ShowroomCommentary & Insights

Showroom
hammer on car
2021: Will Your Car Dealership Go From Success to Hot Mess?

By

I’m not one to sugarcoat a crisis, but the pandemic has created at least one happy consequence for car dealers — vehicle shortages . With people everywhere urged to avoid public transport and chip shortage, car sales have hit a record high and demand continues to outpace supply.  So after years of making very little selling new cars, dealers are finally laughing all the way to the bank. No matter the franchise, no matter the location. Car dealers everywhere are having their day in the sun.  Do you know what that means? Some will get burnt.  Whether it’s in 6 months or 12 months, manufacturers will catch up and flood the market just like pre-pandemic days. And the car dealers who did nothing but bask in the glow of their success? They’ll start to feel the heat.  The best car dealerships know that success has a nasty habit of breeding complacency. So while the foolish rest on their laurels, the wise are working to future-proof their businesses.  The best are using this opportunity to examine what’s working (and what’s not working) in their business; their strengths, and their weaknesses.  They know that it won’t be long until competition for buyers is back on, and they’re taking proactive steps to finesse their operations; now, not later.  They’re getting ahead quite simply by getting ahead.  Make sure you’re one of those dealerships. Otherwise, instead of laughing all the way to the bank, you’ll be crying all the way to the bankruptcy court.  Now is the time to ask yourself this: What is your dealership doing to improve and prepare your operations for the future? Remember that when demand exceeds supply, sales training and excellence take the backstage. If you’ve got the cars, the customers will come. But when things reset, will you be out of practice? Out of shape? Out of step with the car dealers that took the time to get organized and stay ahead of the game?  If you’re not sure how to answer that, consider how much time your dealership spends fine-tuning these all-important aspects:  Sales Processes How regularly are you reviewing? When you review your sales, are you considering not just quantity of sales, but quality ? Are you confident in your staff’s product knowledge? Are they confident in their product knowledge?  F&I Product Lineup  When was the last time you took a good hard look at your finance and insurance product lineup? Are you sure it’s up to date and working hard for your business? How about your reinsurance structure? It all adds up. Readiness to Buy  No well-meaning car dealership would wish failure on another, but the hard truth is that not all dealers will survive the downturn. Are you ready to mobilize cash quickly when the opportunity comes to buy a dealership?  Advertising and Marketing  Sure, you don’t need it right now. But when supply outweighs the demand, dealers will be competing to turn customers' heads. Will you be placed to shout the loudest? Plan out your advertising and make sure you’re ready to make that investment when the time comes.  These are just some of the strategies that will separate the winners from the losers. The good news is that there’s still time to decide which side of the line your dealership will be on.  These good times are well deserved. But don’t expect them to last. Even more importantly, don’t get caught out when the tide starts to turn. Use today’s flush to build a better, more resilient business for tomorrow. 
car retail idea
The Automotive Retail Shift

