As an agent, it’s likely that you hear your auto dealer clients discuss the recurring pressures they feel each day. They have OEM pressures to increase CSI scores and customer retention, in addition to unit sales. They are pressured to compete with the dealer next door. And, in this era of digital retail, dealers now have consumer pressures to conduct more business online.
According to the 2019 Cox Automotive Car Buyer Journey report, vehicle buyers are moving through the shopping process faster than before as online engagement grows, and digital retailing is poised to revolutionize the car-buying process.
So what can you do to help dealers move past the “This is the way business has always been done” sentiment? It all has to do with positioning.
Put it this way: By simply addressing the need to work with consumers where they are — online — dealers have a robust tool to address both OEM and competitive pressures, taking three balls in the air down to one.
Let’s dig into the details to learn how you can guide your clients through these changing consumer habits and demographics and make a profitable transition to incorporating online and digital sales into their operations model. What may seem daunting can turn into an asset if you position it correctly and help them see the potential profit.
Embrace a Digital Footprint to Drive Buyer Foot Traffic
According to Deloitte’s 2018 Global Automotive Consumer Study, car buyers only visit an average of 1.2 dealerships before purchasing a vehicle. They typically spend just 20% of their total shopping time with the dealership that sells them their car, including the paperwork and sales process.
Referring again to the 2019 Cox Automotive Car Buyer Journey research report:
- 61% of vehicle shopping time happens online.
- Only 9% of shoppers were able to negotiate the purchase or lease price online.
- Only 5% reviewed and signed final documents and contracts online.
- 68% of shoppers who did complete their negotiation online were more satisfied with their dealership experience.
- 74% of shoppers who completed their paperwork online were more satisfied with their dealership experience.
- The time spent researching and shopping for a vehicle decreased 49 minutes in the last two years.
This shortened research-to-purchase time requires clear, concise information from the sales team. Whether online, on the phone, email, or chat, the team must clearly present all of the details, and answer all of the customers’ questions.
Encourage your clients to rethink physical foot traffic to virtual footprints. By embracing these changes, your dealer clients will become more nimble and able to compete for that new customer!
Digital Customer Service, CSI Scores, and Retention
Simply engaging with customers online is not enough. Your dealership clients must also maintain the high customer service standards expected of them in the dealership.
What does this mean? Listing inventory and price online is standard practice. Having a loan preapproval form online is standard. Including a loan calculator online is standard. To really increase online customer service, dealers need to move beyond what is simply standard.
So what is enough? Total transparency and connectedness, starting with F&I.
Some dealers list basic F&I product information online and stop there. Some provide product and term information, while others provide sample contracts on their sites. Some go so far as to let customers complete the whole F&I process online.
If the customer can’t find information on the F&I products on a dealers website, but they can get all the information they want from the competition, whose lot will they visit to complete the sale?
“Once you understand where the audience is coming from, your agency will be better able to help your dealer partners create a robust online presence.”
Putting F&I product information online gives customers time to consider their options and compare products. It helps ensure the 100% rule, and it builds interest in the benefits of shopping with a given dealership before the F&I discussion.
The next step is, of course, putting F&I pricing online. However, this is easier said than done. After all, pricing varies based upon the administrator rates for specific vehicle makes, models, years, and the terms selected by the customer. This requires working with an administrator nimble enough to work with your dealership partners to incorporate online pricing tools within the dealership’s systems.
For less sophisticated sites, simply allowing a customer to request a quote that includes F&I products will keep that dealership in the running for the business.
Envision a knowledgeable customer who is nearly final on a sale, walking into the dealership with specific questions on coverage options, versus an indecisive customer who takes precious time and ends up not buying. Educating customers online and engaging with them where they spend the bulk of their time equals better customer service, higher CSI scores, and more business for your dealers.
What About Social Media and Reputation Management?
Helping dealerships optimize their website is only part of the equation when it comes to digital retailing. It’s equally important to understand how potential customers arrive at a given dealership’s website and to optimize those inflow channels.
Help your dealership partners evaluate where to spend their time by delving into the analytics of their sites. Are people coming from social media platforms, like Facebook? Are they arriving at the sites by third-party inventory listings, such as Cars.com? Are they coming from a simple Google search, or perhaps a review site like Yelp?
Once you understand where the audience is coming from, your agency will be better able to help your dealer partners create a robust online presence by beefing up their profiles, asking for reviews, promoting positive experiences, and conducting two-way communication.
While customers are getting accustomed to instant gratification in other retail industries, dealership personnel might not be able respond to a customer inquiry at 1:00 a.m. on a Wednesday. The good news is that customers understand what is realistic and what isn’t.
According to recent research from EFG Companies, 83% of customers surveyed expect a response from the dealership within 24 hours of sending an online vehicle inquiry, and only 16% want information immediately or within the hour. Additionally, 43% said the more information you can provide online, the more apt they are to visit the dealership.
That being said, actively monitoring a dealership’s online presence for customer inquiries and reviews is vital for both unit sales and customer service. Instruct your dealership partners to stagger time throughout each day for team members to conduct that monitoring. This is also an opportunity for your agency to provide training on how to answer customer questions online and incentivize them to buy with your dealership partners.
Remember, dealership websites and social media assets are quickly becoming the first point of contact on the customer journey. If they do not deliver the information the customer needs when and where they want it, the customer will quickly go to a dealer that does deliver.
The Nitty Gritty
Anyone can say, “You need to conduct business online.” Actually doing it is another matter. This requires training, transforming the dealership culture, and a lot of back-end work to make a dealership website capable of conducting business online.
Before embarking on the digital retailing journey, help your dealers address their internet security measures.
First and foremost, do they have a chief information security officer (or “CISO”) to oversee the continuous monitoring or periodic penetration testing and vulnerability assessments of the dealership’s network security system? Whether managing this internally or through outsourcing, the effort to achieve a robust and continuous network monitoring program is directly tied to the number of networked devices in your IT environment.
Count the number of computers that are set up on your dealership’s network. Now, count the printers, faxes, tablets, and cellphones. That number can add up fairly quickly.
Aside from needing a CISO for upcoming compliance changes, this person will oversee the digital retailing website to ensure that all measures are in place to protect private consumer data.
As an agent, you have a market-differentiating opportunity to help your dealer clients and prospects embark on their digital journeys. By adding the following to your service offering now, you can separate yourself from the competition as an agent that knows how to keep dealerships ahead of industry trends:
- CISO sourcing.
- Secure website development sourcing.
- Digital menu research.
- F&I partners with the capability to support online sales.
- Robust training that includes traditional sales, F&I, and compliance, along with training on engaging with customers online.
Give your dealerships the tools they need to succeed and your agency the benefits to grow its footprint in this new, digital era.
Adam Ouart is vice president of agency services at EFG Companies, where he is responsible for dealer development through a distribution network of top-tier agents.