Dealerships today face a constant struggle to sell in a digital marketplace that continues to grow. The vast majority of consumers research vehicles online before ever stepping foot inside a dealership. The average consumer conducts 14 hours of online research before they end up purchasing a used car (2016 Auto Trader Study). Is it possible they’re more informed than your salesperson who has 100 cars on the lot? You bet they are, especially since salesperson turnover rate for the automotive industry is a whopping 67 percent.
What does this mean for your sales? It means the second your team says something that doesn’t jive with what the customer “knows,” trust is out the window. That’s when you’re forced to drop price to save the sale. With customers becoming more and more knowledgeable, it is time to reevaluate and adapt your sales processes to make sure you win over today’s very knowledgeable consumer.
MAXDigital SVP of Strategy and Innovation, Patrick McMullen, will outline some very clear ways that you and your sales teams can level the playing field, focusing on three key areas:
It’s time to stop relying on price dropping just to make the sale. To hear more from Patrick about how to “Stop the Drop” and turn your team into product experts and increase profits, attend his Digital Dealer presentation:
Monday, September 18, 2017
1:30 – 2:20 p.m.
Digital Dealer 2017 is upon us, and there are just a few days left to take advantage of the advanced registration rate. A meeting of many of the most influential thought leaders in the auto industry, Digital Dealer is a great place to find new strategies on growing your dealership.
The 23rd annual conference, 2017’s Digital Dealer conference is being held at the Paris Hotel and Casino in Las Vegas, Nevada, from September 18-20. With 90 of the 100 top US dealership groups attending, Digital Dealer is a can’t-miss opportunity.
Digital Dealer also features an open exhibition hall of companies offering demos of all of the latest and most innovative tech advances for auto dealers, like MAX Digital’s platform.
Guests can take part in over 100 educational sessions and panels, offering new ideas on how dealerships can thrive in the 21st century. This includes:
One of these education sessions is being led by MAX Digital’s Senior VP of Strategy and Innovation, Patrick McMullen. McMullen will be teaching dealerships how to turn their sales team into experts, and how doing so can build trust in customers and increase your sales.
You can also talk to us in person when you visit the MAX Digital at booth #713. There you will be able to experience our software platform first hand with a free demo. MAX Digital lets you enhance your online content to better merchandise your inventory.
Your sales team wants current, accurate information about your inventory. Your customers, armed with mobile devices on your showroom floor and hours of research, want a transparent, consistent, and simple buying process.
What is a dealership to do?
MAX Digital Showroom empowers your sales team and satisfies today’s digital consumer by streamlining the sales process from both sides. By leveraging a wealth of data generated from the MAX Content Generation Engine and presenting it in an accessible way, your dealership will establish a common ground and build trust between the sales team and today’s tech-savvy consumer.
Americans rank the traditional car buying process about equal to a dental appointment. Dealers have a tainted reputation with stereotypes abounding of the haggling “used car salesman.”
The traditional vehicle buying process is based on customers visiting a dealership. Thus begins a spirited tango purchasing dance with the salesperson, perhaps a dealership manager, the finance department, and some other players in between in an all-day exhausting event.
Vehicle history reporting is a topic usually approached from a customer’s standpoint. It makes sense when you think about a responsible car buyer, especially now that people are doing so much research online. When a consumer narrows down their choice to a couple of used cars, their decision might come down to the vehicle history.
There are a number of reasons for car dealers to care about what’s in a vehicle history report (VHR), too. In addition to considering the needs of your customer, taking full advantage of VHR can make a difference in your business and used car sales. Let’s take a moment to consider what vehicle history reporting is and why it’s so important for dealers to pay attention to it.
Every car on your lot has a Vehicle Identification Number, or VIN. A car’s VIN is like a fingerprint. It’s how we can tell two white 2009 Honda Civics apart from one another, or how you can differentiate three grey 2005 Mazda3 cars. Variety in the car market can be more limited than some brands let on, but thanks to the VIN system, we know that no two cars are truly alike.
