Are you providing the experience your buyers want? Customers will always want the right car at the right price, but more car buyers are looking at other factors when considering where to buy a car. Current consumer behavior indicates that transparency, convenience, and speed are almost as important. One phrase can sum up buyer expectations: the easier, the better.
But meeting this expectation can be easier said than done. Dealers have valid concerns about changing the traditional sales structure that has worked well for so long. Still, market forces are driving some dealers to consider a consolidated one-touch sales process, where customers interact with one person throughout the entire buying process.
To make the right decision for your dealership, it's important to understand the forces that are moving the industry in this direction—and the potential drawbacks to making such a significant change.
Technology now exists that allows car shoppers to get further down the funnel in the car-buying process without even visiting the dealership. Digital tools enable consumers to get an appraisal for their trade-in vehicle, work out their payment terms, and other steps in the car buying process without ever stepping foot in the showroom or interacting with a salesperson.
Empowering consumers to work their own deals is a net positive, as it makes them feel more confident and in control about the purchasing decision. But technology is not a replacement for well-trained, consultative staff. It's an extension of your showroom experience. The primary benefit of upgrading your dealership technology is to help streamline the sales process and shorten the time spent buying a vehicle. The numbers speak for themselves—after nearly 70% of auto dealers added digital retailing tools last year due to COVID-19, customers who described themselves as "highly satisfied" with their overall shopping experience reached 72%, up from 60% in 2019.
Despite the incredible rise and popularity of ecommerce, buying a car is still a complex process. Most car shoppers still have questions and want human guidance during the process, from comparing models to taking a physical test drive, understanding financing options, and setting up their new vehicle. Technology cannot replace the human expertise necessary to guide car shoppers through the entire sales process.
Consumer Car-Buying Experience
Dealerships face tough competition from disruptors such as CarMax, Carvana, and Vroom that promise a better customer experience through digital tools. As a result, many dealers are looking for ways to differentiate themselves by matching or exceeding the customer experience found at these online retailers. Want proof? Ask yourself how many car ads you see these days that focus entirely on the customer experience and ease of business as opposed to a particular vehicle and the price.
But what do customers really want when they purchase a car from one of these sites? Transparency, convenience, and speed. A one-touch sales process may help provide those things, but your dealership's ability to meet these customer expectations depends on your culture more than anything. If you can meet these benchmarks by developing your current staff, a one-touch process may not be necessary.
One of the most annoying parts of the sales process for buyers is sitting around, waiting to be introduced to the used car manager for an appraisal, another manager to approve the terms, and yet another manager for the F&I process. Finding ways to eliminate the waiting, streamline the process, and speed up transaction times will help improve the car-buying experience without making a move towards eliminating all human interactions. Can your current process be improved to minimize the time traps of appraising a trade, submitting credit for approval, and waiting for F&I with your existing staff?
Is your current showroom process flexible enough to allow the customer to pick up on-site where they left off on-line? Are you using your online tools in the showroom to provide information to your sales staff so that the buying experience is similar whether customers are in your showroom or on their computer at home?
Shrinking Profit Margins
Some dealers view the benefits of a one-touch process from a financial standpoint. As margins have been effected by market-based pricing and trade models make it less profitable to sell a car, the next place to control expenses can be reducing how many people get paid per deal.
A one-touch process would shift most of the transaction primarily through a single point of contact. The fewer managers that are above the single point of contact, the more salespeople you could hire while still reducing the number of people that need to get paid per deal.
A more consolidated team may mean that customers are working with more experienced staff throughout the entire transaction. The goal is to maintain or increase current performance while limiting the expense to deliver overall.
Let's face it. Finding and retaining good employees is getting more difficult, especially in the current market. Consider: A more empowered and proficient staff would be a good thing. A higher paid staff should lead to less turnover. Technology may make this more possible than it used to be but requires cross training of current staff and extensive training for new hires to bring them up to the level of expertise necessary to make one-touch successful. To make this level of investment worthwhile, dealers will need to focus on creating and nurturing a workplace culture designed to attract and retain quality candidates.
Switching to a one-touch sales process is not a decision to make lightly, and it may not be the right fit for every dealership. It's an emerging model that could present substantial risks for dealers who leap without thinking it through, but can also provide a better customer experience, more sales, and higher ROI. One recommendation is to consult with a forward-thinking vendor partner who can help you assess whether a one-touch process is appropriate for your dealership and then work with you to develop your business no matter what path you choose.