Dealerships Must Deal With Change

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Several factors are changing the reality of auto sales. Photo AdobeStock

In a webinar hosted by Driving Sales on July 21, the floor was given to automotive sales veteran John McAdams, who offered his advice for dealers to embrace change.

McAdams is Vice President of the firm, which provides strategic reputation management and social media marketing support to U.S. dealerships. Professionally involved in the automotive sales industry since the 1980s, he was invited to this forum to talk about the past and present, but more importantly, how dealerships must position themselves to meet the challenges of the future.

“I was there at the beginning of the digital revolution, when the first computers were introduced into our companies,” recalls the expert. “At first, they were mainly used to support administrative operations. The rise of the Internet has transformed this tool into the hub of the customer experience. The arrival of websites and social media made some people fear the disappearance of street-level businesses, which turned out to be an unfounded fear.”

Embrace change

He says this is a good example of how dealers have adapted to the new market realities. “We can’t be resistant to change, and in this sense, we must carefully monitor our customers’ consumer habits. We know that 95% of shopping before contacting a dealer is done online,” he says. “Why are some people still reluctant to respond to this reality by facilitating the visitor’s journey? Today, we are in a scarcity market where cars, both new and used, are sold at a good price and without effort. The consumer can go anywhere they want, it’s up to you to make sure your presence on social media, on the web, but also in your community is going to set you apart.”

During this discussion, McAdams also provided an update on the scarcity situation when consumers have to wait weeks or sometimes even months for their cars to be delivered. “It was the same phenomenon as in the 1950s when the dealer had three cars on display with no inventory. The consumer would order the car of his choice and wait for the good news that it would be delivered. Later on, manufacturers and dealers changed the approach by having dozens or even hundreds of vehicles in stock ready to go. Today we are back where we started and that is not a bad thing. It’s the dealer’s job to explain the added value to consumers of waiting to get exactly the vehicle they want.”

Online sales

Obviously, consumer habits go, in a small proportion still, as far as to sell directly on the Internet, without discussion with the dealer and test drive. “The initiatives of some manufacturers to sell certain vehicles directly to consumers raise my eyebrows,” says the expert. “The manufacturer must not start seeing its franchisees only as delivery addresses or service points. The strength of sales is also the quality of the relationship built with customers over the years. It certainly sends a clear message that the dealership must make shopping and buying a vehicle as simple and seamless as possible.”

He illustrates this concept by discussing the trade-in car, whose valuation in a new vehicle transaction can be a major irritant for the customer. The latter, well informed on the internet, already has a good idea of the value of his vehicle. Asking them to come in, pass the inspection and finally offer them $5,000 under the actual value is a process that the customer may hate. The expert recommends making an approximate evaluation of the vehicle before the visit, even if it means adjusting it downwards if the inspection reveals damage that is not mentioned. Moreover, self-assessment modules are now available to accompany the consumer in this process; modules that can be added to the dealer’s website. An interesting way to collect used cars that are in high demand right now.

Buying without trying

Speaking of online sales, McAdams finds it hard to understand why anyone would buy a car without taking it for a test drive. “It’s still a small percentage of consumers. Here (in the U.S.) you can have a new car delivered to your door, it’s so easy. But after you drive it and realize that car is too small, too big or whatever, the customer will have a bad experience for the next three or five years.”

Let’s disclose here an interesting element mentioned by the expert during this virtual conference. Sales prices for both new and used vehicles are very high right now for the reasons we know. However, with the resumption of deliveries, economic uncertainty and rising interest rates, it is expected that the resale value of these vehicles in the medium term may fall. The devaluation of a high-priced trade-in vehicle is likely to cause many consumers to cringe when they want to switch cars quickly.

In conclusion, the future in the eyes of this specialist prepares several turbulences for the dealers. To deal with it, he recommends two avenues. Offer a connected platform with a streamlined process that will inspire confidence and drive customers to your door. And stand out from the crowd by selling its image. “To the consumer, all cars look the same,” he says. “Sell your personality. Pay attention to the needs and approaches of consumers. A lot of a dealership’s value is based on the quality of its relationships with its customers and virtual visitors.”



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