Transaction Time: Achilles Heel of the Dealership Sales Process
Is lack of vendor integration the root of the problem?
In our recent survey, dealers overwhelmingly agreed that an under-two-hour sales process is much preferred to the lengthy, often four-hour start-to-finish transaction time currently common at most dealerships.
Yet, despite the fact that a full 85% of dealers surveyed think that under two hours is the ideal amount of time for a sales transaction, 42% say that selling a car typically takes between three to five hours—a number that is virtually unchanged from a similar survey conducted a year ago among dealerships, where 40% indicated a sales transaction of three to five hours was common at their dealership.
In the 2015 survey, however, the number of dealers who believe the sales process should be under two hours jumped more than 25 percentage points, from 59% in 2014 to a whopping 85%.
So, if dealers recognize the need for improvements, why isn’t it happening? We know consumers are ready and waiting for the car sales transaction process to speed up. This has been confirmed by numerous studies, including an Autotrader.com study showing that buyer satisfaction starts to decline after 90 minutes at the dealership.
Nearly 60% of dealers agree that specialized best-of-breed solutions are the way to go because of their higher product quality and service levels.
According to our study, a key obstacle to improving the sales transaction time appears to be the inconsistent integration and data exchanges across vendor platforms, which is creating information disconnects and bottlenecks in the shopping process. Today’s consumers have certain expectations during the shopping and buying process—namely, they want to do as much as possible online.
Once their research is finished and they’ve decided on the make and model they want, car shoppers are ready to start the purchasing process by submitting their details online, and even applying for and confirming financing.
In fact, you could say consumers are demanding a change in the car-buying/shopping process by spending more time researching online, visiting fewer dealerships, and expecting more of the process to happen online, including financing. The Autotrader study reports that 72% of consumers want to complete their credit application and financing paperwork online.
Some dealer websites facilitate parts of this online shopping experience with prescreening credit applications and even prequalification tools. Typically, however, once consumers head into the store, much of the information they’ve submitted online is not connected to their showroom sales processes, creating a scenario where information gathering has to start anew, much to the frustration of the car buyer.
Of course, this doesn’t have to be the case. If all of a dealership’s digital retail tools were fully integrated into to its in-store systems and platforms (e.g., CRM, desking and finance platforms, etc.), data sharing would eliminate process redundancies for both consumer and dealer, saving time at the dealership and creating and improving the quality of the transition from sales to F&I. It would also reduce the time spent in the F&I office—the step in the process consumers like least.
But this is not happening. Why? Because of lack of data and systems integration between the myriad vendors and large vendor platforms utilized by dealers.
In a world where a majority of consumers bank online, consumers’ expectation of a transparent online financing experience where decisions are made quickly is growing. But unless vendors start helping dealers connect the online and offline dots, dealers’ hands are virtually tied when it comes to improving the sales process because they are unable to leverage the technology between their preferred service providers.
A full 86% of dealers agree that vendor cooperation and coordination would facilitate a greatly reduced start-to-finish transaction time. Unfortunately, dealers are not optimistic that this can be achieved: 54% of them said that it is only somewhat likely, and 19% said it is unlikely that this type of cross-platform integration will happen in the future.
This doesn’t have to be the case, however. And, in fact, there are already tools popping up to solve some of these issues, like the cloud-based system from DealerVault, which gives dealerships control over the syndication and distribution of their DMS data—regardless of the DMS system they use.
Vendor integration is vital to creating a connected car-buying experience for consumers, which means moving them quickly and seamlessly from the website or showroom floor into the F&I department. It’s time to create seamless, real-time integrations between a dealer website, CRM, desking/finance, and DMS platforms.
2015 eLEND Solutions Survey Highlights:
- 84% of dealers think the ideal sales and financing process should be 2 hours or less (versus 59% in 2014).
- 42% of dealers estimate the average start-to-finish transaction time is 3+ hours (versus 40% in 2014).
- 86% of dealers strongly agree or agree that improved cooperation and data sharing between their vendors’ systems and platforms could eliminate online to in-store information disconnects, reduce bottlenecks, and accelerate transaction times.
- 54% of dealers say that it is only somewhat likely and 19% say it is unlikely that in the future, website, CRM, DMS, and finance platforms will move to an open integration model that supports the dealers evolving sales and finance processes.
- Among dealers who think open integration is unlikely, competition and protecting the status quo are cited as the top reasons.
- 86% of dealers strongly agree or agree that vendor cooperation and coordination could facilitate a greatly reduced start-to-finish transaction time.
Pete MacInnis is founder and CEO of eLEND Solutions, a company focused on providing a more efficient sales and finance process for the entire automotive industry. eLEND Solution’s patented platform streamlines car selling by bringing more functionality online. The company’s suite of products includes CreditPlus, ID Drive, MOBILOT, and eLEND Inside.