By

The automotive industry on the retail side has been seeing some nice profitable shifts in recent months. Here we are in the hottest-selling part of the year and we are dealing with supply and demand issues. While it is a beautiful thing to watch dealers be profitable and command the market for a change I am worried about what will happen to our selling skills for the future. Right now anyone can be a superstar and gross $4,000 per unit just by showing a vehicle and going through a few steps to the sale. But what happens when supply levels come back to normal? How will we be able to maintain the same level of profitability while selling three times more units? I make it a point to look at inventory at some of the biggest dealerships in the nation to truly understand what our fellow partners are going through. I see Facebook groups that include retail automotive professionals from all walks of life posting pictures of empty lots and explaining how they cannot even put cars into showrooms since they are selling fast. These are scary times because dealers cannot afford to slow down. This is such an expense-driven business that we must continue to progress forward. I even saw a few posts where salespeople complained that their dealership is cutting pay plans because they are paying out way too much money for people that do not deserve it.  The big question is how do we move forward? We must remember that historically our industry has been resilient through the toughest times and came back better than ever. It will happen again very soon. We are in a business that forces “survival of the fittest” and things will normalize again. Now is the time to think about how we are going to sharpen our skills. Let’s get back to focusing on customer service. Let’s get back to focusing on building our sales and marketing skills. It is time that we take matters into our own hands and take control of our own personal development. Ralph Waldo Emerson once said, “The only person you are destined to become is the person you decide to be.” We must refuse to be stuck in continuing to do everything the way that we always have done it. The automotive retail shift has incorporated new ways for us to sell and acquire vehicles. Technology has given consumers the power to shop and be more knowledgeable than ever before about vehicles and the shopping process. It is time to train, self-develop, and improve how we handle our business. I recommend fifteen minutes of personal development daily every morning by reading a good book and watching some wonderful inspirational YouTube videos.  Additionally, we need to invest in training our people at dealerships. We need to empower our people to use our tools better. It is time to master the CRM and finally use it the right way. It is also time to create a process to use digital retailing tools to improve how we negotiate and talk to our customers. If customers will not start to embrace digital retailing the way that we as an industry planned then we need to once again take matters into our own hands and use these tools to improve our own salesmanship. Opportunities to improve are all around us. Let’s grow!
ev charging
The Coming Wave of the Electric Vehicles and the Impact on Auto Retail