What actually separates one car from another is its experiences. One car might be serviced twice as often as another. Another car might have three times as many miles on it even if it’s the same model year as two other cars. Some cars may have even been in an accident or considered a total loss at one point.
VINs allow us to track all of these cars across the thousands of miles they go in their lifespan, and they have enabled the creation of detailed Vehicle History Reporting. Every service visit, every instance of warranty work, every accident is tied to the VIN of each car on the road today, and any of those cars could end up at your dealership. They might appear as a trade-in, or they could be something you acquire via dealer trading or at auction.
You’ll want to check the vehicle history for every car that comes onto your lot and for every car you’re planning to sell. Doing so allows dealers to make the best trades, and when combined with industry standard pricing and appraisal tools, it can improve your profit margins by setting prices that make the most sense for a given car.
Still, you can go a step further with vehicle history reporting. The true benefits of VHR come not just from consulting it yourself, but giving your customers free access to this valuable information, too.
Vehicle history reports have all the details a customer wants to know when they’re shopping for a particular used car. They include:
This is the kind of information that can be a huge benefit to your used car merchandising. Customers shopping for a used car want to know just how used it is. If you can provide detailed vehicle history reporting for free on your website, that’s one more reason for a shopper to stay on your website browsing your inventory. When you’re plugged into the largest network of prospective car buyers in the country, it will also let you advertise directly to customers.
We often discuss the importance of transparency, and vehicle history reporting is yet another way you can give your customers transparent information.
One shopper might wonder why you’re asking for a certain price on the used car they’re looking at. You can point them to the car’s history to demonstrate how well taken care of it is.
Another customer might have concerns that you’re selling them a lemon. Direct them to the vehicle history report that you provided for them so they can see the car has a clean bill of health.
Giving consumers access to online vehicle history reporting for free sends the signal that you care. It’s another service that will not only improve your standing with your community but can have a positive impact on your bottom line. Give yourself an edge by looking out for your customers.
Both of the major VHR databases, AutoCheck and CARFAX, allow dealerships to partner with them to provide these services. If you haven’t already looked into it or you’re not sure how to proceed, don’t hesitate to ask someone you trust how to proceed.
Cars in the lot? Check. Catchy local advertising? Check. Vehicle pricing in place? Check.
Now, time to sit back and watch the customers roll in.
Not so fast.
Do you have the right cars on the lot? And are they the right price?
Gone are days when you can put a clever ad on local TV or radio and wait for people to wander into the dealership. When you think you have all systems in place, you should consider making absolutely sure you have an effective, modernized vehicle pricing strategy.
In order to get a vehicle pricing strategy in place, assess your current one. Ask yourself the following questions:
After you have completed your assessment of your current inventory management strategies, it’s time to do some work. If you’ve always done things the same way, it might require you to think outside the box and be open to dive into strategies that are completely new to you or those you hadn’t thought about before.
If you have been basing a vehicle pricing strategy more on what feels right rather than numbers, examining key data factors is a more effective approach.
A well-researched, competitive price goes much further than just offering the lowest price. Does your vehicle have an original package that your competitor’s does not? If so, that original package’s MSRP should be reflected in the vehicle’s price.
It’s important to take into consideration that every vehicle priced in the market may not have the same value propositions that your vehicle does. Doing your research and leveraging data to compare apples to apples allows you to defend your margins while still staying competitive in the marketplace.
According to a study by J.D. Power and Associates, consumers are not as concerned with getting a great deal as the auto industry may believe. In fact, the study shows that consumers would rather find value in a vehicle than get the lowest price.
But what’s the point of pricing a car competitively based on its value if your consumer can’t see the value in it? Today’s consumers spend an average of nearly 14 hours online researching vehicles, according to the J.D. Power 2014 New Autoshopper Study, so it is imperative that you provide the consumer the same data you had when you priced it.
Utilize your dealership VDP pages by providing the consumer relevant vehicle descriptions that include OEM packages, their original MSRP, and pricing proof points that reflect books and market averages. If you stay ahead of today’s tech-savvy shopper and offer your potential customers transparency in the way you’ve priced your vehicle, you’ll give them a seamless, pleasant shopping experience that builds value in your inventory.
