Dealers should seek to provide “transformational” experiences

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Providing a great customer experience is now just table stakes

Customer experience is the buzzword of 2017 and from where I’m standing, it’s not going away.  At pretty much every auto industry conference I’ve attended this year, there is, at the very minimum, one guest speaker who takes the stage to impart their wisdom about what makes a great customer experience.

What does it look like? What does it feel like? To what lengths should one go to provide it?  What is enough? It doesn’t take an expert to realize that by now, designing a great customer experience is the key to making sure your business keeps up with the status quo.

However, most recently, I heard some use the phrase “transformational experience” to describe the next level of the customer journey. A great customer experience is just that — great. But a transformational one — that’s a different story. I mentioned Starbucks in my previous article — they pretty much own the market on the transformational coffee experience.

The idea behind this “transformational” experience is to design your business like you would be charging admission (but don’t). What features or themed experiences could you implement that your customers would pay to access? Does what you have now fit the bill? Or should you look to overhaul your current model to meet the needs of your customers?

Strategically, put yourself in your customer’s shoes and ask questions like “What type of experience would I want if I were sitting in my waiting room?” or “What could our dealership implement to create a transformational online experience for our customer?”

As I’ve mentioned before, vehicles are sold at dealerships all over the country. Therefore, if a customer doesn’t like the way you do business or is put off by the experience they have at your dealership (or lack thereof), it’s not such a huge inconvenience anymore for them to go elsewhere. Your challenge is to ensure that they don’t have any reason to look elsewhere.  That’s where the “transformational” experience comes in. And don’t forget, going elsewhere is really just a few clicks away.

According to a recent OpStart article, Canadian online shopping spend has increased threefold, from $6.6 billion in 2011 to $19.2 billion in 2016. Furthermore, they estimate that those expenditures will double again by the end of 2019
to $39 billion.

While this isn’t necessarily a statistic about the auto industry alone, it shines a huge spotlight on the shopping behaviours of Canadians as a whole. It’s really only a matter of time before this online shopping trend transitions into the auto industry. Oh wait…that’s already being done.

The thing is, those early adopters end up with a strong foothold, instrumental in driving an industry to shift its behaviour

Case in point. In 2013, GM USA rolled out their Shop Click Drive program. This online shopping tool was designed to meet the demands of the online vehicle shopper who preferred to handle the majority of their car shopping experience from the comfort of their own living room.

The most recent statistics illustrate that this online shopping trend isn’t going away and in fact, is only increasing in usage. According to the Dealerinfo.com website, GM’s Shop Click Drive program has resulted in a total of 272,000 leads on new and used vehicles, which converted to over 32,000 new vehicle sales. And those are the stats from January to August of this year alone.

In a recent Accenture survey, over three quarters of the 10,000 people surveyed said that “if given the opportunity, they would consider making their entire car-buying process online, including financing, price negotiating, back office paperwork, and home delivery.” They identified confusion, high-pressure and lengthy processes as the key reasons why they would consider the change.

Other surveys have found things like legacy distrust in both the people and the process, lack of transparency (hidden fees or costs) and the lack of consistency between OEM to dealer to be major factors in the continuous decline of the satisfied auto customer.

Many customers say they would rather review their paperwork in the privacy of their own home than be surrounded by salespeople and their “let me talk to my manager” tactics. They would prefer more transparency, less stress, more flexibility, and fewer complications.

The often quoted statistic is that customers spend, on average, three hours in the business office, working through negotiations and paperwork. Doesn’t that just seem to be too long? Who really has that kind of time? How does 15 to 30 minutes sound?

Folks, if customers are calling for significant changes in the way they buy their car and if the majority are telling you, point blank, that they aren’t satisfied or happy with the process, isn’t it about time that we, as an industry, give the customer what they deserve and are starting to demand?

To be fair and to give credit where credit is due, some Canadian dealers and OEMs are now venturing into providing a seamless online buying process for their customers. In November of last year, Performance Auto Group pioneered the first end-to-end online shopping experience for customers buying used vehicles.  And then again this past summer, Chambly Honda in Montreal and Koch Ford in Calgary did the same for those in the market for a new vehicle.

The question is, as a leader of your business, which side of change will you be on?

Another two dozen Canadian dealers are scheduled to follow suit. Performance, Chambly, Koch, and all the others, are who we refer to as the “early adopters,” brave individuals or organizations with strong forward-thinking leadership who venture into this unknown territory and experience the hurdles and missteps in the spirit of paving the way for others.

The thing is, those early adopters end up with a strong foothold, instrumental in driving an industry to shift its behaviour. Companies outside the autosphere like Uber, Amazon, AirBNB, Lyft, Alibaba (check these guys out) are doing this every day. 

These organizations continue to take the bumps and bruises to ensure that customers have a choice between a good customer experience and one that is transformational. You can now add Performance Koch and Chambly, and I’m sure a few others to that list.

Yet, our industry remains hesitant to change. And maybe rightfully so. On one hand, these changes in customer expectations and behaviours could have adverse effects on the current profit model of a dealership.

If the shift to online shopping becomes the norm (and it very well might), what will become of the dealership as we know it today? Will it mean fewer salespeople? Or instead will it mean a different type of salesperson; one who is properly trained on how to engage with their online customer and who understands the desired outcome from the customer’s point of view? What will that do to the structure of the business office as we know it today? Is that a risk or opportunity?

On the other hand, most of the survey results and statistics show that customers really do want a better vehicle buying experience and thus the potential risk to how a dealership runs its business isn’t a concern for the average customer.

Auto is not the only industry that lags behind the leaders. It’s not just dealerships, but all of us: OEMs, banks, captives, warranty and insurance companies; most seem to be resisting the change that is coming, whether they like it or not. The question is, as a leader of your business, which side of change will you be on?

With all that said, it’s not all doom and gloom. While there has been (and continues to be) a major shift to digital, there are customers who still prefer the tactile experience of the test drive and the “feel” of the car.

This makes it very clear that there are real customers on both sides. So while you need to investigate ways to bring your business into the 21st century through proper online tools and providing new online buying channels, you also need to cater to the traditional car buyer by creating a space and experience within your dealership that is “transformational.”

When, and only when, you are set up to create a hybrid experience, and do it well, is when, in my opinion, you’ll have leap-frogged your competition.

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Canadian auto dealer