Digital Retailing is a big deal in the automotive industry these days. The emergence of companies like Carvana, Vroom, and Tesla has rapidly changed customer expectations with modern, customer-centric buying experiences, and while these companies are growing fast, dealerships around the country are diligently experimenting with and researching tools and process changes in order to compete. 

At this point, every dealer knows someone who has tried to implement digital retailing. There are stories of wild successes out there, and at the same time, stories of full-blown failures.

What separates the good from the bad? The answer lies primarily in each dealership’s ability to examine its current philosophies and processes with fresh eyes.

What this means is that within your dealership, especially on the showroom floor, you have to be prepared for change from a process, people, and culture perspective. Digital retailing is more than just putting new functionality on your website, it is about the complete omnichannel experience. You must look at each role and process within your dealership and ask the following two questions; 1) if I promise my customers a more efficient experience, can I deliver on that today? And; 2) can I provide the same seamless and connected “omnichannel” experience both online and in my showroom?

Digital Retailing is 10% Technology, 90% Process

At Roadster, we have developed an online assessment tool to help you understand how ready you are for everything modern retailing has to offer. Because we believe so strongly that process adaptation is the key to modernizing, we are committed to helping you put together a blueprint for your store’s success.

Ready for Digital Retailing? Take the Assessment

The assessment provides an output of three simple readiness classifications: High Readiness, Moderate Readiness, and Low Readiness. It covers areas such as your current website offerings, pricing strategy, belief systems, team structures and processes for change management.

High Readiness means that your current philosophies, strategies, structure, and goals are well-positioned for success in digital retailing (score: 76-100)

Moderate Readiness means your current philosophies, strategies, structure and goals have some potential for success in modern retailing (score: 26-75)

Low Readiness means your current philosophies, strategies, structure and goals do not yet align for success in modern retailing (score: 1-25)

Remember, modern retailing is a journey, and one that will not happen overnight. Wherever you are on the journey is fine--whether you have tested digital retailing tools or not --  it is recognizing where you are now and where you would like to go that makes all the difference. Once you take the assessment, we can help you develop a customized game plan for digital retailing success.

Take the Readiness Assessment and let us know what you think. Did we miss anything? Were you surprised at all by your results? We would love to hear from you!

Happy selling!

The way cars have been bought and sold across the globe has not changed in decades. Sure, the internet arrived in the late 90s and provided consumers with improved levels of information and transparency, but the actual process of purchasing a car has not really changed significantly.  That is, until very recently. Two new industry entrants, Carvana and Tesla, and one traditional dealer group, Paragon, are pushing the industry to modernize like never before. 

In 2012, Ernie Garcia Jr. and two co-founders started Carvana as a subsidiary of DriveTime. Carvana set out with a simple mission: to change the way people buy cars by providing customers a car-buying solution that is fun, fast, fair and powered by technology. Carvana accomplishes this with a modern, transparent, online car buying experience and great customer support. Fast forward 7 years and Carvana is an independent public company with a market capitalization of $12BN (as of September 9, 2019) and is on target to sell 175,000 cars in one year, entirely online.  

Tesla started selling its Model S sedan, direct-to-consumer, primarily through its own website in 2011. Today, Tesla is outselling big brands like BMW, Mercedes-Benz, and Audi, with a 100% online selling model. Sure, Tesla has a great, innovative product to sell, but the relative ease of their purchase process is also a key ingredient of their success. 

Most traditional dealers have been dismissive of these new market entrants because they have done things the same way for so long with great financial success. In fact, when asked about Carvana and Tesla, most dealership executives focus on the “L” part of their P&Ls, but they shouldn’t overlook how revolutionary these companies have been or the impact they have had on consumer expectations. 

Luckily, there are many forward-looking dealerships who have taken inspiration from these initiatives and are embracing a modern retail experience. Take Paragon Honda and Paragon Acura in Queens, New York for example. Led by the vision and passion of hard charging Brian Benstock, the two Paragon stores have embraced the online revolution as much, if not more so, than any other dealership. Across both the sales and service sides of the business, Paragon has taken a customer focused approach to delivering a world-class experience. It makes a lot of sense when you consider the limited real estate they have, how scarce parking can be in Queens, and how challenging New York traffic always is. Instead of making customers come to Paragon, Paragon brings the cars to their customers. 

Brian and his team branded their new customer-driven platform “Paragon Direct.” Paragon Direct offers shoppers a frictionless online buying experience that puts the customer in total control of their shopping journey. Customers can square away the entire transaction without setting foot in Paragon’s dealerships, including home or workplace delivery. And, if the customer decides to come into the dealership to see and test drive the car, they can complete their transaction using the same expedited experience in the dealership on a large touch screen kiosk.

Similarly, Paragon Direct offers owners an at-home pickup and delivery option for service and repair customers. They will even pick up a customer’s car in the evening, service it overnight, and return it by the next morning. Talk about convenience!

Dealerships across the country can learn a lot from Brian and his team at Paragon.  Lucky for us all, Brian is not shy about sharing his beliefs with the industry at large. Constantly found on the speaking circuit, Brian shares his insatiable desire to stay ahead of the pack by testing new technologies and processes in an effort to wow his customers. As such, you will find Paragon partnering often with the likes of Google, Facebook, and other well-established technology companies, in order to not just meet, but stay ahead of customer expectations. At Roadster, we are proud to partner with Paragon, helping them on their journey to a frictionless future.

“We need to look outside of our business if we’re going to reinvent ourselves. We need to look at what customer service is like from the people that we’re doing business with. The clues are everywhere.” - Brian Benstock, Paragon

Paragon also recognized the need to dedicate resources toward this new way of doing business, tapping Julian Winfield as the Department Head of Paragon Direct. His primary mission is to spearhead Paragon’s retail transformation by leveraging technology to redefine processes. The push to go above and beyond in modern retail is paying big dividends as Paragon had a record-breaking August:

-Paragon Acura finished #1 in the world for new car sales, an increase of 52.9% over 2018, and serviced more cars in the month than they had ever serviced before.

