3 Steps to Take Now to Build the Dealership of the Future
Today’s buyers want the best possible deal on a car, and to trust the dealership they’re buying it from
We’re in an age of disruption. Whether it’s Amazon, Uber, or Airbnb, new technology comes out every year that changes an established industry forever.
This can make the future uncertain for auto dealers, who have worked hard to build up their businesses and are wary of being sideswiped by the competition.
Compounding this dealer unease is an ever-changing marketplace where millennials now account for more than a quarter (28%) of all new car sales. By 2025, millennials will hold the keys on up to 75% of all purchases, per J.D. Power.
Millennials like to be in the driver’s seat, but it’s not just control and convenience they crave. These younger consumers want the same thing their parents and their grandparents wanted: To know they’re getting the best possible deal on a car, and to trust the dealership they’re buying it from.
That’s why forward-looking dealers have nothing to fear. By embracing technology that introduces transparency into the car-buying process and builds real connections with your customers, you can quickly rev up sales and accelerate profitability.
Here are three tips to help bring your dealership into the future.
1. Create and grow your social presence
With more than 90% of car shoppers beginning their journey online, most dealerships know it’s critical to develop an online presence. Putting your vehicle inventory online is no longer enough, however.
Dealerships have to invest in advanced social media monitoring tools to get a tighter grasp on what’s being said about them online, and they have to move fast to resolve any issues or misconceptions. Social reviews are the new word of mouth.
Almost half of millennials use them to spread the word about products or services, according to a CrowdTwist study. And with social media offering a direct pipeline to the opinions of friends, family, and acquaintances, it’s vital for dealers to always be on their social game.
Don’t use social only to announce big deals and new financing options. Have genuine conversations with customers and potential buyers.
Ask them about their in-store and online experience, and if there’s anything your dealership could’ve done better. This creates authentic relationships with consumers online, and ultimately builds trust. Before you sell a vehicle, social can help pave the way.
2. Improve the in-dealership experience
With the majority of car shopping now taking place online, dealers need to utilize new technologies to get customers in the door—and not just by supplementing the waiting room coffee and donut supply with free high-speed Wi-Fi.
Cutting-edge dealerships across the country are already introducing augmented reality (AR) into their showrooms to create incredible customer experiences. With AR, customers can customize their dream vehicle and see added features (color, interior, and trim) come to life.
In addition to being fun to play with, this technology helps speed up the sales process because customers can visualize what they’re about to purchase.
A recent Autotrader study revealed that customer satisfaction decreases as the amount of time a customer spends at a dealership increases, so dealers are wise to adapt new technologies to increase transparency and shorten the haggling period.
Another example is a mobile app that replaces the subjective trade-in negotiation process with a real-time car auction that unfolds before the customers’ eyes.
Currently, the typical negotiation takes an average of 21 minutes and as long as 41 minutes, making it potentially the most time-consuming variable in the vehicle sales process.
By utilizing a mobile app that offers real-time appraisals, your dealership can build customer trust and confidence. You’ll sell more cars faster while receiving maximum market value for every vehicle.
Mobile apps can also help reduce “showrooming”—the process where buyers visit your dealership to research a vehicle, then go online to find a cheaper rate from a competitor.
If you can show customers they’re definitely getting the best price, they’ll close faster—and, yes, you’ll probably even get a positive review on social media.
3. Build loyalty
When it comes to models, brands, and dealerships, your customers have never had more options. But that doesn’t mean dealerships can’t cultivate repeat sales and brand loyalty; in fact, studies indicate millennials are the most brand-loyal generation.
To help grow customer relationships and build loyalty, dealers should adopt advanced mobile technologies to help sales and service managers send their customers notifications when their vehicle needs an oil change, new tires, or other maintenance—or to advertise discounts and promotions in an unobtrusive manner.
In addition to sending post-sale follow-ups to drive loyalty, engagement, and retention, dealerships can implement CRM systems to engage potential buyers on multiple channels. According to some estimates, up to 30% of a dealership’s incoming phone leads never connect with an employee who can help them.
With the help of new call center technologies, however, incoming calls can be automatically forwarded to your sale staff’s mobile phones, ensuring they never miss out on a sales opportunity.
Finally, if your dealership deals in financing, it’s time to turn the key on the latest payment tools for your loyal customers.
According to J.D. Power’s 2016 U.S. Consumer Financing Satisfaction Study, when online bill pay is available at a dealership, satisfaction improves 86 points among customers of mass-market-brand vehicles, and both they and luxury-brand buyers are nearly twice as likely to return to that store.
Although the future can be a scary place to imagine, businesses that proactively adopt new innovations to better serve customers have nothing to fear.
By establishing a robust online presence, engaging buyers on multiple channels, and instilling trust and transparency into the buying process, you’ll position your dealership to accelerate profits and outpace the competition.
With nearly 15 years of automotive industry experience Keith Crerar, executive vice president of TradeRev U.S., is a proven industry leader in the areas of auto remarketing and retail automotive sales management. Before joining TradeRev, Crerar held a variety of roles at ADESA, a business unit of KAR Auction Services, a provider of vehicle auction services.