of these stores – an AmazonAuto Honda (or any make) popped up right next to your dealership?

We’re all making a lot of money right now. We’re breaking records. Our golden goose is still very fruitful. But wise voices are starting to say “This too shall pass.” Are we, as an industry, ready for that day?

Our industry has the potential of changing overnight. I think we need to prepare ourselves. Consumer confidence is something we need to gain. I invite you to think about preparing for the inevitable. Wall Street thinks we, as dealers, are too slow to change. We are the last business vertical, worldwide, that is still struggling to get into Automotive Retailing Online (ARO).

Online retailing is just now gaining inroads into the retail automotive space. And it is important to recognize that. We do not have to challenge or reduce our margins. As a matter of fact, we can gain margins. Customers will buy more, and they will buy more often, if their confidence is high and if their experience is pleasurable. Enough facts and research studies have been released to prove that.

ARO is a new focus for us as dealers. I believe we can become more efficient. I know we can have a different type of persona -- shedding any stigma of the past. We can think and do business like AmazonAuto, or ZapposAuto would, as Wall Street says, spend less and make more.

ARO also helps our efficiencies. We simply must gain consumer confidence and smooth out our processes while protecting our margins. For the majority, I promise you it is all about the process, the ease and simplicity, the transparency, the relationship and the enjoyment.

As I stated in the beginning, my job for more than 25 years with a large dealer group was to peek around corners and look at potential trends that may have teeth. As a GM, through my use of this technology, and results my team attained, I was able to prove that online retailing is a reality.

It is also one of the reasons I left a job I loved with one of the greatest dealer groups in the country. Because of my love for this industry, and the great people it employs nationwide, I felt it was almost my duty to go out and spread this word coast-to-coast about automotive online retailing and the need to continue to move toward a more efficient platform. I truly believe it is a vertical that is going to potentially be the most fruitful and the most important change within our industry since the Internet.

Contemplate the possibilities and prepare for the inevitable.

Disclaimer:

AmazonAuto.com currently exists as a reseller of automotive parts only, not as a retailer of new/used manufactured vehicles. The creation of the AmazonAuto logo and fictional emergence of Amazon as an automotive retailer is used only for illustrative purposes and does not in any way affirm or deny the possibility of Amazon entering into the automotive retailing arena. The Amazon logo, name and brand is sole property of Amazon.com, Inc. or its affiliates.

The market is calling Beepi, Vroom and the Carvanna’s of the world ‘Disruptors.’ I simply call them evolutionary companies that will assist in gaining consumer trust and confidence with the car buying experience -- and ultimately with dealerships.  

Today’s technology has made it a snap to buy most goods online and this has conditioned consumers to expect ease, transparency and speed with all their transactions – this is the way they (and I) prefer to do business. As a result, consumers are rewarding dealers and technologies that create a better car buying experience.

Maybe it is time for us to pause and look in the mirror. To examine just what these ‘disrupters’ are doing that dealers can’t. The answer is: Nothing! Dealers have the ability to offer every convenience these disrupters are offering -- and much more.

Let’s take a look at a couple of quick and easy examples:

1) Home Delivery: All of these services – Beepi, Vroom, and Carvana – have home delivery. Many dealers, however, shy away from offering this for several reasons. First, in many states, contracts executed within a residence have a 3-day right to cancel the contract. And secondly, it’s much more difficult to close a higher pencil, or sell accessories and other back-end products, if the customer isn’t physically present.

However, we all know that if we sign at the customer’s home or place of business, and if that customer came back in 2 days, or even 2 hours for that matter, to return the car, most of us would take the car back. With the power of CSI, review sites, social media and the reach of consumers today, most of us understand this. And. Let’s not forget that Beepi, Vroom and Carvana allow a full ten days! The fact is that according to recent studies, this IS what customers want.

Then there is the fear of losing margin. It’s easier to hold margin when the customer is in front of the finance manager. I would have to agree with that (being in retail 35 years). But, I am told that is simply not the case. WE have dealers doing home delivery and their backend is not affected. We must learn new ways to use simple technology to simplify the consumer experience and increase their pleasure, while reducing their pain. Dealers I work with tell me that after a deal is finalized, a simple email link with all the accessories available for that model works well. Then a finance manager simply does a join.me screen share and makes his/her presentation, prints the paperwork and the salesperson is off to the customer’s home to collect a wonderful review and CSI score.

So, why not offer home delivery and a 3 day right to cancel right up front? Sure, with some manufacturers you may not be able to RDR that sale for 3 days. But, in the grand scheme of things, that’s a far better consequence than having the consumer run all over your social media properties with vengeance on their mind. At my former dealership, we offered a 3 day right to return the car and it worked wonderfully. The marketing statement was worth so much more than the 1 or 2 customers that took advantage every quarter. The fact is, very few people ever took us up on it. It may sound scary, but in reality the marketing words “3 day money back guarantee,” is so much stronger. And, sooner or later you will probably be doing it anyways, to stay competitive.