-Paragon Honda set an all-time monthly sales record for Honda dealerships around the world with 813 new Hondas sold in August, a 19.7% increase over 2018. In addition, Paragon Honda sold 318 Certified Pre-Owned Hondas. Combining new and Certified Pre-Owned vehicles averages to 36 Hondas sold each day in August!

To achieve this level of success requires vision, execution, and a continued commitment, but it is something that every dealership is capable of if they can embrace the future in front of them.  Just 7 months ago, Brian said the following in an interview with CBT News:

“Dominance is what we’re after. I want our store to be the number one volume dealership of all brands in the world, frankly. I think that nothing less than that is going to stop us, stop me. I think that’s what we’re looking for. We have the density of population, right? The math works out. We have an incredible marketing machine that generates an incredibly high number of leads, so if we have the population, and we have the lead count, then there’s no reason that we can’t double that to the 10,000 plus units, the 20,000. We think we can do it over the next 24 months.” -Brian Benstock, Paragon

Brian and his team are well on their way to another record year. The Paragon story is just one of many success stories out there, but as an industry overall, we still have a long way to go. It is time to help each other move forward.

If you are at an inflection point and are ready to drive change but are unsure how to start, drop us a line. We are happy to share our learnings and best practices. At Roadster, we have developed a playbook to help dealerships prepare for and execute modern retailing. Like Brian, we are out there speaking and teaching courses across the industry. We are more than happy to help dealerships that are interested. Feel free to email me directly: rudi@roadster.com.

The 2019 NADA Workforce Study is underway as we speak, but while we wait for it to be published, you can review what is happening inside your own dealership. My colleague, Mohamed Desouky, wrote a post recently on the True Cost of Your Revolving Door that can help you calculate this for your store.

If you are losing a significant volume of salespeople, BDC reps, service writers, technicians, or other personnel, you are going to want to read this.

Over the past 5 years, I have spoken with countless General Managers and witnessed firsthand the importance of establishing the right culture, pay plans, systems, and training to attract new employees to your dealership and retain the talent you have. The stores that have the highest retention rates understand that retention is not about perks; it is about employee experience. Through it all, the #1 thing that I have learned is this:

So, how do you get started? Here are some helpful tips on how to set up your employee experience and keep satisfaction high for years to come.

1. Give employees a sense of empowerment
In the words of Steve Jobs, “It doesn’t make sense to hire smart people and tell them what to do; we hire smart people, so they can tell us what to do.” High-performance workers want to do what they feel is right to get the job done. Consider how much of the sales process you allow your salespeople to handle without requiring them to speak to a sales manager. Do they have to leave the customer’s side multiple times to get them through the process?

I recently went to a Honda dealership to buy a car and the salesperson could not provide numbers on a new Honda Clarity without asking his manager. Your customers don’t understand why a person who is being paid to help them can’t actually help them, and your salespeople don’t enjoy doing the uncomfortable dance back and forth between their customer and manager.  

2. Reduce the high-pressure sales environment
While there are plenty of grinders out there that live for the negotiation, if you are trying to source employees from other industries or are focused on hiring millennials (and gearing up for Gen Z) at your dealership, you should evaluate the necessity of negotiation in your sales process. Roadster did a Millennial Job Study a few years back that said negotiation is the #1 reason why millennials would not want to work at a dealership. 

Most dealerships today are moving toward market-based pricing, with many going a step further to one-price sales on the used car side. Given that there is less wiggle room and more technology to guide customers through pricing options, salespeople have an opportunity to play a more customer service/concierge-oriented role. Reducing high-pressure sales tactics aligns nicely with what today’s consumers value most.

“70% OF MILLENNIALS WOULD CONSIDER WORKING FOR A CAR DEALERSHIP IF THEY HAD ACCESS TO MODERN TECHNOLOGY.”

3. Review your pay plans to ensure alignment
Many studies show that today’s employees would prefer a reliable salaried or hourly pay structure and less variable compensation. To attract and retain employees, you will want to address this preference. Additionally, think about other behaviors you would like to incentivize. Customer experience is a significant driver of loyalty and repeat business, so incentivizing the team on providing excellent customer service should be considered as part of any remaining variable compensation.

4. Respect employees’ personal time
Employees today want to work hard and also have time for family and fun. Many job seekers consider careers in automotive retail but are turned off by the long work hours required for success. Some of this is due to compensation structures, but consider adjusting required hours or allowing certain positions to be remote, similar to what we see in other industries. When your employees have time to keep their home life together, they will likely have better command of their work life as well. Omnichannel retail can help here. It gives sales teams the ability to handle multiple transactions at the same time by empowering the customer to do more of the deal themselves. There are many examples of sales professionals who have maintained or increased their sales volume while working fewer hours. Think about the potential efficiency gains of implementing this change.

Suggested Reading: Work Smart, Sell More. A Story Of Omnichannel Efficiency

5. Provide employees with the latest technology
Investing in quality software systems is almost always done to improve business performance. A positive side effect is that a more user-friendly system can also improve employee morale. For example, many of your employees use their mobile devices and tablets at home and are comfortable with that hardware. They are buying things themselves using modern customer experiences, like Amazon. How about allowing them to use iPads to present a modern commerce experience, including welcoming customers, comparing vehicles, penciling deals, and reviewing service & protection plans?

