Top tier performance in today's dealership is an increasingly complex and expensive business. Regardless of the size or nature of your operation, you have to accommodate a more complicated product and a more sophisticated consumer. Automotive designs continue to evolve, expanded by the use of computers and most recently equipped with cellular telephones and computerized navigation systems. Complex designs may require many more television, radio and magazine spots to firmly establish the features and benefits in the buyer's mind than ever before. Thus, traditional marketing costs rise.
The people who walk into your showroom are more sophisticated than past generations, too. They have more education and are exposed to more media than ever before, including all of the types listed above. They are also using the Internet as a consumer research tool in record numbers. Various studies indicate that almost a third of all current new car buyers research their purchases over the Internet with significant increases expected in the near future. Thus, reaching and persuading today's buying audience is more difficult, as well.
It is against this backdrop of complex design concepts, rising marketing costs and savvy buyers that you or someone in your dealership is charged with increasing sales. What about the Internet as an empowerment tool? Is this new electronic medium something to be feared or should it be heralded as a real help in the showroom of today (as well as the not-so-distant future)?
The Electronic Art of The Deal: Friend or Foe?
Many fear the traditional art of the deal, developed on the strength of long-term relationships with auto manufacturers, neighborhood lending institutions and consumers alike, is headed for obsolescence. As more and more websites are established and more and more people turn on their computers for answers, a dealer might wonder whether the "personal touch" is becoming a quaint, inefficient method of doing business.
Will the Internet take the dealer out of auto deals? Our prediction and the premise upon which our Internet-based service has been built: No. We don't think so, at least not in the next ten years. We see change coming, but dealers will soon recognize that the efficiencies of the Internet can be used for them as well as against them.
We are not alone in this view. Other leaders with whom we've chosen to align ourselves, such as the Warranty Division of international leader Wynn's Oil Company, and dealertools.com, have built their businesses on the same premise. Wynn's has become the market leader in the warranty business through servicing the automotive dealers for the past 28 years. Dealertools.com was formed to help dealers take advantage of the Internet by offering a variety of services, including sales, marketing, finance procurement and training.
The Internet can be an empowerment tool if used correctly. Benefits of the new electronic financial channels can go beyond the actual credit transaction.
Bottom-Line Benefits
What if you had at your fingertips all the information garnered from every credit application filled out at your dealership-not just those resulting in a sale, but pertinent information from each and every one at the click of a button? Dealers can experience the power of this instantaneous information as part of these kind of services. The primary design of an independent, electronic credit application forum is to allow automobile dealers to publish credit applications to all lenders simultaneously, and to allow lenders to evaluate, close and document financing transactions on a real-time basis. Yet experience has shown the resulting electronic database is an invaluable marketing tool, as well, one that requires no additional funds or "manpower" to develop and implement. Consider how the computerization of a seemingly simple function-i.e., filling out a credit application-can affect your marketing effort. Dealers can defer application data entry directly to their customers simply by placing a computer that is linked to their website on the showroom floor. This creates an easy-to-access, easy-to-use environment of instantaneous, paperless credit application submissions.
Intensified competition for customers and advertising dollars, as well as an increasingly complicated product and consumer, all add up to a larger and more expensive marketing mix. Yet the responsibility for effective sales promotions, whose purpose is to supplement and coordinate national advertising campaigns and personal selling, still lies within the dealership itself. The more computerized your operation, the more you can optimize customer follow-through and follow-up from the moment a person walks through your door.
David Sinclair, President and CEO of e-fin LLC, Electronic Financial Marketplace. If you have specific questions or require more information about this subject, please check the appropriate box on the reader response form on page 3. dsinclair@dealeronline.com