On today’s show, we’re pleased to welcome back Mo Zahabi, Senior Director of Product Consulting at Cox Automotive. In this segment, Mo and Jim continue their conversation about how dealerships can implement digital retailing strategies, common mistakes in this space, and practical solutions to solve them.
To watch Jim and Mo’s first interview, click here.
Jim Fitzpatrick: Hi, everyone. Jim Fitzpatrick on CBT News. Thanks so much for joining us today. Today, we’re excited to have with us Mr. Mo Zahabi, who is Senior Director of Product Consulting at Cox Automotive. Thanks for joining us, Mo.
Mo Zahabi: Thanks, Jim. Thanks for having me again.
Jim Fitzpatrick: Sure. Last time you were in, we talked about digital retailing and some of the things that Cox Automotive is working on today. What are some of the key factors in the shift towards implementing digital retailing solutions in dealerships?
Mo Zahabi: Well, I think the biggest ones are obviously in the expectations of the consumers and they’re changing greatly and more so every day. They’re driven by experiences obviously like Amazon. For example, you think back Christmas 10 years ago before we had all these retail avenues, all the extra work we had to do to leg out Christmas presents. If you’re like me, I travel a lot so time is at a premium for me, and then on the [crosstalk 00:01:02]-
Jim Fitzpatrick: That’s right.
Mo Zahabi: Weekends, probably a little bit worse because I coach sports, too. Me going out to a lot to experience a vehicle, experience the options, I just don’t have the time for that, and that’s a lot of consumers out in the market. That’s going to be one of those things that really drives this experience of what customers are expecting, a better use of their time, and a more relevant experience overall.
Mo Zahabi: I think the other part of that is going to be personalization for the customer, and who better to personalize for a customer but themselves. We know through research that 90% of consumers prefer a unique personalized car journey, including the capability to complete some of those key steps online. I think those are two of the biggest variables that come into play.
Jim Fitzpatrick: What are the biggest mistakes that you see from your perspective that dealers make when getting started in digital retailing?
Mo Zahabi: I think the first one would be waiting to get started. We see a lot of dealers that have a tendency to do that. They wait to see, they’re a little bit more reactive than proactive. Second, thinking that purchasing software alone is going to give them results. Being successful with a new approach means truly adopting and enforcing the culture change it brings about. If dealers don’t install a process that aligns with the new experience, then it’s going to be really difficult to have success.
Mo Zahabi: Finally, if dealerships can’t deliver on the experience that they’ve promised or implied by the digital retail experience, for example, if the customer shows up and they have to start all over from scratch, that’s going to be a disaster. They really need to have a way to connect the dots between what happened online and what’s going to take place inside the store.
Jim Fitzpatrick: Getting back to your first mistake that you feel dealers make in terms of getting started, is this something that by and large they should have already started down this road by now?
Mo Zahabi: My opinion is yes. I think that some are a little bit fearful of that because they don’t understand how to implement a process or go about rolling out an initiative like this, so they’re a little bit standoffish. They’re almost waiting for somebody else to come up with a playbook, and to me that’s kind of a recipe for disaster and you’re going to be that much further behind. I think that if you wait, another dealership is going to start taking business from you, one that offers the experience that you should be offering.
Jim Fitzpatrick: From what you’ve found out there, have you found that OEMs are helping to push the digital retailing to dealers or pushing dealers to get into digital retailing?
Mo Zahabi: Yeah, and I’ve experienced that firsthand. I was actually just out in Vegas with General Motors, with Hyundai, and that’s something that they are pushing on their dealers to go ahead and start this process, understanding that this is the next direction of our industry. This is what consumers want, so they’re trying to get more and more dealers to embrace that and so are we.
Jim Fitzpatrick: How can dealers eliminate what consumers consider a waste of time at the dealership? This continues to still be at the top of the complaints that consumers have about dealerships. It just takes too damn long to buy a car. Why?
Mo Zahabi: I think the biggest problem… We just talked about it or I just talked about it a second ago, is not understanding what already took place with the customer. Not being able to connect the dots and personalize that experience. Research shows that 76% of consumers expect the dealer to know something about them before they visit the dealership onsite. I’m one of those people.
Jim Fitzpatrick: Me, too [crosstalk 00:04:35]-
Mo Zahabi: The more you know about me the better experience I’m going to have. That’s why I go to a lot of the same restaurants because they know what I like to eat. They know how I like things prepared. The same thing goes in the dealerships that I prefer to visit because they know personally I work in automotive, that I’m not going to buy gap and all these other things.
Mo Zahabi: It’s a better experience for me, so I think the same thing would go for the average consumer. The more we know the better off we are, and the better we can connect the dots between online and in-store instead of everything getting blurred once the customer crosses the threshold, the better off and more profitable the dealers will be.