Studies like the Consumer Reports’ annual Car Brand Perception Study give insight into American’s perception on used cars and how likely they are to seek them out to purchase them. According to the study, two-thirds (65 percent) of respondents said that they are more likely to consider a late-model used car relative to several years ago, and 71 percent reported being likely to consider a late-model used car as an alternative to a new car.
If you were to just assume everyone is looking for a new car first, you’d be missing out on the people who go for used cars first. In fact, in 2013, certified pre-owned (CPO) models helped drive a dealer’s used vehicle profit margins to $2,361, which was nearly double what the margins were for new vehicles sold in 2012.
When you understand both consumer trends and the importance of robust used car inventory, you’re on your way to a vehicle pricing strategy. The best way to have access to advanced analytics, cutting edge best practices, and decision making tools is with a fully integrated inventory solution.
At MAXDigital, we empower dealers with software designed to maximize opportunities for generating faster turn and higher gross profits simultaneously. Formerly known as FirstLook, MAXDigital’s Inventory Management Platform is designed to help you stock, appraise, and price the right vehicles for your area.
Let’s talk about several ways you can modernize your sales process to prepare for today’s digital consumers.
Any updates to your sales process will begin with the people who carry it out. It’s likely that you already tout your sales staff as one of your strongest assets. You tell customers that you have the most professional, the most knowledgeable, and the most personable sales team they will encounter. Your goal now is to make sure that’s the case.
There are two routes you can take when training your sales associates to handle today’s car buyers.
You might have one person greet people as they walk in the door, one person acting as a product and tech specialist, and another person who accompanies customers on test drives. Then you might have a person who handles all of the financing and paperwork, and finally someone who deals with delivery.
This approach could be attractive for dealerships with a large staff, and it’s important to remember that different people have different strengths. Your employees might appreciate the chance to focus on what they excel at while leaving other tasks to peers who are better suited.
These are people who can do it all, walking the customer through every step of your sales process. They not only know the cars you sell, but they know technology and how best to interact with a modern car shopper.
The super sales person approach likely entails a more intense training regimen and even a more intense hiring process. It will work best for smaller dealerships and premium brands with a smaller selection of vehicles.
If you’re having trouble deciding between these approaches, this article from Automotive News carries both sides of the debate, with ideas from thought leaders Grant Cardone and Joe Verde.
Regardless of what your sales team looks like, your ultimate end goal should be customer satisfaction. Make sure everyone involved in your sales process cares about the customer. Their happiness is your success.
We’ve mentioned customer satisfaction once already, and one of the best ways to satisfy the modern car shopper is to make the most of his or her time.
Remember: online research drives the decision process for 95% of new car buyers today. They’ve already narrowed down their choice of cars, which means they’ve cut out a chunk of your sales process template for you. Instead of launching into the whole spiel about the car, ask the customer what they don’t already know. This shows you respect both their time and their initiative. You can spend less time standing or sitting around and more time on a test drive.
That brings us to the next point: Focus on the parts of the sales process a customer is likely to enjoy and clean up the steps that normally bog people down. Today’s shoppers are more likely to open up and let you get to know them if they’re already sitting behind a wheel, getting a feel for the car they’re thinking about buying. They’ll be less inclined to talk to your staff if they’re waiting 20 minutes for you to find the right key fob.
It’s also important to simplify your F&I management. You can improve the overall flow of your sales process by giving the customer more tools to use online like a payment calculator and a chance to pre-qualify for a loan.
Ultimately, the more you value a customer’s time during the sales process, the more likely they are to value your customer service. That opens them up for chances to return to your dealership for service, maintenance, parts, and, of course, their next car.
This won’t be the first time we’ve talked about your customers’ needs for transparent pricing tools, but this notion is also critical to modernizing your sales process. When we talk about transparency of this kind, we mean your pricing information needs to be freely available. A customer should know why you’re asking that price for that car.
At this point, most dealers step in to say “But what about our gross profit margins?”
