Trends and predictions that will transform your dealership

From showrooms and online processes, there are few areas, if any, that will escape transformation.

The evolution of the retail automotive industry is ongoing and ever-changing: COVID has sparked a revolution.

The following trends are here now and while some will fall by the wayside, others will be a permanent part of the auto retail landscape. Here is a look at what we can expect:

Sales Consultants

Older, heavy-handed “closers” will soon fade in this new environment. Manipulation of pricing and payments, the hiding of manufacturer incentives, and the reluctance to provide information (showroom or online) such as a trade-in value or even a “best price” will soon be history.

Technology and social media-averse sales consultants will be replaced (over time) by younger, tech-savvy sales consultants that can easily multi-task and adapt to change. They will place a greater emphasis on superior customer service and enjoyment, (whether in-dealership, online, or home/work visits) because they want to, not because they have to.

Dedicated internet sales consultants versus showroom sales consultants will also be a thing of the past. The internet sales consultant will become the mainstream sales consultant — this is the paradigm shift. In the last five to 10 years, we have built BDCs, internet sales departments, marketing departments, social media departments, portfolio management departments, and continued to splinter the dealership into bureaucratic, rivalling silos. With the emergence of online retailing, we may not need as many people and departments.

Sales teams will become smaller and more productive in both volume and gross profit per transaction. Instead of sales managers overseeing eight or 10 sales consultants, they will manage intimate teams of three or four. Sales managers will be highly involved in every single transaction, both showroom and online. These smaller sales teams are already pooling and dividing gross profit equally within their gross profit-based pay plans.

Some dealer groups will adopt a “one touch” approach. Sales consultants will meet the customer (in the showroom, online, home or work), sell the vehicle and also sell the financial service products and services (a throwback to the 1970s). In this scenario, the dealership will staff one financial service manager instead of two or three. Their primary function will be to manage the lender programs and approval process.

Some sales consultants will also communicate with their customers throughout the ownership experience (with an app) and gently prod their customers to complete regular maintenance, repairs, accessory purchases, and so on, at the dealership. They will be paid a commission (royalty) on every transaction their customer makes in either the variable or fixed departments.

Showroom and Online Sales Processes

Several years ago, Wye Management launched an innovative showroom sales process called Zooom! The process removed many of the inefficiencies of older, traditional sales approaches, reduced the number of sales steps, and created an environment whereby a customer could purchase a vehicle in half the time in a much more transparent, relaxed, and fun environment.

Dealerships will require more efficient sales processes, as customers will expect and demand a more fluid experience at the dealership. The showroom sales process will also be integrated with digital platforms such as Roadster, MotoCommerce, Tagrail, or Dealertrack’s Digital Retailing, thereby seamlessly fusing the online and showroom experiences.

Just as dealerships have created showroom sales processes, they will also develop online sales processes. Success with e-leads is not just as simple as sending a congenial reply. Effective online sales processes (that reply to e-leads) include personalized videos, e-mail attachments, video-conferencing, and contact from sales managers as well as structured follow-up.

Financial Services

Financial service managers will be utilizing the telephone, e-mail, text, video and video conferencing much more for the completion of credit applications and the selling of financial service products and services. This will reduce the lineups and stress associated with face-to-face turnovers, and allow both financial service managers and customers to schedule video conferences at times convenient and relaxed for both.

Financial Services products and services will be much more prominent on digital platforms such as Roadster and MotoCommerce, allowing customers to research and buy in advance. Showrooms will utilize point-of-sale display tools such as Storm Kiosks and VenueVision to upgrade and modernize access to information, allowing customers to learn about financial service products while circulating in the showroom or service department.

Some dealer groups will eliminate financial service managers in each dealership, opting for a team that services the entire dealer group in a central location or remotely from home offices. Most of their customer interactions will be by telephone, e-mail, text and video conferencing. These teams will specialize: those that sell products and services to customers and those that work with the lenders to manage programs and approvals.

Some dealer groups will adopt a “one touch” approach (as described above) where the sales consultants will meet the customer (in the showroom, online, home or work), sell the vehicle and also sell financial service products and services.

Non-prime/ Sub-prime

This person or department is going to emerge from the back offices and rise to become a more “legitimate,” appreciated, and needed part of the dealership.

Many new vehicle dealerships have traditionally stigmatized non-prime/sub-prime customers as unsophisticated and irresponsible. “We don’t really want those kind of customers.” The credit-challenged market is growing and will represent well over 30 per cent of the Canadian market (or more). Can you afford to market to only 70 per cent of your market?

Today’s credit-challenged customers hail from all socio-economic backgrounds. A fast-growing segment within this market will be educated, white collar workers. They will be seeking to buy new and pre-owned vehicles from new vehicle dealerships that advertise credit recovery options in a dignified manner and provide a consultative, professional purchase experience.

Pre-owned Vehicle Sales

Used vehicle profit margins have eroded due to the wide-spread availability of pricing information online and cut-throat price-to-market strategies that utilize online scraping tools. As a result, dealerships have adapted by offering very small discounts, if any. Franchised dealerships will take the next logical baby step and eliminate price negotiation altogether and adopt one price models. Many of Canada’s largest independent used vehicle dealers adopted one price models long ago.

Dealerships will also bolster consumer confidence by offering both vehicle exchange and vehicle return privileges that are welcoming, simple, and clear. Although manufacturers have offered vehicle exchanges through Certified Pre-Owned programs for years, most dealerships have not promoted them for fear of complicated exchanges.

Website

Developing a dealership’s online presence is, and will be, a top priority for most dealerships post COVID-19. However, most dealership websites and social media still have very little content and are poorly maintained. They may answer the who, what, where, when and why questions, but forget to answer the question of how.

Marketing/business development managers who oversee the dealership’s website, manage social media, create branding and awareness, and generate leads will be one of the new, emerging positions that will be added to the dealership leadership team as a full-time position. However, they will not be solely responsible for the creation of all content; that will be the responsibility of today’s new sales consultants — all team members within the dealership.

Let’s also not underestimate how much customers enjoy the social interaction, feeling of importance, state-of-the-art dealerships, and numerous in-dealership conveniences and services offered by traditional dealership sales processes. That will not disappear. It will simply be enhanced, whereby customers will have more options as to how they interact and purchase vehicles from your dealership.

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