By

The State of EV “Oh we gonna rock down to ELECTRIC AVENUE!” We have all read and heard the recent headlines around the auto industry. Electric, electric, electric. It is coming fast and furious! Depending on the source, the forecast for future electric vehicle sales vary, but recently with all the activity the sources and forecasts are starting to align on the growth potential and likelihood as being significant and expansive. It will no longer be a splinter niche customer set, but rather a significant profile and proportion of sales and even trending towards the majority. According to a few sources, the likely truth will probably be somewhere in the following projections and forecasts: Sopheon notes that the additional product offerings coming could push global EV sales to between six million and 11 million by 2025, rising to between 11 million and 19 million units a year by 2030 The real interesting pieces come from IHS Markit's forecast for 2021 and beyond. This year, the firm believes we'll see electric cars take a market share of 3.5%, just about double from 2020's number. Fast forward to 2025 and the company forecasts EVs will make up 10% of all new cars sold. That would be a massive shift in buying trends . According to Edmunds, by the end of 2021 there will be 26 electric vehicles available for sale across the sedan, truck and SUV segments. That is expected to grow significantly over the next 5 years with as many as half the models for sale in 2025 having EV options. So EV is here and coming in an even more substantive way. What does it all mean? How will car buying, owning and servicing change? What does this shift do to retailers? In fact, what will the very retail footprint and experience need to look like to accommodate this market disruption? A few quick questions I have heard? Do I need to treat an EV customer different from my “normal” customers? Will I need a separate showroom or sales process? How will this affect my service business? What other considerations will I need to train my staff for in selling EV’s? The answer to each one of these is that there will be differences and nuances that need to be accounted for with EV customers and products. But the amount of change needed depends on your current dealership’s focus. If you are a retailer focused on customer experience and lifetime value as two key driving forces and metrics of success, then the change may not seem as drastic. If your store is more transactional based and price and profit are the only main drivers of operations, the EV customers and opportunities may be tougher to capitalize on. So What Really Changes for Retail? We Just Sell Cars, Right? Wrong. The bottom line is that the very retail model will have to adapt and shift. Retail will not be about moving product, or transactional based, but it must become first and foremost centered on experiences. Electric vehicles require a different value proposition as part of the sales process. The service experience will also be very unique for these products and owners. The focus needs to be on truly meeting the customer’s needs, value, and overall experience. Retail itself must become synonymous not just with the purchase, and not just the physical in-store engagement, but rather the entire customer engagement process along their entire journey. There was already major transformation coming in the industry due to technology and customer expectations, but the significant uptick in electric vehicle availability, sales and ownership will continue to disrupt retailers to become more of a mobility platform and mobility experience center. Rather than try and detail all the changes that will have to come and the capabilities that retailers will have to develop, consider the following graphic. This is just a high-level framework of some thoughts on how a future auto retailer will have to focus, operate and thrive. We can certainly debate the major function headings, or the specific services and functions themselves, but the fact remains that even if 80% accurate, this is quite a shift from the current operations and focus of today’s retailer. Why will this shift happen? Notice I said “will” not “if” or “might”. There are too many disruptive forces coming to play into the auto industry and the auto retail environment. Major Challenges and Disruptions Growing customer expectations (On Demand Economy / Instant Access) Mobility needs shifting Disruptive technologies (Connected, 5G, Autonomous, Electric, Digital) Electric vehicle growth (global view and movement) Autonomous vehicle technology On Demand services (including vehicle features themselves) Covid after-effects / Urban exiting / Virtual working (commute) Increasing mobility choices (mode, access) All of these factors and many more will demand a new retail model. One that engages customers to meet their mobility needs in any and every way possible. That will need to include micro-leasing, access on demand, fleet / rental options, subscription services, mobile services, downloadable software, pay-by-the-mile, features-on-demand, and much more. Imagine a customer virtually test driving a vehicle, and specific features and accessories via virtual reality from the comfort of their own home. Then having the electric vehicle for the weekend, dropped off at their house. They return the vehicle to the dealer, cash in their energy tokens, and then purchase a mobility monthly subscription pass for the dealer’s mobility platform options. Sound far-fetched? It is happening in pieces through various companies and channels now. It will be up to auto retailers to become the one platform to provide (or at least manage) these services in order to keep customers engaged and to be sustainable and meaningful into the future. Shift Happens So how do retailers get ahead of this rather than trying to chase the opportunity when it is too late? This must happen with adaptive strategy and operations. A few key action plans include: Assess what drives your operation and how can it become more customer experience focused (what you measure is what will matter) Continually develop customer data and insight to always be prepared to meet the customer where they are in their mobility needs Begin to view and structure your operations not as departments, not as inventory and assets, but as seamless and frictionless enablers to capabilities. Define your North Star. What will make your dealership different? What will truly separate your customer experience from the dealership down the street? Enable employees to do what is right, not what is standard and expected. Leverage technology to enable frictionless experiences, not become more cumbersome. Always be customer-focused, agile and adaptive to their shifting needs These capabilities will insure deeper customer connection and engagement. What you sell in the future may change, but it will not matter if the basic customer experience is not there now, tomorrow and along the way; because your customer will go to where they can receive the best experience. Customer experience is the bridge from the present to the future, from the known to the unknown. Our future monthly operating report and operational structure will look much different than today, but the core customer experience fundamentals must exist continuously to survive and thrive in that new world.
Mask-less Socialising: What This Means For Your Dealership