6. Provide robust, ongoing training
The tone and the environment in which you train your employees is as important as the material itself. Make sure you create a welcoming environment where questions are encouraged. You will also want to make sure the training you provide, like Roadster Academy, is reinforced and supported by your leadership team’s own behavior. Having your General Manager or Digital Retail Manager introduce the program and set the appropriate tone will create buy-in from the start. Make sure that you cover all bases, including role-playing to ensure information is retained and actionable.  Encourage Sales Managers to use metrics to drive processes and get out from behind the desk to observe behaviors. This will help them to identify coaching opportunities and provide ongoing training as needed. Couple that training with state of the art technology, and you’ll ensure repeatable and efficient processes are in place. 

7. Reduce the dealership jargon!
“Welcome to XYZ Dealership, now have a seat while I talk to you in a cryptic language called dealer speak.” 

This is how many new employees feel when they start at your dealership, especially if they have little to no automotive experience.  Millennials (and your customers) aren’t familiar with acronyms like, PVR, DMS, CRM, SRP and VDP or understand the difference between front end and back end. Can you make your internal language more accessible to everyone? If not, do you have a plan for teaching new employees this industry-specific jargon?

8. Review competitor career pages
You can learn a lot by reviewing the career pages of other dealerships in your area, as well as other local businesses that are attracting top talent. Review their employee benefits to gauge your competitiveness. Then, look inward and focus on what you can control—  your culture, employee behavior, and brand— to differentiate yourself in the market.

An excellent way to learn which of these tips to implement first is to ask your former employees for their feedback on their way out the door. They are going to be the most candid about what works and what doesn’t.

Don’t forget that you’re not in the car business; you’re in the people business. In the end, it comes down to reflection and putting as much focus on modernizing your employee experience as you are on modernizing your customer experience. So, don’t give up. There are things you can do today that will keep even your most seasoned employees motivated for years to come!

Please connect with us to learn more about the Roadster platform and reducing employee turnover.

Digital Retailing can make your sales personnel three to four times more efficient. This is hard to believe, but it is true. The magic is based on the principle that parallel is better than sequential. Simply put, it is better to work effectively with a large number of customers in parallel, rather than sequentially focusing on one after another. Unfortunately, the latter represents the current automotive retail sales paradigm. Dealerships spend tens of thousands of marketing dollars to generate leads. They then try to convert those leads to in-store appointments so their salespeople and finance managers can work through transactions in the showroom and finance office, one at a time. Imagine a busy airport—say O’Hare—on a Friday afternoon. You look at the sky and see dozens of planes, some circling, waiting for their turn to land. Now, imagine that only one of O’Hare’s seven runways is available. That’s your store on a busy Saturday afternoon. The current retail sales model is inherently inefficient and is becoming increasingly unprofitable.

Fortunately, unlike airports, dealerships have an alternative and, even more importantly, it's an alternative that today’s customers prefer. In a world where consumers seek transparency, self-service, control, and time-savings, omnichannel commerce has become ubiquitous. Across categories such as electronics, fashion, groceries, and quick serve franchises (i.e., Starbucks and Chipotle), online ordering with the option of in-store pickup or home delivery is here to stay. While buying a car is certainly more complex, there are many aspects of the transaction that can be put in the hands of the customer, whether they are at home or in your showroom. Omnichannel commerce is already happening in automotive (see Carvana, Tesla, Carmax, and others), but many dealerships have not yet embraced the potential opportunity or recognized the competitive consequences of failing to adapt to this new reality.

At Roadster, we have the good fortune of working with many of the industry’s most progressive dealerships and salespeople around the country. These dealerships’ results and the individual successes we have seen highlight the potential of omnichannel commerce. Case in point: Dustin Dutterer, an Automotive Advisor at Sun Automotive in small town Cicero, New York. Working in the old sales paradigm, Dustin found himself perpetually short on time, running around non-stop, and working long hours, ultimately selling 10 to 15 cars per month. It was a good living, but he felt like his success was ultimately constrained by the number of hours in a day and the business hours of his dealership. The introduction of omnichannel commerce unlocked his earning potential. Sun Automotive implemented Roadster’s Express Storefront® in late 2018 and transformed the store’s sales process from one focused on appointment setting to one focused on online ordering and customer empowerment.  The results have been staggering. For the five months from December through April, Dustin has averaged 36 sales per month. That level of performance is outstanding, but not unheard of in the industry. What is unheard of is what he also said: “Using Roadster I'm not really working much more than 40 hours per week.”  

Gabe Hale works in a much larger metro market at Rallye BMW in Westbury, NY, just 30 miles east of Manhattan. Rallye consistently ranks in the top 5 nationally for BMW new car sales. Managing that volume efficiently is critical for Rallye’s bottom line. Rallye implemented Roadster’s Express Storefront® two years ago to help make their sales process more efficient and to modernize their customer experience. Gabe had also been keenly observing his customers’ buying patterns evolve over the years and was looking for a way to meet and exceed their changing expectations by leaning into the principles of omnichannel commerce. And boy has he figured it out. In December of 2018, Gabe sold an astonishing 61 cars! He is also now on a 3-month streak of selling over 40 cars per month and is easily heading for a 400+ unit year. Gabe says he simply would not be able to handle the amount of transactions he is managing every month with the traditional sales process.

We all know that the work hours for a high volume salesperson in automotive retail are brutal. To reach over 35 sales in a month typically requires six or seven 14-hour workdays per week. That lifestyle is unappealing to most people, making hiring and retention a constant challenge for dealerships. Generally speaking, car selling doesn’t scale well. So how do Dustin and Gabe do it? They embrace the “parallel is better than sequential” principle. They leverage their dealerships’ Express Store to concurrently guide their customers through each step of their purchases online, from home or from their mobile devices, letting them decide when and where it is convenient. Instead of waiting at the dealership to get a trade-in appraised, their customers can use their phone to snap a series of photos of their vehicle and answer a few condition questions to get an online appraisal. Similarly, the credit application process is managed online, saving significant time compared to the traditional in-store finance process. When the purchase steps are not completed from home, they leverage their Express Store on the showroom floor, allowing them to handle multiple customers in the showroom at the same time, setting each up at kiosks with self-service tasks.

