We spoke to a lot of dealers at the National Automobile Dealers Association (NADA) Show this weekend in San Francisco. Many had come out to the show to meet with their manufacturers and evaluate different technology providers. As they say, if you want to learn you need to do a lot less talking and a lot more listening, so that’s what we did.
Here’s what we learned.
In all of these situations there was a point where someone sold the dealer/manager on software that would help them “sell more cars and make more money.”
Over Sold, But Under Utilized
In many cases the software company launched the dealer, but then didn’t support them well after the fact. In some cases they never met an employee from the vendor in person ever. What ended up happening, the software was under-utilized and the dealer ended up paying a premium to only use about 20 percent of the system. Something they could have paid a lot less for over that period of time. This happens with a lot of software, CRMs, Inventory Management, you name it.
The lesson: you need to make sure you know what you are paying for, that you are using all of it, and that you are getting a good return on your investment. If not, push the vendor to help, train, etc. or cancel and do business with someone that will properly support you.
Sold, Trained, Utilized, But Made Less Money
Several other dealers said they had a great experience from a training and support perspective. They learned how to use a system very well, implemented it as part of their process, followed all of the vendors advice to a T, but ended up only selling a few more cars than they did in the past, and overall making less money than they did before. This can be extremely frustrating, feeling like you made a good business decision, like you did everything right in your mind, but the results that you expected just aren’t there. The good news is this is usually an easy decision. If you’ve done everything you could do, used a tool properly and it just isn’t producing the results you need it to for the price, find a better option or a less expensive option.
Given New Advice But Not Tools To Help Execute
Another group of dealers we spoke to were newly confused and frustrated. They seemed to agree with MAX Digital’s founding philosophy to sell on value not just on price. They didn’t always, for a long time they felt consumers just cared about price, and they had to be a price leader if they wanted to sell cars. This group understood that margin compression would only continue if they kept trying to undercut the other dealers in their market on the same vehicles. However, they didn’t understand how to actually sell value vs price. These dealers were really fun to talk to because it was like looking at the business through a different lens when they saw our MAX Ad solution and how we could help them differentiate their vehicles through better merchandising. They understood how their vehicles would even rank better on third party sites and start showing up as “great deals” instead of only a “fair deal” (without being the low price leader). When these dealers saw our digital retailing showroom tool it all made sense. They could turn their salespeople into instant product experts with any vehicle on their lot and prove to the customer why their cars were indeed worth the asking price and no further negotiation or price drop is necessary.
It’s always interesting to see all of these different perspectives around the same topic. It reinforces the notion, what was right for me yesterday may not be right for me today and what seems right for me today may not be what’s right for me tomorrow.