If that’s a concern, it might be time to consider whether or not you’re properly leveraging the data from your region and your market. The kinds of pricing and appraisal software that lets you consult that data is out there, and it’s up to you to implement it. It’s possible to set a price on new cars, used cars, and trade-ins that is the greatest benefit to you and your customers.
As the culmination of your sales process, this is one of the most important steps to get right. It’s tricky, and it might be the hardest part to adapt, but doing so will let you and your dealership reap major rewards.
Hopefully this outlines a path that you can take to start bringing your sales process into clear definition. If you have more questions about this topic, or if you would like to share some of your own experiences adapting your sales process to today’s car buyers, you know who to ask.
The car-buying process has evolved, but while many customers have changed the way they shop for cars, a lot of dealerships have yet to catch up. Many dealers still use outdated, outmoded inventory management techniques, and that can make or break your bottom line.
At MAXDigital, we provide cutting edge inventory management software to car dealers. Our definition of inventory management is making sure you have the right vehicle at the right time with the right price.
Keep reading to learn about three ways MAXDigital can solve your inventory management woes.
Today’s consumers are looking for a transparent, consistent, and simple car buying experience. The way you stock your inventory now might not allow for that.
Cars are unique in the retail space for the nearly limitless options available to customers. Countless models come in different colors, different body styles, different trims, and so on. How do you know which cars to have on your lot? You might stock the model a customer is interested in, but if a competing dealership across town has the same model with the color and engine option they want, you’re going to lose that sale.
Your existing inventory management system isn’t helping you fix that, but MAXDigital can. Our FirstLook platform analyzes data from your market to tell you exactly which cars are in demand at any given moment. We can also look at your own historical data to tell you what models you have proven success selling.
Our system will make your dealership more effective. If a customer submits a lead on one of your cars, you’ll be able to respond with absolute certainty about where it is and what condition it’s in.
FirstLook can also eliminate latency. You don’t want to be in a situation where you just got the exact car someone wants on a trade-in but it takes a week to put it in your system. Or worse, when a customer asks about a car that’s been sold but is still listed on your website. We make it easy to get cars into your system as soon as you acquire them, and we get them out of your system as soon as their sold.
When a customer is browsing your inventory, they expect to see the price of each car. If they ask about it, it should be obvious where that price comes from.
The value of data can’t be underestimated in the digital age of car-buying. Our FirstLook platform comes with powerful tools that help you appraise and price your inventory. FirstLook is your best friend when you’re trying to close a trade-in while maintaining a high gross profit. It’s also there when you want to decide how much to put into reconditioning the vehicle and when you’re setting a fair market value to offer the next owner.
Our inventory management system makes use of real-time market and wholesale data from a comprehensive and reliable data set so that you know exactly how much to charge for a given vehicle. We not only take into account local prices, but regional prices as well. It’s important to realize that a customer who will drive 25 miles for a good deal would drive 250 miles for a great deal. With FirstLook, you can find that sweet spot that makes the deal great for both of you.
It’s important that this data is real-time because it isn’t just about offering the right car at the right price. Timing is everything, too, and auto dealers have to be sensitive to how long a car is on their lot. You’ll know exactly when it’s better to wholesale a trade-in instead of leaving it in your inventory where it’s just taking up space.
Selling cars based on price alone isn’t enough anymore. You also have to demonstrate your inventory’s value to your customers, and you can’t do that if you settle for generic vehicle detail pages (VDPs).
“Is this car right for me?”
“Am I buying a lemon?”
“Why is this car better than the other one?”
“Is this a fair price?”
“Why should I buy from this dealer?”
These are the questions your consumers are asking, and it’s these questions that a VDP should answer. There’s no point telling people a car is blue if you put pictures of it on the page. Instead tell them what features and options packages come in the car. You should give as detailed a vehicle history report as you can manage. Make sure everything worth knowing about a vehicle is listed online because that’s where consumers are making their decisions, not in your showroom.
It’s because of this that upgrading your inventory management system is only the start of adapting to the digital age. You also have to change the way you market to consumers. We know how to help you there too.