PARALLEL IS BETTER THAN SEQUENTIAL

With this approach, they not only maximize their efficiency, but their customers also rave about the ease and transparency of the process. Customers feel in control and appreciate that their time is respected. Time is the one thing no one has enough of. If a customer is at the store for more than 90 minutes, Dustin and Gabe fully appreciate the rising opportunity cost to themselves and their customers. Roadster’s technology enables them to provide an efficient customer experience and sell 35+ cars a month without burning the candle at both ends. To bring things back to the airport analogy, Dustin and Gabe can have multiple runways open at all times, even in the middle of the night, and planes can land in very short intervals. 

While Dustin and Gabe continue to set the standard, we are seeing more and more salespeople at other dealerships, big and small, leveraging omnichannel commerce solutions with impressive results. Logically, It makes sense. If you can double or triple the capacity of your sales team by putting components of the transaction into the hands of your customers, you can do more with less. In a world of continued margin compression, we need creative solutions like this to keep our dealerships in the black. Don’t you agree?

Anyone love their phone company? If you are like me, there is nothing I abhor more than needing to call them. Every time I call, I have to do a bit of meditational breathing and mentally prepare myself for what will inevitably be hours of frustration. Not only will there be excessive hold times involved, but I will also be bounced from department to department, left dealing with several different people and having to repeat my issue over and over again. If I’m not disconnected along the way, it feels like a victory. Sound familiar?

Now, compare this to the Apple store experience. I make an appointment online, walk into the store at my designated time and get assigned an Apple Genius who will help me every step of the way. Not only do they stay by my side, but they are empowered to answer questions and even ring me up right there on their iPhone when I am ready to transact.

And so there it is — the world we live in, shifting between these two contrasting experiences. And the more Apple-like the world gets, the more we are unwilling to deal with extended wait times and poor customer service.

What would happen if the phone company empowered their frontline employees to help with all of the situations they may be faced with? Think of the minutes a customer spends on hold before resharing the same story 2, 3, 4+ times; or the minutes employees waste transferring people around and listening to the same stories their colleagues have already heard. Would one person be more efficient? Would customers stop dreading the experience and — dare I say — even find it enjoyable?

This is happening within the automotive retail sector as we speak. Progressive dealers around the country are deploying technology and empowering their sales teams to streamline the entire process.  And while many dealerships refuse to change, most sit somewhere in between — trying to enhance the experience, but without the tools or buy-in to make it stick.

As we head into 2019 and a world of declining SAAR, customer satisfaction and efficiencyare going to be critical areas of focus for dealers to both obtain and retain buyers. As the CMO of a technology company in the space, let me be the first to say — technology itself is not enough to accomplish these goals. How you train and empower your teams to use the technology and streamline your operation is the key to a successful future.

Don’t believe me? Late last year the Roadster team set out to put some data behind this phenomenon. Not only did we survey over 1,500 consumers, but we also observed “transactions in the wild”  at eight dealerships, representing six different brands. Here’s what we found:

Customer satisfaction significantly drops every time the salesperson leaves the customer’s side.

Thanks to our friends at AutoTrader, we already know that satisfaction drops significantly after the customer has spent 90 minutes in your showroom. We also know that customers are relatively pleased with the salesperson (73% satisfied), and that time is the true killer of satisfaction.

How we reduce ‘time spent in dealership’ and provide happier experiences has been up for debate. But if there is one thing I have learned over the years it’s this: Doubling down on your strengths is the fastest way to success.  

If people are generally happy with your salespeople, keep them with their sales professional longer.

During our onsite observations, salespeople were leaving their customers alone every 20 minutes during the transaction to do a variety of tasks. Every 20 minutes! Not because they want to (although some admitted to doing it intentionally to create the appearance of getting something approved), but because the process you created for your showroom requires it. They must get manager approval for pricing, credit, deal terms, trade valuations, F&I product review and more.

And what were those customers doing while the salesperson was away? Whether that was texting a spouse about their uncertainty, web-rooming your competitor or doing research on 3rd-party sites — they were busy talking themselves off of your deal.

6 out of 10 times customers were re-evaluating the deal.

It’s time to take a good look in the sales process mirror and make the changes necessary to keep your customers with their salesperson longer.

Technology exists to remove duplication and reduce time-intensive aspects of the transaction. But training is key, as many of the salespeople observed were reluctant to use the technology available to them.

Don’t let 2019 go by without empowering your sales team to do more. Not only will it increase your customer satisfaction scores, but, if done right, it will also improve your bottom line by taking waste out of the equation.

The cost of not evolving is too high. The dealerships that deliver a great buying experience will undoubtedly earn a disproportionate share of the market. And with new dealer model threats such as Carvana, Carmax, Tesla, etc. nipping at your heels, the time to take action is now. Taxi companies did nothing to streamline the consumer experience with technology and look where they are now — Uber and Lyft are eating them for breakfast.

So, take a step forward and empower your frontline people. The game of telephone was fun as a child but has no place on your showroom floor. Keep salespeople with your customers longer and you’ll create customers for life.

Download the full copy of the Roadster Time Study report.

Michelle Denogean is the Chief Marketing Officer of Roadster, the leading Commerce Platform for the automotive industry, where she oversees Marketing, Insights & Analytics.

To find out how Roadster’s Omnichannel Commerce offering can help you empower your salespeople, go to roadster.com to schedule a demo.

Technology advancements have helped many industries increase efficiency and reduce employee headcount. In some cases, new technology has introduced efficiencies that did not exist before– think Starbucks mobile ordering or doctor’s appointments via video call. Some retail technologies have moved tasks that previously required a trained professional into the consumer’s hands–such as self-checkout at the grocery store, or airline check-in kiosks.

