ShowroomCommentary & Insights

By now we have become all too familiar with the realities of limited inventory, looking for alternative ways to help customers and create profit can give you the boost you need to get through lean times with a little more ease. With our normal trade-in cycles disrupted, customers are facing expiring warranties, increased maintenance, and repairs. The place customers are still doing business face to face is service, putting extra emphasis on needs discovery and solution sharing in the service drive can benefit the whole dealership. Working Together to Grow When we think about Finance and Service it may seem like they operate in completely different worlds, they should be symbiotic. When was the last time you saw F&I Managers and Service Advisors working together to grow in opportunity areas? There is much to gain from these departments understanding how they can support each other’s growth and working hand-in-hand. Service Advisors are the long-term salespeople in your dealership, they see more customers per day than any other sales point in the store, with the most one-to-one consistent contact with customers they have more opportunity to grow relationships and trust. When it comes to building value in service contracts and warranty products with customers, educating Service Advisors in F&I product areas could be key in planting the seed for future purchases and selling contracts from the service drive. Knowledge is Power Consider the exponential increase you will see in service and warranty contracts when you educate your Service Advisors on your F&I products. “Extended warranty” calls have been a long-standing joke for years, they’ve even been made into memes, there must be people buying when the phone rings for us to keep hearing “I’m calling about your car’s extended warranty”. Often those calls are inconvenient and come when customers are not amid vehicle maintenance or repairs. Imagine this offer coming at a time when it is most needed, while the customer is in the service drive, presented by a trusted source; a knowledgeable Advisor could give customers immediate value, relief from repair costs, and peace of mind. Training is Key Providing your team with training on how to drive F&I products will help Advisors refer to those products and their benefits when working with customers, the more familiar customers are with what the warranty and service products provide, the more likely they are to consider purchasing. Often, when introduced to products in F&I, customers have already been bombarded with purchase information, they get to the service and warranty portion and it is more money, more decisions, and they are overwhelmed. Customers are not always in the right frame of mind to process the value of those products. You do not have to train your Service Advisors to sell like F&I Managers, that is where the F&I team comes in, a referral from the Service Advisor to F&I will allow Finance to finalize the details while the customer’s vehicle is being serviced. Having service Advisors who are knowledgeable on the features and benefits of service and warranty contracts is not just an investment towards increased profitability, it is investing in greater customer satisfaction. When your team on the drive has a complete understanding of the products your customer has purchased in the finance office, it eliminates confusion, frustration, and conflict from misunderstandings over coverage when it comes time for customers to use their products. With added training, advisors are equipped to head off potential complaints and dissatisfaction when they can quickly identify misaligned customer expectations,  Building collaborations between F&I and the Service Drive is a solid investment in the future of your dealership, each department builds value for the other and customer loyalty to the dealership. The two also lay the groundwork for and maintain ongoing long-term profit. 

Think about the last time you had a really great conversation.  When I think about a great conversation, my mind goes to those a-little-too-long lunches with business colleagues. Game night with friends on the weekend. Laughing until I cry until the wee hours of the morning after not seeing family for some time.  Great conversations stay with you. You reflect on them warmly, and often, they feed future conversations. They become a part of our fondest memories.  I believe in all of these situations, I am being sold on something.  Authentic Conversations Make for Authentic Sales Interactions  I feel like I must clarify — I don’t want to cheapen the authenticity of these wonderful moments with a sales analogy. Rather, I want to do the opposite. My aim is to enrich the authenticity of sales opportunities by comparison. In those moments, I’m being sold on a good time. I’m being sold on a connection, relatability — a togetherness that keeps me present in the conversation with a desire to keep it going. I feel heard and appreciated.  We should be authenticating the sales experience by tapping into and drawing from those moments. Make customers feel heard and seen at every point in their shopping journey!  In car sales especially, which have high-pressure connotations even with a lack of pointed pressure from sales, a great conversation can shatter the fog of “dealership dread.” A point of connection between shopper and associate can open up the conversation beyond the product. Good conversation puts customers at ease. It welcomes them; they let their walls down a bit.  A.I. and Chatbots - No Human Experience In Sight  This is the age of the digital dealership. Without context, recommending A.I. to accompany your digital dealership might sound logical. Sane even. Fielding your online, or "digital", clients while your team concentrates on delivering the best possible in-store experience is an objectively good idea. Except that these consumers aren't digital, they are humans using a digital platform. How better to set yourself apart with a "wow" than humanizing your digital platform? Sure, the COVID-19 pandemic threw a bit of a wrench in onsite visits. But at the end of the day, if there isn’t a living, breathing person at the end of a dealership’s communication touchpoints — well, let’s just say there are other dealerships down the road, and certainly on the internet. The usefulness of A.I., and A.I.-powered bots, begins and ends at that first point of contact. They can’t hold and sustain that all-too-important conversation.  Let’s look to Carvana briefly. Consumers are attracted to that straightforward process that saves them time. But they still lack that conversational touch that makes great, welcoming salespeople at dealerships a more trusted resource. I believe if dealers can engage in this straightforward way of handling business while maintaining that human connection, they can win big.  A conversation isn’t just a simple exchange of words and information.  It’s so much more than that. In automotive sales specifically, car shoppers are about to make what is likely the most expensive, emotional purchase they can make. And they aren’t just buying an engine, wheels, and seats. A vehicle is an extension of a unique human being with specific interests and lifestyles. Does it make sense to utilize a tool that can’t emote?  How can a chatbot relate to the mother of two who needs all of the best safety features? Or the owner of three dogs who needs ample space for them when they go on their beloved outdoor adventures? A.I. can’t sympathize and empathize with a customer's perspective.  They don’t share that human experience.  Those in automotive sales know that you have to act fast on a lead. Customers need to be engaged promptly so you can keep them on the line. At the same time, it might serve us better to slow down. Ask some different questions upfront - get to know your customers on a deeper level. Discover their yet undiscovered needs.  Create and foster a great conversation. Make this a memorable experience, one that they can reflect on later where they felt like they mattered. There’s something about great conversations that make you want to have them again and again. What better way to build customer loyalty than by bringing that human experience to each and every sales interaction?  No matter what, in and out of the showroom: keep having great conversations. I know I will.

