A Crystal Ball for Automotive Sales
By Mark Tewart
Everyone knows the automotive industry is changing. Exactly what kind of changes and the results of those changes, only time will tell. The changes caused by technology and a changing society are rapidly increasing in speed and will begin to hit the "critical mass" stage of change in the near future. Many in the automotive industry will endorse many of the changes and move quickly in trying to catch up. The reality is, it may be too late for many to make up the ground lost by not adopting the changes sooner. The intent of this article is to stimulate thinking about what changes may occur and what a dealer can do to be positioned for the rewards the changes can bring.
Let's take a look at conventional selling philosophies that most dealerships currently work with. Desking systems will begin to fade away as control-oriented, manipulative selling approaches will become unacceptable to the educated consumer and the educated salesperson. Dealerships will not be able to hire quality salespeople and teach them to misuse the "Higher Authority" principal of negotiating. Salespeople and customers will not allow the constant back and forth of negotiating. I have taught a hybrid desking system for years to help eliminate the back and forth and empower salespeople and would have loved to have gone even further with the process, but it was apparent that most dealerships were not ready for that drastic of a change. The marketplace will at some point in the future dictate those changes which will have had to have happened in your dealership or you will be at risk of not being able to catch up. Dealers must totally rethink their selling procedures and philosophies everyday and begin to make the changes slowly or risk having "meltdown" by trying to accomplish it all at once.
Negotiation will never cease to exist as long as human nature and emotions come into play. Technology has increased negotiating, not eliminated it. Look at e-bay and other auction and broker sites on the Web for evidence of this. However, adopting professional negotiating strategies can eliminate that feeling of being in a snake pit that many consumers feel when buying a vehicle. Many dealerships have adopted one price philosophies more as a gimmick than a real customer-oriented selling approach. Negotiation, done professionally, is not a dirty word. Whether you choose one price or some other form of empowerment, TLC - Think Like a Customer, must become the theme in developing your strategies.
F & I departments will be changed or eliminated in many dealerships. The traditional F&I process is antiquated and is currently manipulative and control-oriented. Nothing in a dealership's operations today leads to customer dissatisfaction more than our current F & I process. Some dealerships now and in the future will have turn-key salespeople to handle all the points of contact with the customer, from the sale to F&I to service appointments. Many dealerships will build large comfortable areas where computer based power-point presentations of products, terms etc., with menu selling will take place. Many dealerships will begin pre-marketing of financing, F&I products and aftermarket items before the customer ever shows up at the dealership. Unfortunately, the government will continue to play "Big Daddy" and legislate more consumer protection laws that force F & I processes to change and eliminate some of the free market principles of choice. The days of dealerships using 18% payments + $50 bumps from the desk are gone. The days of packing payments and not disclosing product and saying "sign here, press hard, 3 copies" are gone.
Recruiting and training quality people will become the top target areas for all successful dealerships. Overall, the automotive retailing industry is light years behind other business in putting emphasis on human resources. Recruiting a higher level candidate, stringent standards, interviewing processes, profiling, testing, background checks etc. will have to become the norm to succeed. Does your dealership have a written game plan for ongoing recruitment of people? Does your dealership have a set game plan for ongoing training of personnel? Who is in charge? What are their qualifications for training? The sad fact is the majority of dealerships still do not have a game plan for training their employees. Because of this, the factories have mandated more training for dealerships and unfortunately, most of the factory training for real world selling has been sub par. Dealers have to take part of the blame for the factories, increased involvement in retailing by not moving fast enough to rectify our problems in the industry. One positive thing to come out of the influence of factories and big box retailers has been the increase of the speed of change in our industry due to the fear of being eaten alive.
Increased and more effective use of computers, Internet marketing and selling are a given. Just having a Web site without putting effort and thought into it is worse than not having a presence at all. Most Web sites are designed by "techies" with great technical skill, but zero knowledge in sales, marketing or your business. Would you let an ad agency design ads for you without input into the content? Most Web users don't go on the Internet to buy, they start off for information. You can attack this by being a source of information for your customers. Payment calculators, pre- approved financing applications, latest rebates, articles, etc. Another drawing card is the power of free items. All people and especially Internet users are lovers of free things. Free oil changes, trip organizers, etc. Traditional straight ahead selling on the Internet is not effective. Your site must lure them, build their confidence and knowledge and lead them to making a choice to use you vs. someone else. The theory of WIIFM - "What's In It For Me" applies here. KISS - "Keep It Simple Stupid" also applies. The most effective, income generating Web sites I have found have been somewhat low-tech, simple and easy to navigate. I have seen several dealer sites that are slow to load because of too many graphics and fancy plug ins. You will impress people more with information than bells and whistles. Apply smart marketing copy to your site. Don't let a techie explain your business and the reason someone should do business with you.
Database marketing and more effective use of customer relationships will become necessary. There will come a day where dealerships will provide ancillary services and form affiliate programs with other business to provide many shopping solutions for customers other needs, such as insurance, real estate and possibly even dry cleaning or lawn maintenance. Dealers will swap their database of customers with other businesses to increase their database of customers. Computers and software provide easy solutions to continual follow up of customers. E-mail newsletters provide a virtually zero cost solution for staying in touch with your customers and marketing to them. Fax broadcasting to selected niches will provide a low cost marketing tool for dealers for service and sale updates. Mass, shot- gunned ads will become less popular and out-of-the-norm ideas for marketing will pop up everyday. Those willing to take risks will reap the rewards.
Many dealers will read this article and say, "We have already made or have begun to make the changes mentioned in this article." If so, congratulations, you are ahead of the pack. Some dealers will say to themselves that they have already made many of the changes, but would be surprised at what is really happening in their dealerships. Today, more than ever will require dealers to immerse themselves into their business and become hands-on in dealing with the changes needed.
Mark Tewart is the president of Tewart Enterprises Inc., a sales, management and customer service training and consulting organization conducting seminars and in-house training programs internationally. He has spent almost 16 years in the automotive field, with his experience ranging from sales, leasing F&I, general sales manager and general manager. From this experience, Tewart developed the ÒContrarian Selling and Management ConceptsÓ that he speaks and trains on today. mtewart@dealeronline.com