Car dealerships have been trending the opposite direction. Vehicles loaded with high tech features have forced dealers to invest in tech-savvy employees known as delivery, technology or product specialists. Growing headcount while profit margins are compressed is a significant issue. Fortunately, it is one that technology can help right size, as mentioned above. But there is a more pressing matter to resolve — one that has a much higher impact on the bottom line — we need to reduce employee turnover.

According to the NADA 2017 Workforce Study, the average dealership turnover rate is 43% across all positions nationally. Even more alarming, the rate is 66% for sales specific roles! That means, on average, well over half of your sales staff will leave within the next twelve months.  Think about all of the upfront expenses associated with onboarding and training these short-term employees. Automotive News referenced a study a few years ago that estimated for every 10 point increase in annual turnover, an average size dealership squanders $500,000 in gross profit. Given the margin compression dealerships are experiencing across the country, I can’t think of anything that could positively impact the bottom line more than reducing turnover.

While it’s impossible to account for all the soft costs associated with turnover in sales staff (CSI, the morale of remaining employees, unanswered customer calls, etc.), the hard costs are clear. Let’s look at it from an angle we can all relate to using numbers we monitor regularly. Setting aside the cost of actually hiring someone, we can easily see how it adds up.

Before a sales consultant leaves, whether voluntary or not, his or her performance declines. They are either disengaged while looking for another job or underperforming until they are finally terminated. This sub-optimal productivity period could be anywhere from 3 to 9 months. If they were selling 12 cars per month beforehand and their productivity declines by 25% during this period, they would drop to 9 sales, leaving 3 on the table. If you are lucky, sales managers and other sales consultants will step up and salvage 50% of those deals. They take the showroom opportunity, follow-up, or otherwise take half deals for delivering the car. Let’s assume that out of the 3 sales left on the table, your team is able to save one. Not only have you lost 2 deals, but you end up paying other salespeople higher bonuses because they now have more sales than they otherwise would have had if the departing salesperson were selling at their usual pace.

But that’s not all. In addition to lost sales, service and parts will be missing all the gross profit generated from repair orders, warranty and recall work they would have earned over the coming 3-5 years.

Setting aside the various costs of hiring a replacement, the dealership stands to miss as much gross while the new hire ramps up as they did from the productivity decline of the outgoing salesperson. This cost is often exacerbated by a large new hire “guarantee” for the first 90 days to attract the right candidate.

Just how big of a missed opportunity is this for your store? Grab a copy of your financial statement and your most recent payroll report showing the number of employees you have terminated in the past few months. If you apply your assumptions on productivity reduction, as well as your current pay plan you will be able to figure this out for yourself. Feel free to reach out and we can walk you through it.  Even a 10% reduction in turnover would have a significant impact on your bottom line.

Once you understand the impact, you will be left with a burning desire to act quickly, so it is important to also understand what causes this high level of turnover in the first place. A few years back we polled a thousand millennials across the country, and the following traits of dealership employment were found to be huge detractors: high-pressured sales tactics, commission-based pay, and unpredictable schedules. On top of that, 94% said that technology plays a critical role in their ideal job.

We’ll talk more about this in our next post, but I invite you to consider how employee experience and the desired customer experience are very much intertwined.  By shifting away from high pressured sales to a more concierge like experience and deploying technology that makes the sales process easier, you can quickly reverse the current margin compression trend while improving CSI. You will need to rethink your pay structure and incentives to align with what employees & customers value, but these modifications will pay dividends in the end. Not only will you retain your existing employees, but you will dramatically increase your ability to attract & onboard new talent, especially today’s younger and technologically advanced generations.

$500,000 a year is a HUGE impact to your bottom line. If you can find a few ways to stop the continuous spin of your revolving door, you will reap the financial rewards. Technology can help, but it is only part of the solution. Message me and we can talk about strategies you should be deploying now to set yourself up for success in the year that follows.

-Mohamed Desouky
Director of Strategic Accounts, Roadster

I am often asked by General Managers to review their marketing plans and website effectiveness. Before I dive in, I always inquire about the results they are hoping to attain. 99% of the time it is to improve the quantity or quality of their leads. With more ad dollars being spent on digital, we can now track impression shares, click-through-rates, leads, VDP views, time on site, bounce rates, etc. This level of visibility is super valuable, but are these the holy grail metrics? Should we be asking ourselves whether or not we are selling more cars? Selling cars more efficiently?

Just because you generate more leads, doesn’t mean you will sell more cars.

We are in such a repetitive, 30-day cycle business that we spend almost all of our time and effort blasting the market to find the next batch of in-market shoppers, hoping they come into the store or complete a form submission. While this hunting process plays a key role in marketing efforts, to really improve return on ad spend, a more comprehensive approach is required.

This is where a go-to-market strategy becomes critical to maximize your ROI and overall profitability. A go-to-market strategy goes beyond just a marketing message and where you spend your ad dollars, it fuels everything you do — the value proposition to your customers, how you treat your employees, how you are seen in the community — and it touches every part of your business, from how you set your pricing, to how you use your CRM, greet your customers, and use your service scheduler.

The first step in creating your go-to-market strategy is determining who your target market actually is. You may be saying to yourself, “everyone is in the market for a car!“ That’s not really the truth. If your agency promised to provide as many ready to transact opportunities as you could handle, I am sure you would be all in. But, if they told you each of these opportunities would drive by four to five of your competitors on the way to your store and then enter with price in hand, I’m sure they would lose most, if not all of you.  We pass on deals we don’t want every day, and even try to send many of those customers to our competitors! Defining the customers you want to reach will help you focus on the steps necessary to message to them and ultimately convert them to sales.