Native Connected Car Services Now Coming to Dealerships In past articles , I've touched on the many services that dealers can expect from Connected Car technology. Some of these have included vehicle location, lock/unlock, key management, theft notifications, diagnostics, inventory audits, loaner and demo administration, service reminders, and many more. Together, these services promise to increase dealership productivity and reduce costs, while improving customer satisfaction and retention. Today, Connected Car services for dealers mostly rely on independent third parties, using aftermarket OBD2 plug-in devices for data collection. There are many capable providers offering these dealer-focused connected services. Some good examples of these include Spireon LoJack , Dealerware , and Geotab . But, as I've also mentioned in past posts, vehicles increasingly come equipped by the OEM with built-in telematics systems that can provide the data and commands needed for dealer-focused connected services. And, some service providers are beginning to take advantage of these native connections for a limited range of services, particularly in the management of loaner fleets.  Connexion Telematics and TSD Solutions are offering these connected services, with the support of select OEMs. And finally, some OEMs are now beginning to offer limited dealer-focused connected services directly to dealers – mostly focused on post-sales & delivery as well as service-based customer retention. OnStar’s Dealer Maintenance Notification is one example, in which Dealers are notified when vehicle diagnostic codes indicate an upcoming need for service.   The choices for connected services available to dealers will continue to evolve rapidly as more of these OEM-provided connections become available, and as new dealer-focused connected services develop. Fleet Industry Offers a Preview for Dealerships For a window into the way that services are likely to develop in the next 18-36 months, dealers can look to the experiences of the Fleet industry. Fleets have been using telematics to manage vehicles and drivers for many years now, with obvious benefits in terms of additional uptime and increased driver productivity. These benefits have easily supported the development of several fleet telematics providers. As with dealer-focused connected services, Connected Fleet services were all originally delivered through third-party, aftermarket devices – but they are increasingly delivered through native OEM-provided connections. Most fleets include vehicles from more than one manufacturer, so there is a natural inclination for fleets to use brand-independent fleet telematics providers. Companies like Geotab , Donlen, FleetComplete, Spireon , Samsara and others offer comprehensive fleet management solutions that were all originally powered by aftermarket plug-in devices. Increasingly however, OEMs have enabled native data connections to these providers in response to demands from their fleet customers.  Ford Data Services , OnStar Business Solutions , and Toyota Data Solutions all offer connections for fleets through fleet telematics partners. Fleets can go to a provider of their choice and take advantage of OEM data connections when available, or use aftermarket connections for older vehicles or for OEM makes that are not yet capable of connecting to fleet applications. To create further options for fleets, some OEMs have also begun to create their own proprietary fleet management systems. GM offers its OnStar Vehicle Insights service, which provides comprehensive fleet management services. And in a recent announcement , GM is making OnStar Vehicle Insights compatible with aftermarket devices. Ford has also announced a similar move. Expect Similar Offerings, Options, and Interoperability for Dealerships These trends in Connected Fleet services point to the kinds of options that dealers should expect in the next 18-36 months. Dealers are similar to Fleets, in that most represent more than one OEM brand, plus used vehicles of varying ages. Dealers should therefore expect choices for their Connected Services between: Independent Service Providers using plug-in aftermarket devices Independent Service Providers using both aftermarket devices and OEM data feeds OEM-Designed Services using both OEM data feeds and aftermarket devices As fleet owners do today, dealers will need to choose the service provider that provides the best-connected services for their particular situation. It is a good idea to get started with an independent dealer-focused provider to begin to experience the benefits of Connected Dealership Management. An independent provider can get dealers up and running quickly, using easily installed aftermarket hardware. As dealers learn how to use these services effectively, they can then consider some of the OEM-provided or hybrid options as they come to market. 

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. 

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!

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.