2) Off-Site Test Drive: Another differentiator that consumers want, but many dealerships hesitate to offer, is an off-site test drive. It’s always about “get them in.” When it should be, “let’s make it as easy as possible for the customer to do business with us.”

In fact, pulling someone from the floor and sending them with a vehicle for the customer to test drive accomplishes many things – it leads you closer to selling a car – it says so much to the customer about your dealership and it may separate you from your competition.

When I was a salesperson, I was very successful, and one of my secrets was that I always offered to take the car to the customer for the test drive. That person who won’t commit to an appointment because of work or busy schedules may very well be willing to let you bring the car to them – and they’d probably be very impressed and appreciative. Who would you want to buy your next car from – the dealership that’s all about “when can you come in?” or the dealership that went out of their way to bring the vehicle to you to test drive?

Being in retail, I understand that change can be difficult. But, evolution in our industry is exciting. To thrive in today’s business climate I believe dealerships need to focus on being as consumer friendly as possible. Make it easy for people to buy cars from you. That is the unique selling proposition that the disrupters market. If you follow suit and adopt practices that make it just as easy for consumers, the marketing message of these disrupters won’t have much power any more. We have many more dealerships than there are disrupters. We also have the power of brick, mortar and service. And the fact is, the consumer still wants to walk our lots and enjoy the excitement of all the new car smell, colors, shapes and sizes. Those disruptors that deliver only one car for a test drive just can’t compete with that.

Implementing Corporate Benefits Programs (CBP) to employees of small/large corporations is nothing new. Manufacturers have been doing it for some time -- Ford’s X-Plan pricing, for example. But, typically, these corporate discount programs are isolated to large national corporations with which the OEMs have successfully partnered. What if you could increase your market share by offering an instant CBP to local large corporations, colleges, military bases, warehouse or distribution center that are conveniently located near your dealership? Prior to technology just introduced, it was close to impossible – now it is instantaneous!

In the past, a fleet manager would typically attempt to reach out to these companies to get their offer mass communicated to employees via e-mail. Or perhaps get it included in a company newsletter. But, it can be highly competitive as many retail companies in the same area may have the same idea. In addition, human resource departments for these companies can be difficult to convince. And then there is the rest of the red tape that kills most of these attempts – I know, I did it at my dealership for 5 years with special employees hired to do nothing but build these relations.

With the advanced targeting of social media platforms, some aggressive dealers have been able to reach out to these employees with a bit more success. However, these efforts are hit or miss. In addition, if your dealership doesn’t have a perpetual social media ad campaign that is continuously targeted to these individuals, it’s very likely that they won’t remember your program when it comes time for them to buy.

Beacons, and other technologies, have also arrived on the scene. And, while these technologies sound great, the challenge is that consumers must already have an app installed on their mobile devices to receive your messages and push notifications and they must be turned on.

And then there is “Geo-fencing.” The original technology has been around for a while. However, unless you’re advertising with a major cellular carrier, and the customer has opted-in to receive push ads, the chances are pretty good that only a handful of consumers will receive your messages.

But there is a solution dealers have been using for a while now that works! The evolution of geo-fencing has actually taken dealers to a place where they CAN target these employees without the need for beacons or apps on the consumer’s phone. Through one simple website line of coding, this exciting, and highly innovative technology, can exist on your website as a simple plug in widget. It immediately welcomes and notifies a consumer in your target fenced area, such as an existing corporation/workplace, of a special benefit that is relevant to them whenever they access your website within the boundaries of the established geo-fence – mobile or PC.

Imagine an employee at a local business or corporation clicking onto a dealer website to surf for cars (on a break of course, wink-wink) and seeing a unique welcome message with your dealership’s name informing them of an employee discount program for their workplace. This is shocking, exciting, useful and relevant to that employee. Those things combined provide a powerful incentive and an engagement that’s hyper-interesting for that car buyer. That same

geo-fence technology can work regardless of the device the consumer uses to accesses your site, which makes it even more powerful.

This technology has possibilities far beyond a simple outreach to an employee of a specific company. It can be used to target welcome messages and unique incentives to neighborhoods, cities, or even competitors. Consumers are shopping online in droves. The ability to push a relevant message to them in real-time the moment they access your website represents an incredibly powerful engagement tool. It enables you to instantly build trust and a type of relationship you did not have before.

If you haven’t researched this technology, it should be on the top of your to-do list. I am always amazed how we as dealers and GM’s have accepted a 2-3% conversion ratio. We just spend more money to bring more leads knowing 2-3% will convert. Doesn’t it make more sense to engage all those unique visitors you are paying to get to your site and raise your conversion ratio first? Geo-fencing technology has evolved by leaps and bounds -- to the point that it is a no-brainer for dealers and has become a necessity.