The best way to identify your target market is to study your repeat & referral business. Ask yourself what makes them different than the others?  Is it a certain neighborhood, age range or income level? Are they penny pinchers or do they value time over price? Getting to the core of what they both valued about their experience with you and value as it relates to retail, in general, will provide you with the insights you need to go to market. This will help you to truly own your backyard and lock in your existing client base. It will also help you expand your reach into other PMAs, gaining market share by truly understanding your customer base and serving them the way they want to be served.

This leads to the next step in creating your plan—defining your unique value proposition. Developing your value proposition starts with creating your dealership’s mission statement. Perhaps you haven’t considered your mission statement as a part of your marketing strategy. Well, you should. To quote Jack Welch, your mission statement is “how you intend to win in your business.” It plays a critical role in your strategy by providing employees with a direct roadmap and energizing them around a mutual goal. Your go-to-market strategy should read like a good book. Once you pick it up, you can’t put it down. This story may begin in your promotional copy, but when done right, it is reinforced throughout your employee base and shows up consistently across the customer’s entire experience with your store.

If you want to reach the largest part of the market segment, then you need to focus on building value at every touchpoint.

Creating your mission statement and defining your unique value proposition starts with understanding your target market. What resonates with your target customers? A transparent process that saves them time? Are they super focused on getting the best deal? Are they family oriented with kids in tow?

Once your mission and supporting value props are identified and communicated, they will take on a life of their own; changing the culture within your store and making you the dealership of choice in your market. Effectively using all of your resources to communicate your value proposition is what will allow you to create a competitive advantage. But remember, it is more than words. You have to personally live them each and every day.

Someone (now a very good friend) once asked me the following question about my dealership:

Does the food match your menu? Is what the consumer is going to experience in-store going to match what you advertised?

The ultimate sniff test for your go-to-market strategy is making sure that the experience you offer matches what you promise in your advertising. Imagine if you experienced this as a consumer — You go to Amazon, find the item you want, click the “Buy Now with 1 Click” button, and then Amazon proceeds to ask you several more questions. You endure, answering the questions, and after Amazon says, “Congratulations! You have successfully added the item. Now, go to the Amazon fulfillment center to pick up your item.” Isn’t this similar to what we are doing when a lead comes in from that “click for instant savings” button on your VDP? The consumer asks a specific question and we avoid it altogether.

When was the last time you looked at your website from the consumer’s perspective? Most of the dealer sites I have visited have a call-to-action (CTA) like: unlock your savings, get your ePrice, get instant savings, or even make an offer.  What happens when the customer clicks a CTA like “get instant savings” on your site? Do they receive the price instantly, or do you respond with some generic templated message asking the consumer to provide more info, so you can give them what you’ve already offered? Automotive is the only remaining industry behaving in this manner, mainly because for a long time we could. We forced the consumer down our process because it generated more sales and there wasn’t a viable alternative.

Fast forward to 2018 — Dealership profitability is down, margins are being squeezed, inventory levels have spiked, and interest rates are up across the board. All the while, store visits are down and online reviews are dramatically influencing where the consumer chooses to frequent.

Your value proposition needs to focus on what consumers currently see value in, not what you as a dealer value.

I see some dealers trying to create value, but they lack consistency and steadfastness with either staff or customers. Long-term benefits are often sacrificed for short-term goals or compromises.  Staying true to your brand promise is key, even through tough months. Remember, consumers, do not care about how many cars you have in stock. Your auto mall is no longer a driving factor, as consumers have stopped behaving in the “find a dealer-find a car” manner. Today they are finding the car online and then finding the dealer they want to purchase from. Having a set of value props that resonate with consumers is how you get your car and dealership into the consumer’s consideration set.

What are today’s consumers looking for? Time savings, great service, ease of doing business, product knowledge, and transparency are a few good places to start. Choose strong reasons why a consumer should buy from your dealership and make sure to convey them in a clear and concise manner. Then, make sure you deliver on that message at every turn.

There are many technology solutions that can help you roll out your go-to-market plan.  For instance, digital retailing solutions help dealerships signal ease, time savings, and transparency. But it isn’t good enough to just plug a solution into your website. If you are promising ease, time savings, and transparency, then you need to make sure you deliver that at every touchpoint; that is why I am such a fan of omnichannel solutions that connect the online and in-store experiences, so what the consumer feels is seamless. Dealers have made a lot of technological advances over the past decade, and DR/omnichannel marketing is the next evolution. This technology should be used in dealerships to align with how consumers want to shop, to differentiate your store, and to help create a new culture with your team.

Many people want to know if digital retailing is hype or innovation. It’s a fair question and I think a lot of dealers, (even ones with a DR platform) may be asking themselves. The answer is yes! Digital Retailing is hyped up innovation.

If you ask a dealer why they have a CRM, there isn’t a struggle to come up with an answer; it is to improve marketing efforts, communication, follow-up, help send a relevant message to the consumer, and ultimately to sell more cars (the list goes on). Digital retailing can impact all of these areas as well, and when it is used as an omnichannel solution (both online and in-store) it becomes even more impactful by enhancing the consumer experience, creating efficiency for both your sales staff and the consumer, and reducing the time for both follow-up and sale completion.

These platforms, like your CRM, are tools for you to incorporate into your go-to-market strategy. They are not a silver bullet on their own. The important thing is to think through what differentiates you and have a game plan. Get clear on who your target customer is and what resonates most with them — then anchor your messaging and in-store process to it.

Consistency is the most powerful tool you have in your toolbox. So, take the time to develop your go-to-market strategy and then incorporate it into everything you do. It will make your operation far more effective, including turning those in-market shoppers you are hunting into loyal customers.

-Mike Christian
GM, Dealer Services

Remember the old adage “You get out of it what you put into it?”

