We know the internet has changed us all. In fact, many professionals in the auto industry believe that vehicle consumers in the future – as soon as five years – will not only be making their purchase choices for new and used vehicles online, including financial approvals and payment plans but will have their vehicles delivered to their door, never having to even show up at the dealership.
This is not a new premise, as pioneering companies such as Model E in San Jose in the early 2000s were doing this very thing. Model E also set up car care and maintenance programs in which the customer’s vehicle was secured in a van and transported to and from the desired service, as well as providing a comparable quality loaner vehicle. And there is a move nationally with more and more auto organizations doing this, exampled by companies such as vroom.com and beepi.com.
Ready or Not, Changes are Coming
Are you going to be ready for changes? An excellent detailed dissertation of this developing automotive “phenomena” is taken from a recent online quote from Randall J. Miller of EY, an international consulting firm:
“Automotive retail will shift from a product-driven to a customer-centric approach to drive customer loyalty and to adapt to changing customer behavior and expectations. The rise of new mobility preference of private and commercial customers (e.g., private-and business-car sharing, electric vehicles and an increasing role of used cars and fleet) are causing automakers and automotive retailers to rethink their current business model.”
Another adjustment we will have to accomplish at once is with women and their part in our growth. It is no longer “Them.” “They” are now “We.” The industry can also no longer avoid the importance and developing awareness and demands of the woman vehicle buyer, who is responsible either directly or by influence for 85 percent of all vehicle purchases.
Additionally, their position and shared needs in the strongly influencing Millennial group is now a major factor in the need to not only offer an auto purchasing environment that will actually attract them as sincere buyers and develop long-term loyalty, but also provide them with respect and equal considerations in pricing in both sales and service. Women are tired of the unpleasant treatment they have received from macho salesmen and even dealerships. They are aggressively demonstrating their aversion to this annoyance by shopping either online or directly with others, until they finally communicate with a business that provides them this respect. The cheap-dressing cigarette-puffing macho salesman of the past has to be eliminated.
And what about technology? Sarah Jones, reporter for “Luxury Daily,” writes of the Apple Store effect in “Dealerships of the Future May Resemble an Apple Store.” “The Apple Store ethos – seamless customer interaction, effortless problem solving, speedy service – has become the benchmark for retailers of all stripes. This customer experience is integral to Apple’s success as its elegantly simple product designs, compelling the company’s faithful to line up to buy its new products.
It’s All About Pleasure
It’s finally happening: The demise of “Horse Trading.” The days of this type of behavior occurring at the dealership level is rapidly becoming unacceptable to consumers. The majority of today’s buyers – with the largest segment being women – are simply not into negotiating, nor do they enjoy any parts of the process at all. Nor have they forgotten the tension-free pricing experiences of Saturn and Scion’s “Pure Price,” and other programs with Mini and Tesla, which are experiencing great success in attaining both customer approval and increased profits.
Realists in the industry know where this is heading. Customer pressure is off, and they are enjoying genuine positive customer experience. A positive customer experience not only translates into additional program participation but increased loyalty return and positive referrals. Not to mention glowing Yelp postings for their organizations.
It has to become a pleasurable experience. As Jeff Zurschmeide points out in “Digital Trends”: What is the bottom line? “Competition to bring you the car you want at a better price and with less stress. (This) is driving innovation throughout the automobile industry. More efficient competition to buy your old car and sell you the next car is going to give you better prices at both ends of the transaction.”
Keep in mind also that today’s higher-quality manufacturing processes have provided us with dependable vehicles in almost every brand, taking that much of that concern away as a major consideration.
Changing the Culture
So. How do we change our culture to ensure a successful future in our dealerships? Here are some of many suggestions we need to implement as rapidly as possible:
- We need to lean forward from our chairs, eager to examine new trends. Putting awareness off to a more “convenient” time will leave our organizations in the dust behind those which are exploring new avenues, new trends, and listening to ever-changing needs. Complacency contributes directly to eventual failure.
- Eliminate antiquated customer interface programs that may be interpreted as “game-playing,” such as “4 Square,” and stop telling our customers that we will “talk to our managers” for better pricing. Transparency is the operating word. Continuing to use these programs insults our customers. They are more informed and knowledgeable than ever before, and will take their business elsewhere if they feel a lack of respect.
- Start thinking from the needs of the customer, and avoid programs that pit “them versus us.” Example? Evolve from the worn-out “Customer is always right,” to “We can both be right.”
- Re-focus our programs to focus on trust issues, improved positive customer experience at all levels of the organization, and consistent transparency.
There you have it: At least partial considerations for changing the culture and the future of your business.
To hear more from Jody about the importance of dealership culture changes, watch our interview here.