Jim Fitzpatrick: There’s nothing more frustrating than to go into a business where you’re already on file there, you’ve already filled out maybe their online application or the profile or what have you, and the staff member says, “Okay, we need to get some information on you”, and it’s all the same information that you took 15 or 20 minutes filling out online. They’ll tell you, “Oh, that was online. It’s a different system. I need to get it now.” It’s just a complete turn, right?
Mo Zahabi: Right, and again, central research showed, and I was just reading this the other day, that two out of three customers are more likely to shop with a retailer whether it’s in-store or online if they understand their previous purchase history. The other side of this, though, would be that in order to eliminate a lot of that time utilizing integrated solutions that pass information, that eliminate double entry, and the same thing as far as mistakes that occur because of double entry.
Mo Zahabi: When we go to follow up in the future, it makes that experience that much better. We’re not trying to fumble through multiple records or multiple systems to get to where we need to be, which is complete the deal and get the customer out the door, busting bugs on their windshield.
Jim Fitzpatrick: What training is necessary for staff once a digital retailing solution is in place?
Mo Zahabi: I’m a huge advocate for training, so I don’t think you can ever have enough. It’s something that even here at my companies, we’re constantly training our staff on different technologies. I think that in order to be successful you have to approach this and deliver a clear message to the sales staff on what the new approach is and what’s necessary to accomplish that.
Mo Zahabi: You have to be transparent that change is coming, and then management has to build expectations and a process that details not only how to respond but the fact that time is imperative. That again goes back to training, what do you need to know before you respond to a customer? What do you need to understand about the customer when they show up in order to go ahead and be cognizant of that time.
Jim Fitzpatrick: The training is such a big part of this, isn’t it? It can’t be a one-and-done training. It can’t be a half-hour class or even a half a day class. “Okay, we’re now in digital retailing.” It doesn’t work that way, does it?
Mo Zahabi: No. It’s just like when we first adopted the internet and the new roles in the dealership. We’re going to need to create some new roles as far as digital retail goes, and I think a digital retail concierge is a big step in the right direction. They can serve as a liaison, they collect information ahead of time, and then they help align to get the outcome that they want.
Mo Zahabi: I think a big part of that is choosing the right vendor in place, one that really understands the market, understands how this all works and helps the dealer develop a playbook to go about and accomplish this, whether it’s the ongoing training or just helping them build the process and put that in place.
Jim Fitzpatrick: What advice would you have for dealers on how best to promote their online or their digital retailing experience?
Mo Zahabi: Well, I think this is almost the same as the dealership. You almost have to train the guesswork. They don’t know what to expect [crosstalk 00:08:07]-
Jim Fitzpatrick: That’s a good point [crosstalk 00:08:08]-
Mo Zahabi: Message them. How was your last digital retail experience? You might not have one and that’s something that we need to go out to the customers and explain that, the fact that we do have a new approach and what that new approach entails. Then, promoting it differently and making sure that we expose the DR experience on the website and making sure that we’re branding it a little bit differently.
Mo Zahabi: Don’t let it be a secret to the customer that it’s available to them because, let’s be honest, we’re all out there, we’re all shopping, but I want to be able to save time. For me, time, it’s a commodity we can’t replace. I could prove to the customer and I can educate the customer that this service saves them time and energy and effort with a dealership. It’s going to be that much more likely that they actually adopt it.
Jim Fitzpatrick: Digital retailing is here to stay. For dealers that are listening right now that are shaking their heads saying, “Hey, I sold 200 cars a month last month and we’re knocking the cover off the ball and I didn’t sell any online. We didn’t sign paperwork. I didn’t deliver any vehicle to anybody’s home.” Share with us what you tell that dealer today.
Mo Zahabi: Well, I’ll tell that dealer I was also very successful 12 years ago before I got into software doing a lot of those same things. Now, we didn’t have the technology where you could go ahead and put all this information online and have visibility to it, but there are dealers out there that are being very successful right now using digital retail platforms. The more customers get used to it, the more they adopt it, the bigger disadvantage the traditional dealer today is going to have moving forward. For those who adopt it, they’re just going to have a leg up. It’s going to be that much harder to catch up to those dealers, so it’s like them getting a a hundred-yard start in the 200-yard dash.
Jim Fitzpatrick: Mo Zahabi, Senior Director of Product Consulting at Cox Automotive, thank you so much for your time today on CBT News. You’ve very much appreciated. This is a topic that we want to be able to visit with you again on because it’s a hot topic in the industry and dealers need to learn more about it and have their questions answered. Thanks so much.
Mo Zahabi: Absolutely, Jim. Thank you for having me. I really appreciate it.
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