Who's seen Carvana's newest ad? I can already predict the responses.

They're directly communicating to the feelings stress in shopping with a dealer. 99 out of 100 shoppers EXPECT some level of hassle, yet, plenty of dealers still believe that they can get away with the same level of friction they always have. And when that doesn't work, they blame everyone except themselves.

Dealers blame millennial buyers. They blame government regulations. They blame the economy. Nobody blames the fact that the majority of dealers are years behind the curve in their omni-channel experience.

Branding is something you feel when you think of anything. A person, a dealership, a company, anything. We live in a world of influencers with "personal brands".

A brand needs to be more than a guy on a lot yelling that he has the lowest prices. The shopping experience can't force shoppers to sit in your building for hours doing paperwork and dreading the experience. Even people in the industry don't like they buying process.

Better experience starts with better branding and goes hand-in-hand with making sure that branding is felt in the customer experience.

Three household names. Three brands with opportunities to innovate. Three bankruptcy filings.

It might not be common knowledge, but Kodak actually invented digital photography in 1975. However, when the bulk of their profits came from film, what logical reason was there to advance the technology that would diminish the lion's share of their business?

The same can be said for Blockbuster. Blockbuster rented movies and charged late fees. After interest in a particular movie started to die down, they supplemented their business by selling the previously rented movies at a lower price than new DVDs. In 2000, Netflix offered Blockbuster the opportunity to acquire them for $50 million. Today, Netflix nears a $150 BILLION market cap while Blockbuster continues to operate a handful of stores in Alaska.

What could have these industry giants done differently? They could have paid attention to their customers; identifying and assessing how they would be served best. The "deafening and scary silence", as Dale Pollak puts it, in the lack of dealership conversation about self-driving cars, ride-sharing-services, online and direct-to-consumer retailing, and a list of other things is truly terrifying.

Opponents of any change to the current dealership model cite stats that most consumers wouldn't buy a new car with a 100% process, but they ignore all the data that says the majority of shoppers are frustrated with how long the process is, over half of shoppers feel anxious in dealerships, and that in the average of 24 touchpoints before a car is purchase, 19 of those touches are online.

Yes, people still want to kick the tires before signing the paperwork. That doesn't mean they enjoy shopping in a dealership.

This is a call for change. Stop ignoring the data that disagrees with you and start paying attention. Our friend, Gary Vaynerchuk, put it best in saying that people will push back saying "Well it's 2019 and I'm not dead yet", but they're dead in 2022. Are those 3 years that important? Dying sucks either way.

Let's take a note from the industries that have failed before us and work together for the success of this industry. How can we collectively serve our customers better?

It's evident that a level of change is needed in the dealership model. We've discussed hiring better, branding better, and countless other things to make a dealership a customer-first business that empathizes with their community. But, many dealers still hide behind feelings that these changes are too big to execute to right now.

I have two things to say to that: 1) It's not going to be easy, but nothing worth doing is ever easy. 2) It isn't expected to happen overnight. This is a long game. If there was a tool that could reinvent business overnight, it'd be groundbreaking. But success is one step at a time. So let's start with a step you can implement today.

Thanks to all the advancements in technology, we have more data than ever. People are tracking their steps, sleep patterns, and a bunch of other stuff that they probably aren't going to actually analyze or fix.

But in business, there's still data that matters. Your used inventory manager should be able to tell you how long you generally hold on to a vehicle, which vehicles are selling best, and what they're usually selling for. Use this information to educate whoever is buying your used inventory. Dale Pollak uses the guiding principle to not buy anything for more than 84% of what you expect to sell it for.

For example, if you're selling a lot of family oriented sedans and you see a blue Toyota Camry come up at auction, you should know that your average used Camry is selling around $13k, you should know that (packs and reconditioning aside) you shouldn't spend more that $11k to ensure you turn the car around quickly and for a profit.

In the same mindset, if you see a red Mustang come up to auction, you should know that those are lasting 180-210 days on your lot and retailing around $22k. So once the auction gets past $18,500, stop bidding.

I know, you don't have any Mustangs on the lot. I know, it'll be cool to share on social media. I know, "someone" will want it. But is it really worth a spot on your lot when you could be better investing your finances into inventory you can sell?

The second practice to start your path to success is to set a cap on your inventory. Don't go to auction with the intent of filling your lot at whatever cost. Go with a budget. If your goal is to fill the lot, you'll make more thoughtful spending decisions. If you sent a kid to a candy store and said "what do you want?", they'll want it all. If you send them with $2, they'll start to decide if they really want more candy or better candy.

So I ask...do you want more inventory or better inventory? Either way, an educated look at your inventory purchasing will lead to better purchasing decisions.

No, it isn't your inventory. It's your people.