By

There will come a time, sooner than we think at this point, where we'll be living in a post-COVID era. We'll be back at our favorite crowded bars, our kids will be in school — real school — and we'll be on the road: business trips, family vacations, and holidays.  But while we may be able to share the air with others again, the remnants of COVID will still linger. Predictions are that many retail habits- like curbside pickup- will be ingrained in our society forever. And considering the amount of new proud Peloton owners (seriously, check their stock), I'm assuming at-home and on-demand workouts won't be going anywhere either.  So what does this mean for your dealership? Just because we'll hit a post-COVID era does not mean dealerships should do away with some of the accelerated technology adoption and customer service accommodations derived from the pandemic. Quite the opposite: dealers should expect a shift in retail behavior forever.  Full funnel digital commerce  COVID introduced new emerging markets to automotive that helped the industry's fast economic rebound starting in 2020 Q3. Millennials, one-car families, New Yorkers. It was therefore imperative for dealers to have the technology in place to reach those buyers; efficient, hyper-targeted campaigns to attract new customers during a time of financial stress and uncertainty. The dealerships that were able to switch on and off messaging instantly, leverage streamlined data, and automate marketing campaigns were investing in full-funnel digital commerce that makes 1:1 matches between the shoppers and inventory. Reaching your customers with technology-driven marketing will stay relevant as buyers shift even more focus to online and pre showroom visits. Your dealership should have the infrastructure in place to target and engage all funnel shoppers, anywhere, including a top-notch browsing experience on your website, even if you see an uptick in showroom walk-ins.  Shortening in-person visits Even if there is no rampant pandemic, no one will want to spend their entire Saturday inside your dealership. This was true pre-pandemic and even more true post-pandemic. Dealerships that kept up excellent customer service during COVID were able to shorten the time in-store and do as much as possible before the customer visits. As the average in-market shopper only visits 1-2 dealerships, you need to make sure your dealership accommodates for the new normal that will never go back: less time indoors, less contamination, more efficiency, everywhere. Dealerships need to set up the closest thing to curbside pickup — or curbside test drive, if you will — to keep customers in-line with their new shopping habits. Less friction and more efficient appointment setting will be key. Facilitate the sale While facilitating the sale was always the number one priority for dealerships, consumers have a new level of expectations that we need to take into account. We've seen the world go upside down, and with that, business models adapt to continue to reach consumers in any circumstance. Curbside pickup, drive-though testing sites, cocktails on-the-go. Dealers should gear up to continue to provide virtual trade-in evaluations, solo test drives, service pick-up/drop-off at home, and more because shoppers now know this is an option and may very well prefer it. Consumers have become "spoiled" by the flexibility of the new normal and it's predicted this will dictate many new retail habits in the future. Make it easy for your shoppers and facilitate the sale to accommodate all funnel shoppers.  So yes. There will be a time where we'll all be back at our favorite pubs, hugging family members, and going into work. However, COVID has changed the face of business and customer service and dealers should prepare to stay competitive in this environment. It's about continuing the best practices that kept automotive strong in 2020 and beyond. 
Creating the Ultimate Dealership Customer Experience

By

I was talking about mindset with my good friend Tommi Weeden and I was explaining to her that sometimes I work with guests that require A LOT. What I meant by that is they seem to take longer to get through the process. They can be walking "time bandits" in all honesty. She told me something that really resonated with me. Tommi told me: remember that everyone is different and we all process things differently. For this reason, don't look at your customer as "high-maintenance". Consider them "white-glove". That's when the lightbulb went off for me. Reframe Your Mindset White-Glove by definition means marked by special care or attention. By shifting your mindset and reframing from a negative to a positive, the whole experience is different. These days, automobiles, for the most part, have become commoditized. Meaning, unless it's a rare used car with low miles and custom modifications, or a new car with limited production, when they want a new car, the customer can send out the same email to ten different dealers and the race to the bottom is on! Therefore, we must focus on the customer experience, now more than ever before. The manufacturers are pushing this with surveys and secret shoppers on the customer's side; while simultaneously tying the dealers' trunk money to various programs that sound like alphabet soup. If you don't achieve certain metrics on these surveys, your dealerships' payouts are reduced, or altogether eliminated. Working at a Cadillac-Buick-GMC dealership, I can tell you firsthand, they want us to create what they refer to as, "Cadillac Moments". This is the "wow" factor. Honestly, it's not a bad idea. It's also not something we needed the factory to convince us to do in the first place. After all, you can't retain customers if they don't enjoy the experience. For us, this is second nature. To a struggling store who has bad or no processes, these factory programs can be life saving for the dealership's longevity. Consider These Four Questions To Create Your Dealership "Wow" Factor What are some ways you can personalize and white-glove your guest's experience? How can you surprise and delight your customers? How do you create lasting, memorable moments with your customers? What can you do to make the deal appear to be quicker and simpler, regardless of how long it actually takes? Why not start out with something as simple as offering them something warm or cold to drink when they come into your office? Find out if they are purchasing the vehicle to celebrate a recent success or promotion and make this all about THEM! The purchase of a new vehicle is a VERY exciting time for many people, and this is a simple way to build excitement with them. How about finding out what kind of music they like to listen to ahead of time, and have that playing when then enter your "House of Happiness" as my mentor GP Anderson would say. When you are about to give them two tickets to the magic show, why not make them as comfortable and relaxed as possible; this will result in giving you and your dealership a competitive advantage over your competition.  By custom tailoring your presentation and your behavioral interactions with each guest, you will ultimately build and develop deeper loyalty and trust with each customer you engage. You can really only achieve this by taking the time to understand and even anticipate the needs of your customers. This allows you to "outrun" objections to issues prior to them being raised by the customer, thus preventing issues and resulting in a pleasurable experience for your guests. You have to do the deal and process the paperwork, regardless. Therefore, why wouldn't you make it fun for you AND the guests, and by doing so, increase your grosses and your ultimate satisfaction with the process? This to me sounds like More Winning! #bing #noextrachargeforapositiveattitude
Make Your Paycheck Great Again: The Squirrel Doesn’t Get All Its Nuts from One Tree