Tiger Woods is a great example of this. He believes wholeheartedly in putting in the effort and logging your time to get the results. In fact, after the U.S. lost the Ryder Cup at Le Golf National, Woods said he had “a better understanding of what (his) training needs to be for next year”, so he can endure an entire season. And believe it or not, he’s heading back to the United States with some serious momentum. He won for the first time in five years at the Tour Championship and finished in the top 10 seven times.

Incredible right? This concept of continuous improvement is not a new one.  But I was reminded of it earlier this week when speaking with Greg Nalewaja at PSC Auto Group who said, “we all need to strive to have a truly digital dealership.”

What is a digital dealership?

Let’s first start with what it isn’t. Digital dealerships are not dealerships that invest heavily in digital marketing. They are also not dealerships that have a “buy it now” button on their website.

Digital dealerships are operators who leverage technology to streamline the entire sales process and are making changes to their value proposition, people strategy and pricing to create improved customer experiences.  Like Tiger Woods, they are never satisfied & are constantly evolving. Digital dealerships don’t separate out the online experience from the in-store experience, they are continuously evaluating all of the different ways they can create more transparency and efficiency for everyone involved; and while technology is part of the solution (thus the digital reference), they are looking at everything that needs to be improved to make the process work flawlessly.

According to Greg, “those who don’t prepare for digitization now, will be left behind as more and more consumers demand efficient online buying experiences.” You don’t have to look that far to know that this is true. In today’s ecosystem we have millennials (estimated to be 40% of car buyers by 2020), who have specific expectations around digital capabilities, and companies such as Carvana, Amazon and Tesla who are radically changing the way people think about the car buying experience today. In fact, Industry consultant, Andrew Compton had a great quote recently about Carvana:

“It’s less their [Carvana’s] digital retailing technology but how they harness the technology to connect marketing, sales, F&I and customer experience— in other words the entire company.”

Digital dealerships are connectors, and it is these connections across the sales process that drive long term efficiency gains & higher CSI scores for their stores. While Digital Retailing tools, CRM companies and DMS systems play a role in helping to make these connections systematically, there are critical areas of your business that need to be thought through beforehand to ensure success.

First and foremost, start with your objectives. Being clear on your vision and what you are trying to accomplish with digitization is the first step to becoming a digital dealership.

Are you trying to reduce costs by moving administrative tasks to lower compensation roles?  Are you looking to be more transparent so that you can increase your CSI score?

Whatever your objectives are, map out your vision and clearly communicate it with your employees and your partners so that they can rally behind it and provide solutions to support that outcome. Ephraim Barcelo of Crown Toyota holds a partner meeting several times a year to create this alignment of vision and strategy. I have been honored to participate and see firsthand the power of shared goals across a group of supporting vendors.

Once you understand your objectives clearly, it is time to evaluate your existing process and find opportunities to adjust where needed to best meet your goals. While there are many unique factors to consider at every dealership, I suggest starting with the following three areas as they are critical drivers to delivering a best of breed customer experience at your store.

Brand + People + Price = Customer Experience

“People will not remember what you said. People will not remember what you did. But they will remember how you made them feel” – Maya Angelou

Brand, people and price are all outward facing elements that your customer will experience, and it will set the tone on how they feel about your store. In order to get this right, you have to sweat the details. As such, here are a few tips to get you started in building your digital dealership playbook:

1. Identify your value proposition and ensure consistency at every touch point.

The important thing in picking a value proposition is looking at what your customer’s truly want from you (not just what your dealership wants) and then picking the one value proposition you can stand behind in a unique way. Today’s consumers care most about convenience, ease of use, knowledge and transparency, this is where Digital Retailing can help, but you have to look at every element of your dealership to ensure you are consistently living those values every day in every customer interaction.

2. Review your employee hiring profile & compensation plans for goal alignment

With turnover costing dealerships an average of $500k per year, it is no wonder that there is so much focus on recruiting the right people. But when was the last time you took a hard look at the type of employees you need to be successful based on your longer-term vision? There is a whole generation of millennials on the market and their profile could very much match what you need in your store. The point here is to figure out what your objectives are, how you might recast roles, develop new job descriptions and align pay plans accordingly. Equitable compensation plans that eliminate rivalry and reward for meaningful results are not only more attractive to the labor market, but also get your team working together to accomplish a common goal.

When common goals are established it is important to step back and provide employees with the autonomy to get things done. You need to ask yourself – who can make decisions in my store? In the traditional world only managers could. In the new digital dealership, customer facing employees should be empowered to pivot along with the customer. Every sales team member can now have access to where the customer is in their journey and be empowered to assist them along the way.

3. Develop a consistent and fair pricing strategy to build customer trust

Consistent and fair pricing does not mean you have to be one price.  There are many well-known stores with market-based pricing that customers love for their transparency. Building customer trust requires a fair price that you can stand behind and then showcasing it consistently throughout all of the channels where you display pricing information, including your showroom.  While this might seem obvious, nothing loses trust faster than a perceived bait and switch.

Even for the most transparent dealers, inconsistent pricing displays can happen if they are not monitoring continuously and reviewing their message around pricing from a customer experience point of view. Check your website pricing, see how you are displaying your price versus discounts that are available, and then compare this price to the price you are displaying within your digital retailing tool, as well as across the Internet. Those that sweat the consistency factor have much higher trust levels overall.

Becoming a digital dealership is not for the weak at heart. It takes the ongoing dedication to continuous review and improvement; Have a visual of what perfect looks like and recognize that the prize is in the progress not just the accomplishment. Brian Pasch did a recent survey to shed light on the top challenges people see in getting digital retailing implemented at a franchise dealership. It is enlightening to hear that the top three challenges had nothing to do with the technology itself. Culture change, transparent online pricing & management fear of losing gross made the top of the list.

Digital dealerships acknowledge the fear of change and put their game face on. It doesn’t happen overnight, but for those who get a head start the rewards will be exponential.

