By AM Strategies Founder & President, Kathy Cunningham
Nothing is more top of mind in the automotive industry than the customer experience and the tectonic shift that must occur for retail dealerships to survive the next decade. As a thirty-year veteran of the industry, I can personally attest to the urgent need for change and the imminent danger in ignoring the new retail landscape.
The automotive industry is no stranger to change, so what makes today’s discussions different? Rather than changes focusing primarily on the technical and mechanical innovations of the business, innovation is happening on the consumer’s end, centered around accessibility to and control of information.
What Consumers Want, Consumers Gets
Let’s look at the new retail customer. Marketing Over Coffee Podcast talks to the author of Flip the Script and Pitch Anything by Oren Klaff. “People don’t want to be sold to anymore, he says. They want to shop and gather the information themselves, compare and verify it, and then come to you.” When consumers decide on their own, you are the best choice for their shopping experience; they’re much more likely to close a sale with you and then also refer their friends and family to you.
As with retail in general, the dealer can no longer control the buying process. The power has shifted, and the customer is now in the proverbial driver’s seat. Dealers would do well to accept the power transfer and create a level playing field so that their brands can center around the buying experience rather than around the price.
Why, because players like Amazon, Tesla, Carvana are threatening to disrupt the automotive industry and reshape customer expectations in a big way. The shift is already happening!
Challenging the Traditional Role of the Middleman
Just like in the travel and taxi industries, new players are entering the space, and the middleman is getting squeezed out. Franchise laws protect the new car dealers’ position between the manufacturer and the customer. However, with the increasing availability of information, online consumers are well-versed in what car dealers are selling, making, and not disclosing to the public.
Even though they are armed with this knowledge, consumers sometimes feel like they have no power and no alternative options for buying a car. That feeling creates a space for companies like Carvana, Tesla, and Roadster to disrupt the ecosystem and provide shoppers with an alternative digital experience that empowers the consumer with new tools to control the buying process themselves. Which begs the question, if you could buy a car without going through a traditional dealership experience, would you? More and more consumers are saying, yes!
This traditional model has meant that the retail dealerships have control over the vehicle transaction and use a high stakes pricing strategy to capture shoppers’ attention and win sales from the competition. Focusing solely on price, over time, drives profits and brand value down, drives up competition between dealers, and sets the consumer up for a stressful negotiation of, “If I could/would you today?”
The New Retail, A Look into the Future
There is a tremendous opening for the first dealers to take advantage of the opportunities to fill the giant hole in the customer-centric dealer space and add value to the coveted middleman position in the transaction.
Automotive News features one of the first dealers embracing the new retail in a recent article about how Jason Quenneville, General Manager of White River Toyota, has built a customer-centric sales process for his dealership that honors his employees and his customers. Quenneville has done this by simplifying operations. His dealership has:
- Eliminated all but one lender from the finance process
- Merged the Business Development Center and Sales departments, allowing salespeople to follow the consumer through the finalization of the sale
- Recorded video tours of its cars so consumers can preview them online
- Eliminated interest markups
- Displayed vehicles in the lot by model
- Closed the interest rate gap between Caucasian customers and minority customers
In addition to these unconventional administrative evolutions, Quenneville has instituted a Master Key system, wherein his salesmen supply keys to customers that will unlock any car in their lot so that they can test-drive any model at their leisure! As a result, White River Toyota’s sales have gone up 63% since 2014. The dealership makes more money than the average in the area, and salespeople are employed longer than the average salesman in the industry. Quenneville has addressed the major pain-points in dealerships, cultivating a comfortable environment for his staff.
This kind of disruption takes tremendous courage and leadership, and I know, having personally gone through it, that it also takes a strong team commitment to leave behind the traditional ways of the automotive world.
Ask yourself this – what changes are you making at your dealership that make the buying process more customer-centric, fun, fast, easy, and transparent?
The New Face of Retail Sales
One way to change the buying experience is to hire a different kind of salesperson. I recently attended a conference for Women in Automotive, which featured the fabulous women who work, thrive, and love the industry just like me. Almost a thousand women gathered in Orlando, Florida, in June. It was there that I had the honor of interviewing Amanda Hoffman, the Everywoman Award Winner, who represents the new generation of automotive salespeople.
Amanda talked about how she fell into an automotive sales position coming from corporate America. What’s so fascinating about Amanda’s story is she had the skills, drive, desire, and the need to make a living in the automotive industry, but her sales floor story began with the rejection she felt from an all-male staff and how they mocked her appearance, sales experience, and courage to be a top performer. One veteran salesperson even wagered his entire year’s salary that she would never beat him in sales. It didn’t take her long to prove him wrong and become the top salesperson in the dealership.
Amanda wasn’t burdened by any old fashion ideas on how to sell cars. She brought her personality and her experience as a mother to the selling process, focusing on personal relationships first and sales second. She also brought a youthful energy to the process, taking advantage of social media and texting, to open new lines of communication with her customers and make them comfortable with the sales process. As a result, she sold cars to people which the number one salesman wouldn’t even have talked to. This kind of authenticity, coupled with her commitment to working hard every day, helped drive her exceptional results. I think she’s proving how you can disrupt the industry from the inside.
Listen to my interview with Amanda.
Marketing a Customer-centric Omnichannel Brand
Today, marketing is an omnichannel game. It must be branded throughout all touchpoints, but also fluid so that a customer’s experience can transfer seamlessly from your website to your brick-and-mortar dealership. The customer’s experience should be the same whether they choose to complete the sale online, or in your store, and their information needs to travel with them so they can pick up where they left off in the purchasing journey.
Could you use some guidance on the development of your customer-centric experience from the Internet to the showroom? At Advanced Marketing Strategies, we’ve been there and done that, and already seen the revolution in action. We helped shape a customer-centric experience from branding and marketing – to the showroom floor and guided the development of one of the most revered automotive brands in the country. If you’d like to hear about how we can help lead your team through the process of changing your customer journey and build a marketing strategy with an omnichannel brand experience, give us a call.
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