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.

If you read my latest blog post, you will remember my Starbucks analogy. What if you ordered your coffee on the Starbucks app, just to find out that you still had to get in line when you got to the store? Wouldn’t that be frustrating?

If you commerce enable your website and do not prepare your team to provide a streamlined experience at every touch point (internet, BDC, showroom, F&I), you may unnecessarily lose many valuable customers.

Most car buyers want to do at least some part of the buying process online before coming into the store, so it is vital that you equip dealership personnel with the right information to pick up where the customer left off, as well as the tools to make it as efficient as possible to seal the deal -- whether the customer is an internet shopper, a phone-up, or a walk-in.

Change is underfoot and thanks to omnichannel commerce solutions like Roadster, there are examples of this happening all over the country. The two mistakes people make on their path to digitizing the transaction are A) not thinking through how their stores need to evolve and B) not getting everyone on the team bought into the vision.

Buy-in requires you to answer this simple question for each member of your team: How does this impact me and my ability to be successful?

Explaining how roles will change for the better and then training on the skills they will need, are the most important steps to ensure success.

But don’t worry. It isn’t as onerous as you may think. We are talking about evolution, not a complete transformation. There are small tweaks to your process that you can begin testing right away.

To give you a jump start, here are 5 examples from our incredible dealer partners to get your juices flowing.

1. The Business Development Center (BDC)
Appointment Setting --> Deal Concierge

The traditional BDC’s job is to make appointments for customers to come into the store. But in a world where the customer is completing several steps of the purchase process online, should the #1 priority be to get them in the store or helping them complete as much as possible themselves first?

The appointment will come as the Deal Concierge walks the consumer through the buy flow and then self-selects their appointment time. This team can improve close rates by helping customers become more committed to the car and the dealership before walking in the door. It not only saves everyone involved time, but it puts the customer at ease, leading to improved Customer Satisfaction Index (CSI) scores across the entire sales process.

At Lexus of Lehigh Valley -- one of the fastest growing Lexus stores in the country and the first to be Lexus Plus certified -- 8 out of 10 people who call the dealership reference a VIN specific stock number. Since stock numbers for new cars can only be found on their search results and vehicle detail pages, the BDC knows that these customers are looking at deal terms. Instead of jumping immediately to the appointment, they explain what can be done online and answer any questions the customer has about payment options, trade-ins, and service plans before inviting them into the store.

“It’s the experience overall that makes it powerful. Customers say, I was on so-and-so Lexus store website and then went on yours. I like your website so much better so I thought I would come see you guys and buy a car from you.” - Mike Price, Lexus of Lehigh Valley

2. The Internet Team
Static Price Quotes → Interactive Deal Sheets

The Internet Team is masterful at following up with price quote requests from around the web. Sending estimates to customers is not a new phenomenon, but how many times do internet teams go back and forth with a customer who wants to see dealer specific options with lower rates, more money down, etc. Today, dealerships like Longo Toyota are using interactive deal sheets to respond to all of their internet leads, allowing customers to adjust deal terms based on what they can afford. Not only does this stop the back and forth, saving everyone time, but it empowers customers to structure their deals on their own time, often after hours.

"Our Internet Sales Team can more quickly respond to a guest’s questions, and provide a meaningful product/price quote that enables the guest to continue to research on their own time and pace, so our team can handle more leads per person. We have seen our closing ratio almost double." - Brendan Harrington, Longo Toyota

3. The Showroom:
First Point of Contact → Only Point of Contact

Empowering your front-line sales team with the information they need to finalize the sale, means keeping them in front of the customer, which builds trust & saves everyone time. When the first pencil (and 2nd or 3rd) can be done without the salesperson leaving the customer’s side, everyone wins.

At Audi Rocklin, every sales person runs their first pencil from their Roadster desktop app while sitting side-by-side with the customer. For the sales team, it is an empowerment tool, and the customers are thrilled to see the transparency of the information. Both their gross profit and CSI scores have gone up after deploying commerce tools in-store.

“We live in an information era and can get access to anything from our phones. This can be dangerous as not all information is accurate. Keeping the sales person at the desk with the customer reduces the likelihood of a customer getting on their phone to start questioning the deal. We keep them engaged with the sales person without separation.” 
- Luke Smith, Audi Rocklin

4. The Sales Manager
Desking → Sales Coach

At Grappone Automotive, they call their sales managers “Team Leaders”, and rightfully so. By empowering the sales team as mentioned above, they have freed up the sales managers to focus on coaching best practices for how to treat customers and make them a guest for life. An example of this can be seen in their new trade-in process. Sales managers used to take the car for inspection and then disappear to put the valuation together. Now, the salesperson can stay with the customer and take pictures together of the car using an iPad, logging damages that get the customer over the “my car is perfect” thought process. This also allows the salesperson to introduce any F&I products that may be useful for the new car purchase. All of this is collected and sent to a centralized trade team that values the vehicle within minutes and pushes the estimate directly to the salesperson via text message. All the while, Team Leaders are available to do higher value tasks, such as helping a salesperson close a customer, hold training sessions or evaluate and update process and procedures.

5. The F&I Manager
The Closer → Product Educator

Perhaps one of the most controversial changes in the industry is the move to more transparency and online education as it relates to F&I products. Most people fear that transparency and online selection will reduce product penetration and profit levels due to the lack of control. We see quite the opposite. Customers who have their options available to review online are more prepared for the decisions they need to make when finalizing the deal. We see dealerships every day not only maintaining F&I profits with this level of transparency, but some are seeing significant increases when they embrace their role as an educator. These new models are about more than empowering the customer, it is about educating the salespeople to have conversations about F&I products as early as the needs assessment stage.

Take Cavalier Mazda as an example. Their F&I Director saw online commerce tools as a way to expand his reach by educating customers and product specialists on their available products. Not only does this empower the sales team to have conversations early in the process, but it dramatically helps the conversation once the customer gets to F&I as they are already primed with the products that could help them maintain their new car.

Cavalier Mazda didn’t see this as an opportunity to eliminate F&I. They saw it as a way to expand the number of people selling F&I.

“It’s all about Reputation, transparency, communication and relationship. Putting a tablet in front of a customer and having them interact with it through you is a much better experience. Not only does it empower our product specialists to move the conversation forward when I’m not available, but it acts as the initial touch point. Customers want control, but still want to be sold to in a respectful manner. Technology allows us to collect information on their interests up front and puts the customer at ease and more open to hearing us out once they get into the store.” - Rob Voigt, Cavalier Mazda

Reimagining roles are what motivates and excites everyone involved. People get to learn new skill sets that they didn’t have before, working some new muscles that will help them grow in their career.

So, whether you are exploring “digital retailing” solutions or omnichannel commerce solutions like ours, I encourage you to think about the entire customer journey and evaluate your sales process in that context in order to handle today’s buyer. These changes are not radical in nature. Each modification to your sales process can be tested and fine-tuned one at a time to meet your needs. The important thing to keep in mind is that buy-in is an absolute requirement. Painting a picture of how someone’s role may change for the better is the first step in evolving together as a team.

T.E.A.M =Together Everyone Achieves More

Happy selling!

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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