Dealers Must Grind Ahead To Deliver An Innovative Customer Experience

A tough grind’s ahead for America’s dealer body as it restructures to deliver the customer experience consumers demand today.

This means radical process, staffing, culture, and technology change. It means reinventing the dealership’s purpose and function. It will be too much for many managers, and some dealers.

Driving this revolution are digital commerce and consumers who breathe all-things-digital.

The upside? A nearly 25 percent increase in sales, according to new research from DrivingSales. All that’s holding this growth back is less-than-engaging and successful experiences delivered by many dealerships today.

Yet for all this, 84 percent of consumers value test drives, and 64 percent prefer face-to-face engagement with dealers, says Edmunds.com. In fact, Millennials view dealerships as test-drive centers, even when buying elsewhere, notes McKinsey & Company in its Innovating Automotive Retail 2014 study.

Experience Bliss

Today’s car buyer wants an Apple Store experience. A website called The Next Web explains these stores are as “simple, dynamic, and stress-free as a visit to Apple’s online store.”

This is the experience benchmark set at Brad Miller’s Toyota of Seattle and Honda of Seattle, co-joined stores. The industry’s also watching AutoNation’s and Sonic’s changes to make their stores’ online experiences transactional and in-store buying processes more streamlined, helpful and fast. Sonic’s shooting for a 45-minute buying experience.

DCH Auto Group, part of Lithia Motors, is five months into a six-store test of what it calls its Evolution Sales Process. It delivers a better customer experience, whether the consumer measures that by less time, a more traditional journey, or engaging with knowledgeable, iPad-equipped associates, which DCH calls client advisors.

“Our belief is that consumers may not always be looking for a faster experience, but they know our process enables that if they want it,” says Kraig Quisenberry, the group’s Director of Sales. “Our initial plan was to deliver a 90-minute experience, but we’re learning from customers that this is sometimes too short.

“With this new engagement model, we’re also seeing higher PVR, and delivering a better customer experience,” Quisenberry adds.

For single-point dealers and smaller groups lacking deep resources, matching larger players’ competitive changes won’t be easy or cheap. The alternative is ugly.

First steps are practical and not unreasonably expensive: deliver the same in-store experience that consumers expect to receive from their interaction on the dealership website.

“Whatever you say and do virtually you must likewise say and do from your brick and mortar, to eliminate experience gaps or disconnects for customers. That’s Job One for dealers in the 21st century,” says Ed French, a former Buick dealer who now operates AutoProfit, a consulting practice specializing in improving processes for new and used car operations.

Change won’t be easy though.

“Toward this goal, the dealer body is at five on a 10 scale — and scratching and clawing grudgingly. It is extremely hard for an industry like ours that loves control to give up control. Discarding the old way of thinking is extraordinarily hard,” French adds. “But consumers vote with their checkbook and they’re voting now to include or exclude dealerships based on their website presence and the initial communication from the selling dealer.”

Millennials likewise love control. Some dealers give them more control of their dealership experience by offering online scheduling, trade-in and payment configurators, and increasingly so website F&I tools.

A Vision for Success

Another dealer working to get there is Herm Brocksmith, president and general manager for Kuni Honda, Centennial, Colorado. The changes he’s put in place to deliver a better customer experience have changed every profit center in his dealership.

He advises dealers to work from a clear vision of what their future dealership experience will look like. Put the vision and plan in writing, and get all stakeholder buy in, he says. Then train personnel to internalize and practice new customer engagement processes.

“Be steadfast in those changes. You cannot let people return to the old ways or let those old traditional ways of doing things creep back in,” Brocksmith says.

Kuni Honda’s innovations include new technologies and practices to shorten a customer’s time for F&I, and a one-price policy and a salaried sales plan. He set limits on hours customer-engagement personnel work, and is hiring and training new talent with hotel and customer service backgrounds, and working moms and retirees. Called Product Presenters, these individuals –compensated by a mix of salary, CSI, reviews by customers on review websites, demo drives given, and units sold – are responsible for the store’s newly branded Unique Shopping Process.

“This means engaging consumers to first ask questions that allow us the opportunity to understand what they’re trying to accomplish, whether a fact-finding trip or they’re deep in the sales funnel,” Brocksmith says.

That’s smart, says French. “Anymore, the meet-and-greet is done virtually, through email or chat. Instead, ask the showroom customer how much research they’ve already done at home. Embrace and acknowledge this.”

The DCH Evolution Sales Process echoes this idea. “Our approach in this new sales process is that people have done their research online and we’re here to fill information and process gaps. We know how a consumer responds when the Client Advisor hands them their iPad and invites them to participate in the sales process. We answer their questions as they use the iPad to review vehicle comparison information, and do their own pricing verification through the KBB.com website. If the customer prefers not to, we have a good idea their sales journey will be a more traditional one. Our advisor training this equipping them with technologies their customers are comfortable with gives advisors more confidence. We believe that along with our extensive, regular advisor training, this approach may help slow turnover,” Quisenberry says.

Tim Jackson, president and CEO of the Colorado Automobile Dealers Association, points to the CarMax model, similar to processes AutoNation is testing, as an illustrative ideal. “With an app, a consumer can find a vehicle that fits their profile. The system locates that vehicle and then emails the consumer with details, the price, and paperwork for review. The customer taps OK and shortly picks up the vehicle at his local CarMax store.?

3 Key Apps

Implement three key “apps” to help deliver this experience, notes Tom Carney, a new-car operations instructor for NADA Academy:

• Speed, in processes, communications, and delivery
• Better art and science for stocking in-demand inventory. Assign someone to monitor the dealership’s own online and social media activities to measure consumer sense of what’s hot in the particular market
• Improved, and digital fixed ops processes, and a customer wait experience that delivers a cozy hangout feeling.

Other workflow and speed enhancers:

• Tablets for advisors, accessories presenters, and F&I
• Digital paperwork processes, in service, F&I, and office that improve compliance and reduce the dealership’s carbon footprint, which Millennials will love.

The High Cost Ahead

Some dealers won’t make it. The resources won’t be there, and perhaps most important, the internal drive to make the changes won’t be. Those that work toward the changes will find that many employees leave.

“Sonic is the test case for today,” says Maryann Keller, principal at Maryann Keller & Associates, LLC. She helps dealers maximize asset value. “They’ve already gone through a lot of upheaval with general management of their stores and tasks to be expected of their sales associates. People often rebel.”

That is Brocksmith’s experience. “Some still wanted to sell like we did 10 years ago and left to go to other dealers to practice them,” he says. “Interestingly, the people who have more easily adapted to these changes have been people my age, in their 50s, who’ve been in this business for years and weathered many changes.”

R.O.I measurement doesn’t change, though.

“We still measure progress and success by every possible variable you can measure,” Brocksmith says. “That means every advertising medium, sales ROI, CSI, and ultimately did you meet your objections in Fixed, Variable and F&I?”