Six Takeaways from the Digital Dealer Conference & Expo

It’s no secret; the auto business is in the throes of great change. However, change is not the enemy. In fact, everything old is new again. Dealers who understand that it’s all about the customer experience (CX)—treating people how they want to be treated—have always thrived. Customers have always wanted a frictionless, personalized buying experience. Using data to discover those wants and needs should not scare us. A friend once told me, “The higher tech we get, the higher touch we need to be.”

What I Learned at Digital Dealer 23

1. In the absence of anything else, it will always be about price.

Absent price, why should a customer buy from you? It’s easy to have a location, great people, and an award-winning something, but does that separate you from everyone else? Give the customer reasons to buy your brand and from you, make the CX exceptional, and not only will they buy from you, they may pay more.

People are becoming more accustomed to communicating with a device to order groceries, clothing, furniture, and electronics and have them delivered to their front door. Why wouldn’t they want a similar experience when buying a car? While price is important to them, studies show that 54% will pay more for the right experience. I believe the other 46% have given up or don’t think there is anything better.

With few exceptions in the car business, we still expect people to adapt to our process. Ever have someone tell you about a bad car buying experience? Ever catch yourself trying to defend the broken process? Yeah, me too.

Brian Benstock, GM and VP of Paragon Honda and Acura, says the franchise system, which has protected dealers for more than a century, is under attack. Tesla and Carvana are not only changing the way people buy cars, but their model is placing the very system in jeopardy. I make no predictions about legislation, but I will say, you can get ahead of the curve and create long-lasting customer loyalty by applying technology, creativity, and transparency.

At Benstock’s dealership, they offer to bring the test drive to the customer, not hound them into a showroom appointment before they’re ready. Customers can also have their car picked up for service in the evening and returned by morning. But is that groundbreaking? The best salespeople always knew that by taking a car to a customer you increased your odds of closing the sale. CX is more important than ever. Maybe it’s time to mix the old with the new—high tech and high touch.

2. Your showroom isn’t where you think it is.

Most dealers have spent millions on their physical showroom and paid scant attention to what the online experience looked like. Brian Finklemayer of V-Auto says that dealers still only spend 33% of their ad budget on digital, while customers are spending 75% of their time on digital. Millennials spend 16% more time in the market than Boomers, an average of 127 days. In that time they average 17.5 hours of research—64% of it online.

Buyers visit, on average, ten dealerships virtually, while visiting only 1.6 physically. While most would prefer not to visit at all, 60% say they would if the process was better. While consideration sets are broader, 77% of people buy the car they originally intended to buy. The battles are being won and lost online. Only 22% of those emails are ever opened. If you are more focused on how fast you respond, rather than how well yours might be in the 88% group. On the other hand, open rates on Facebook messenger are 80%, and text is even higher.

3. It’s all about the data.

And you already have or can access a lot of that data, however most dealers aren’t using it. Data can tell you what cars to stock and how to price them, which vehicles get the most web traffic and sell for the highest margin, why two cars that are the same make and model and equipped the same sell at vastly different rates.

It’s not only about vehicle data. While you are griping about your employees messing around on Facebook, did you ever stop and think that everyone else’s are too? In fact, 2/3 of us spend some time on Facebook every day. Re-targeting personalized messages on Facebook to people who have visited your website or sent inquiries allows you to personalize the message and meet your customers where they are. I have a friend who eats lunch every Friday at the same restaurant. I know this, because he checks in on Facebook and tells his followers. He is gold. You have customers just like him. What would you do differently, if you knew who they were?

If you don’t sell nationwide, why are you relying on customer profiles derived from national data. Let your customer relationship management system help you build customer personas. Use social media and Google analytics to help you understand who is looking at you and buying from you. Learn from these personas and tailor your message.

4. Selling is still selling.

It’s still about stories and conversations, but the difference is where those stories and conversations are happening. Data can help us identify who to have conversations with and where and when to have those. However, you still need trained individuals to engage the customer in the right conversation and in the correct manner. What we know as “common sense” offline often gets ignored online. The online conversation should mimic the offline. You wouldn’t go right to talking about price on the showroom floor. You would first build rapport.

The good news is we have all data needed to know when and where to have the conversation, but are we leaving the conversation up to salespeople who refuse to learn and use the technology available? Not being well-versed on the technology needed to sell in the auto business is like a carpenter who doesn’t know how to use a nail gun. We must get better at training, but those who refuse to learn, have no place in our business. Stop hiring that model, and replace the ones you have.

5. F&I shouldn’t mean friction and inflexibility.

Customers expect a frictionless experience. We cannot create an exceptional, personalized CX and then put them through an inflexible finance and insurance (F&I) experience. Customers report that the F&I process creates the most friction in the buying process, but dealership personnel and F&I professionals are resistant to change. They fear loss of income—or worse, loss of jobs—if F&I moves to a digital process. There has been talk about what happens to compliance. But frankly, I believe this is a non-starter. If Quicken Loans can handle a complete mortgage online, I think we can handle the compliance issues of F&I online, as well.

Regarding income, the naysayers may be right. Digital retailing is coming, and if we don’t prepare for or take advantage of it, income will be drastically impacted. While the time it takes to complete F&I is important, it’s not just about speeding up the process. It’s about “pre”suading and beginning the F&I process early in the shopping experience to allow customers the opportunity to understand the true costs and risks of ownership. Allow them to buy, or at least, complete the majority of the process online.

Our products have value, and if we use data, accurate customer personas, and solid digital processes to present a relevant value story, our customers will buy. Most likely, the F&I role will continue for some time, but it may gradually morph into a CX center where the digital buyer finishes the deal and begins the relationship/loyalty process.

6. One bite at a time.

The good news is that you don’t have to do everything at once. While there are many vendors and lots of information; it’s best to start small. Begin with an underperforming model or vehicle segment—perhaps aged inventory. Gather the data, and target some specific buyer personas, then evaluate and refine. Take what you learned and move to the next segment. As fast as technology is changing, remember this is a marathon and not a sprint.


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