Turnover rates in the automotive industry are atrocious. Our founder recently spoke with Adam Robinson, founder and CEO of Hireology, and he passed along an anecdote of a time early in his career where he would train a dealership on software, just to have them call him back three months later because the staff he trained had all left.

Culture matters. If we can't keep employees happy, they won't stick around. If they don't stick around, we're constantly replacing them. This brings a vicious cycle of fighting to create culture in an environment that is constantly changing. How will we ever create anything effective in an environment like that?!

You might be saying "well, that really doesn't affect my business", but studies say otherwise. A 2015 study by the University of Warwick shows that happier employees are 12% more productive. Adam even suggested to consider how constantly being short-staffed affects your billable time. You could be constantly short one employee... or worse, you have your most proficient employee training the new guy and now it feels like you're short a team of people.

See...happy employees lead to higher retention and happier customers. They'll get personal service in a reasonable timeframe. The customer can feel the difference when an employee treats them with genuine concern for their needs. They don't feel they're being taken advantage or that they're only being taken care of on because a company policy says to check in with each customer twice.

Trust is valued significantly higher than price. Building a culture of trust with your employees will breed a culture of trust with your customers.

What do you think? Have you made any efforts to make your staff your priority?

Time is an often overlooked, and costly, asset in business operations. A company will often try to save a few bucks by bringing a service in house. (We'll stick to reconditioning for this example.)

Sometimes, it works great. The service team and the used inventory manager work hand-in-hand to make used vehicles frontline ready while ensuring that paying customers don't wait days for their repairs. But I'm sure many can identify with the times it didn't work so well...

Have you ever felt the tension in the air while the service director argues with the used car manager about the value of taking care of customer services over reconditioning a vehicle no one has purchased yet? It's a very valid concern. If customers are waiting days for repairs, they'll stop coming back and the dealer will lose repeatable revenue. But, studies show that a dealer loses an average of $85 per day in holding costs and potential front-end gross for each day that a vehicle isn't retail ready. If it takes a week, the dealer loses nearly $600 to make the same amount in service gross profit.

Does that change the way you value your time? This is the point you should be asking if the effort is really worth the return; if the juice is worth the squeeze.

The Pareto Principle states that 80% of your business will come from 20% of your efforts. Imagine your success if you took your team's valuable time and had them only focusing on the 20% while vendors service the tedious work that often put your team behind.

There isn't necessarily a right or wrong answer. Some dealers feel a personal connection to the work because it's their name on the line, while other groups, like Sonic Automotive, feel like they work best by letting someone else handle reconditioning while they focus on the 20% yielding the biggest ROI. It's all about what works best for YOU!

In short, it's important to address the bigger picture when looking at analyzing your internal efforts. You might be asking why you'd pay someone else to do something you can easily do, but you could be overlooking major inefficiencies that cost you a LOT of time and money.

What works best for you? Have you figured out the efficiency to reap the benefits of internal work or do you let someone else handle it to free up your schedule for the big returns?

Do you feel like you're struggling to keep up with the changes in the industry? Advancements in technology and changes in consumer culture are constantly pushing forward, but the "current" business model for dealers has been more or less the same for decades.

When 99% of customers EXPECT a hassle, shouldn't we admit something needs to change? Think about it...as a child, most people hated going to the dentist. There's this person shoving tools in your mouth asking you how school is expecting you to answer. What's fun about that?

If you enjoyed the experience, wouldn't you be less apprehensive going back? If you were less apprehensive about the whole situation, wouldn't you feel less skeptical about everything the professional was telling you? I mean, we can all agree that sugar rots your teeth, but if the dentist hadn't just made you uncomfortable while telling you that, wouldn't you be more likely to heed their advice when they also told you to floss daily?

We can thank Amazon for this rapid shift in consumer culture. They've created such an enjoyable consumer experience that if something showed up more than 2 days after you've ordered it, you'd be asking for a full refund. It's this kind of friction-free shopping experience buyers crave in ALL transactions. A panel of automotive leaders at the Agent2021 conference even predicted Amazon will begin testing an automotive sales model by the end of 2018. I don't think any of us are ready for that.

So I ask...at what point are we going to realize something NEEDS to change? At what point will we admit that people don't trust us? At what point will we take ownership of changing the poor perception of the industry?

Our company, Image Auto, is taking the first step in that direction. We've produced a full web-series for auto dealers asking absolutely NOTHING in return. As a reconditioning company, we know that our business will become obsolete if the dealership model fails. We are simply a small, but engaged contributor.

You can sign up to be notified of new episode releases at DealersCompressed.com. We promise we're not selling you anything. We simply ask that you spread the word and share this content with every dealer or automotive expert you know. Something needs to change before we're all the rusty junker in the compactor.