Geo-fencing technology allows you as a dealer to stop trying to be all things to everyone with your marketing messages and start being the only thing that matters, by delivering the right unique, pertinent message to every consumer at the right time. Research geo-fencing technologies and do not jump om the first technology that claims a solution. First and foremost the most important things to look for are solutions that offer no apps to download or advertising messaging inside social media or on ad sites. This must be no strings attached and the fence must be small enough to fence a small business and must also work on both mobile and PC. It just makes perfect sense. We all like to feel special and have unique and pertinent messaging delivered to us – now you can.

I left a 35 year career in automobile retail management eight months ago. I worked as a GM at Dick Hannah, one of the greatest dealer groups in the country, and I loved every moment of it.

I have had many mentors in my life, (grateful every moment for all of them) but I was told by a specific mentor to constantly look in the mirror. To take a look at our dealerships and our lives often, and really define who we are today. To be painfully honest, then create a vision for who we want to be tomorrow. We CAN create a great, open and interesting work environment focused around consistent improvement and positive recognition. One that has every right as a responsibly conscious and capitalistic company to a reward; that is both financial and experientially heightened for both our clients and our team members.

In my humble opinion, one of the founding ideals in our dealerships that will determine our growth and evolution is our personal commitment to consistent improvement. And, that starts with the focus on what everything revolves around - the Consumer experience.

You’ve heard it a thousand times: “The business has changed.” And many times you hear that in a negative connation. I feel quite the opposite, as this next chapter in automotive excites me unlike any other time in the history of automotive (and I was one who lived through those wild & crazy decadesJ). Why have Amazon, Zappos and several Apple-like companies experienced record setting success? With Zappos, it is not due to their shoes, as they don’t manufacture them. They simply offer the best customer experience. And take a look at the great many rewards they have received form that singular focus. It is the ONLY shoe company I even know the name of today.

I have learned that a commitment to consistent improvement starts with a good look in the mirror, and a personal commitment from you the GM/Owner/Partner. Who is your dealership today? Take a minimum of 2 hours and a piece of paper in a quiet place. If you, as the dealership’s executive are committed to consistent improvement, what vision do you have for the dealership tomorrow?

The secret ingredient to thriving – holding your margins while creating a unique customer experience? Solve the consumer pain points and create more pleasure.

Here are a couple of steps I suggest that you take to help accomplish this:

Step 1 - Get your management team together and secret shop yourselves. The digital world rules. And, as we sit here in 2016, every dealer knows that is inarguable. So, be sure to include your online and offline sales process. Make secret shopping mandatory and give your management team deadlines to get it accomplished. If you’re interested in evolving your culture and improving your customer experience, create a worksheet with questions that must be answered about the experience they had when going through your process. Or, you can use mine instead. I’ve created a worksheet that you can use to evaluate a dealership through secret shopping. Feel free to download it here:

Create fake e-mail addresses so each participant can remain anonymous. And then see what happens. Once the results of the secret shops are in, reassemble the management team and discuss what was found. Collectively identify pain points that exist in your process. And, as a team, take steps to create the perfect and most respectful customer experience that will not jeopardize your margins. Practice this every quarter and mandate it from your executive team. To become the dealership that you have envisioned, you must continuously monitor your processes and customer experience.

Whatever the results are, you the as the leader are to blame. If the results are great, it is your fault, and vice versa. Accountability is imperative to the health and wellness of any organization. There are new variables introduced into dealership environments all of the time – employees come and go, attitudes change with life experiences, an employee may be going through a rough time – all of these can have an effect upon your customer experience. Ask your management and your entire team to be sensitive so that nothing affects the experience of their customers. Do this often, as repetition is key.

This exercise works, but only if it includes of all of your management team and they share your vision. It might be difficult to hear some of the things that come up, or that are discovered during this process. But, just realize that you cannot grow or change if you don’t know what’s wrong.

I highly suggest you and your executives get an eye opening look at your dealership through the eyes of the customer, before moving to step 2. Sometimes it can be hard to accept how customers really feel about the dealership experience when you first start this journey. Be the customer and be open and honest with yourself.

Step 2 – Provide executives with copies of the Zappos book “Delivering Happiness” and give them the job of reading it in the next 10 days. Create a meeting 10 days on, and ask them to bring 5 ways to improve the customer experience in their department. Ask them to get ideas from their team members, if they like.

After pondering the secret shopping, and the suggestions from your executive team. And after reading “Delivering Happiness,” create your master vision. Share that vision with your mentor, and/or peers. Then get your team together and get buy in for a common shared vision. Challenge them to do more with less – It’s not about breaking the bank. Talk with your executive team and let them know that together you would like to tackle and win an improved consumer experience in all verticals in the dealership. Get their buy in and listen to their thoughts on the subject.

I love this great industry – we have some of the greatest people on planet earth. I hope these suggestions help. To your success.