By

Over the past few months, I have had what seems to be a recurring conversation with a variety of people in my circle of influence. Today, while prepping some deals that were coming in later in the evening, I sat down with one of my best salespeople at this dealership, Joe Cleland – and he was the inspiration for the title of the article you’re about to read. If you were intrigued by the title of this article but are still asking what the heck the #kingofbing is talking about, it’s three simple words – Assembling Your Paycheck!  I told Joe that I was taught back in 2003 when I started selling cars at the local family-owned Chevrolet-Honda-Pontiac dealership in Boulder, Colorado, that the key to making it in this business is highly dependent upon your ability to make money. However, sometimes the way we look at the deal or the sale is too narrowly focused, and we forget about all the various ways there are to make money on a car deal. I was taught to pretend that the showroom and the dealership are covered in cash, because it is. There is money everywhere if you look hard enough! Sadly, some people will walk around the store, see a $10 bill on the ground, and not even stop to pick it up.  Simply, all you need to do is take every opportunity to maximize your pay plan. Instead of looking at the sale of the car as a “mini” or the buy rate deal as a “flat”, look at all the numbers involved. Turn over every rock that you encounter along the way down the road to the sale. You might see a $20 bill under one. Look a little closer, and you might see a $50 bill under another one. Hell, you might make $420 if you get really good at what I’m talking about! My point here is the commission on the car deal is just the beginning. There are the F&I spiffs, the parts department spiffs for accessory sales, the referral fee for sending in neighbors and friends, and family members to do business with your store. The bounty placed on the used car you can find for the store for the dwindling used car inventory. The factory sometimes has spiffs for achieving certain volume standards, such as Mark of Excellence with General Motors. Perhaps selling a GM Card can provide some earn power points that can be redeemed for merchandise or cash in your bank to pay bills or go on vacation. OnStar and XM Radio sometimes have spiffs available for upgrading products your customers are already going to sign up for, to a degree, so why not capitalize on that also.  You have to be creative and willing to do the impossible. You have to spend time working on your words – what you will say and when you will say it. I once heard someone say, if you want what I have, then do what I do. The problem is, most people, especially people in sales, have a high propensity to take the path of least resistance. It takes effort and persistence, and discipline to assemble the paycheck you want to have!  This is why it is so important to use your time wisely every day. You need to always be on the lookout for the next opportunity in your store where you can add value. Spend your time crafting your pitch and building your process to perfection. Remember to feather in ALL of your income opportunities so that every turn you take with each customer is maximized to its fullest potential.  Like our friend the Squirrel, you have to grab a little bit here and a little bit there. One dollar at a time and from all over the park, tree by tree. This is how you make your paycheck great again!  #bing