——

http://www.autonews.com/article/20170227/RETAIL/302279963/the-millennials-are-coming

Car-buying behavior is changing, driven by customers’ desire for modern convenience. Much like the way they shop for most anything else, more and more customers are going online to complete at least some portion of the car buying experience.

As a result, the role of the dealer is changing, too. To stay competitive, progressive dealerships are turning to omnichannel commerce solutions like Roadster’s to deliver a seamless, streamlined and satisfying shopping experience, and to increase efficiencies.

Want to learn more about Roadster’s full line of Express products, including Storefront, Desking, Marketplace and Trade? Click here.

Last week my daughter needed a yellow shirt for a school dance performance. Instead of heading to the store that evening, I turned to Amazon and had it ordered in less than 5 minutes flat. And when I picked up my coffee at Starbucks the next morning, I ordered it on their mobile app so I could skip the line altogether and have my coffee hot and waiting for me when I walked in the door. Sound familiar?

In today’s day and age, time is the new currency, and it applies to every buying experience in our lives.

Buying a car is no different. It is a more complicated purchase for sure, and people still want to go to the store to test drive, ask questions and go over the ins and outs before they buy.

In fact, according to a recent study by Bain & Company — people are going back and forth between online and in-store 4x on average during the car buying experience.

But today’s discerning buyer wants to do as much as they can to complete the transaction before heading into the store to take delivery. We have all seen the stats in one form or another— The vast majority of car buyers wants to do some or all of the transaction completely online. So, in marches a flurry of ecommerce platforms to enable this.

The truth: < 10% of car buyers today will actually buy their car 100% online.

As an industry, we need to unpack this. Time is the new currency and most customers are still coming into the dealership to complete the transaction. So, as we implement new capabilities that allow our customers to start the buying process online, we also need to think about how we bridge that efficient online capability with the in-store experience. If, as an industry, we implement express purchase options online but can’t expedite the process in-store we lose the customer for life.

It would be like ordering your coffee on the Starbucks app and then being forced to stand in line with everyone else to pick up your coffee when you get there.

Connecting the online and in-store experience together is what is referred to as Omnichannel Retail. Omnichannel means allowing a customer to enter from any channel and pick up where they left off -- consistent and continuous.

When done right, Omnichannel Retail benefits more than just the customer, it is also great for business. By enabling the customer to do some or all of the process online, you are saving the valuable time of your sales staff, who as a result can attend to more customers. Some of our dealer partners claim to be saving 3-6 hours per transaction. And this goes beyond just what the customer can do themselves. Imagine a world where your employees have access to all of the information necessary to walk a customer from A to Z of the sale. You can redeploy resources to make your entire staff more efficient and effective.

“I don’t want to pay a sales manager to quote out the door figures, I want them coaching and training the sales team. From an ownership standpoint, I want to take them away from a low value task to a higher value task.”  —Marker Anderson, Anderson Honda

Omnichannel experiences skyrocket customer satisfaction by 172% over the traditional experience, per Cox Automotive’s Driving the Digital Deal Study. Not to mention, that efficient technology-driven experiences in-store are a great recruitment tool for the younger, Millennial Generation.

If all of this sounds great, then why aren’t more dealerships jumping on board?

Change is unknown. Change is scary. Change is hard.

So, what makes Omnichannel Retail successful? You do! Success needs a champion. If you are inspired and ready to champion the Omnichannel evolution in your store, here are 5 quick rules of the road to keep in mind:

1: Believe

Ask yourself, “Do I fundamentally believe we will transact digitally in the future?“ Leaders who start with this conviction will be able to ride the wave of initial setbacks that may occur and ensure the team understands that this is the way of the future, if not the present. There is no turning back, but don’t expect 80 years of inertia to be overcome in a few short weeks. Lead with a strong vision and adjust course as needed.

2: Have a Game Plan

Change is hard, and while Omnichannel is the goal, you don’t need to rip the Band-aid off all at once. Smart partners identify the department in their store that will be most successful at using the technology platform effectively. They pick a department as a beachhead, prove success and then expand the program from there. This could mean starting with the Internet/BDC teams who can move from static price quote responses to interactive deal sheets, or the sales floor team who can leverage the technology to do a needs assessment and deal presentation side by side with the customer.

HINT: Don’t boil the ocean; rather start somewhere you feel has the best chance for success.

3: Price Fairly & Consistently

If you are still insistent on pricing your new car inventory at MSRP, then Omnichannel Retail is going to be a struggle for you. Fair and consistent pricing breeds trust with customers. Nothing stops a customer faster in their tracks than if they feel like the price they are seeing is much higher than pricing they have seen elsewhere, or worse, is different than pricing they have already seen from you. Think about adjusting your pricing to maximize efficiency and customer experience as opposed to the current model of subsidizing your grinder deals with the occasional laydown deal. Put another way, don’t make all your customers suffer through a long sales process because you are looking for that occasional home run. There is a fair market price that can work well for both parties.

4: Encourage Ownership

Communicating early and often with your dealership personnel is imperative to getting the buy-in needed for success. Let staff have input into decisions, including the vendor selection process. They will feel more ownership. If they own it, you will be far less likely to start the initiative and flame out quickly. Weekly meetings with key stakeholders to help tweak processes and to maintain feelings of empowerment are key. The worst thing you can do is introduce your staff to the concept at the time of implementation and training. The communication must start well upstream of that.

5: Recast Roles

With any change, the first question that comes to everyone’s mind immediately is “how does this impact me?” If there is an inkling of doubt about the longevity of someone’s role, they can and likely will sabotage the change. So, before you make significant changes to your process, share your vision for how this change is going to make their position at the dealership even more valuable.

As business people, we all need to be thinking about the evolution of our customers and the changes required of our business to remain relevant. As an industry, we are in a unique position as we transition to time as the new currency. Time is something that both sides can benefit from in the long run.

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