Give your customer the information that provides the vehicle’s value at every stage of the sales process, including in the showroom, and highlight the reasons you bought that car. You priced it based on its value, now defend that price.
We encourage you to schedule a demo with us to see how our full suite of software works together for you. If you need to start somewhere, remember: right car, right time, right price.
In recent years, the amount of people participating in mobile commerce has increased as the number of people who use desktops or laptops to shop is in decline. The tipping point came in August 2014 when 51% of retail traffic stemmed from smartphones and tablets. Smartphones are also not going anywhere anytime soon, with a projected 2.08 billion people using smartphones daily in 2016.
With over a third of the world’s population slated to own a smartphone by 2017, what is your dealership doing to capture the attention of literally ⅓ of the world?
Understanding mobile commerce trends and shopping behavior can give your dealership an advantage over the competition down the street who is afraid of mobile users and does nothing to relate to customers already shopping online. Learn how to leverage mobile commercial trends to win consumers during the entire shopping process.
You may have an understanding of mobile commerce, but what is it exactly? When people use a mobile device, such as smartphones or tablets, to purchase goods or services through an online transaction over a wireless Internet connection, you have the definition of mobile commerce.
One trend that seems here to stay is that customers want to engage with your brand across social platforms. In fact, 82% of customers consult their smartphones inside your store when making purchase decisions (also called “showrooming”). And before they even step foot in your location, 90% of customers will read reviews online to influence their decision to make a visit, let alone a purchase.
If you are not monitoring your online reputation, responding to reviews on social media sites like Facebook, or even neglect to have any presence at all on social media, you are shutting out potential customers and sending a signal that you don’t care about them. Even if it is not true, it is crucial you interact with potential customers online.
Another trend is that customers are rarely separated from their mobile devices. A whopping 9 out of 10 customers interviewed in a study stated they kept their phones within reach of them 24/7. This means when a customer is thinking of buying a car, he or she will turn to a mobile device first for research rather than walking into a dealership to ask questions.
Customers shopping on mobile devices expect instant results. 60% of mobile users expect a site to load in 3 seconds or fewer, and 74% are willing to wait only 5 seconds for a site to load before leaving to search for another site. If your dealership is delivering a poor user experience, you will definitely lose customers.
By staying ahead of mobile commerce trends, you can provide a seamless vehicle purchasing experience while embracing mobile users, not fighting trends that are here to stay. What are some mobile commerce trends you have noticed and leveraged successfully in your dealership? We’d love to continue that conversation.
Expertise remains a keystone of the MAXDigital philosophy. And to maintain a level of commitment for giving our clients and partners the best insight and materials, we must work with leading minds in key areas of our business. That’s why we are proud to announce a new addition to our impressive roster …
Benjamin D. Freedman, an experienced automotive digital marketing professional, has joined our team in Chicago. He’ll take on the role of Senior Sales Solutions Engineer, working under the direction of our Senior Vice President of Marketing and Sales, Mr. Brad Kruse. We selected Benjamin for this role based on the results he created within organizations such as the Minneapolis-based Morrie’s Automotive Group, Seattle-based Car Pros Automotive Group, and PCG Consulting.
With nearly a decade of digital marketing and Internet sales / BDC management experience, Mr. Freedman understands today’s competitive automotive retail environment. He also recognizes the critical role data plays inside and outside of a dealership, so his methodology includes assimilating data and making it actionable to leverage it as a key resource for generating a favorable ROI.
When asked why he chose to join the MAXDigital team, Benjamin said, “MAXDigital is growing rapidly, and my ambitions align with their brand message and product set. With data and technology going hand-in-hand, the products offered by MAXDigital not only surpass those of the competition, but do so more efficiently and at much better value.”
As a Sr. Sales Engineer, Benjamin will develop strategies, as well as product and process implementation, to facilitate growth for both new and existing MAXDigital customers. His knowledge and passion for the retail automotive industry coupled with his in-dealership experience will quickly become an asset to our clients’ operations.
With all of that being said, we ask that you give a warm welcome to Benjamin Freedman.