“Old habits are hard to break” is an old adage that rings true in both personal and business environments. Another old adage is, “Hope is not a strategy.” Before I dive into online “desking,” I must first ask, “Are you even in the game?”
“Hoping” that disruptors like Carvana and Vroom will go away, not find enough inventory to continue to scale or won’t continue to compete with the traditional brick-and-mortar big box franchised auto dealerships was like saying 10 years ago, “Amazon will never threaten Macy’s.” Think again.
To paraphrase a quote by actor Michael Douglas in the movie Wall Street, “Money isn’t made or lost, it just moves.” And there’s a great deal of money “moving” in the car business at the moment — and it’s moving away from franchised dealers. I know, you’ll say it’s almost summer 2021 and I’m retailing every vehicle I get at or above list. I have to ask, “How long do you think the chip shortage will last?” “How long will it be before you have to return to a ‘normal’ environment where OEMs compete against each other, along with local car dealers?”
The bigger question is, “How much money are you willing to let ‘move’ to the disruptors before you realize an online, omnichannel digital retailing solution with a digital welcome mat on your website is something you need to embrace? The self-guided, self-directed, germ- and conflict-averse demographic isn’t growing, it’s exploding!
So, are you going to keep pretending it’s not real as these companies steal your customers and profits, or are you going to roll up your sleeves like you did when you got your first desk job and go to battle?
I had a dealer say to me four years ago, “That digital retail stuff sounds great, but I’m not interested in working the counter at McDonald’s taking orders.”
Here’s what I told him: “What if I told you that you could run your business digitally the exact same way that you do in the showroom with a green Sharpie and a 4 Square worksheet? What if I told you that you could digitally ‘desk’ a deal exactly as you do at the tower, only make more money on this demographic? What if I told you that you could control all of the impact drivers in the deal, including rate spread, discounts, trade valuations, accessory sales, customize your F&I menu and let the customer give you their credit card and actually sell a car online?
“What if you could have your BDC or desk managers co-browse with a customer in a real-time web and/or video meeting and close the deal just like you do in the showroom? What if you could provide a solution to allow them to buy it on your website in your showroom, giving your salespeople the opportunity to handle three to four customers at one time and allow them to take more ‘ups’?”
When savvy dealers realize the world is passing them by, but they can be an active participant in their own rescue and meet a whole new demographic of customers they never would have met and take their rightful business back from those disruptors, they almost invariably sign on.
Here’s the last point related to online desking and digital retailing: CarMax figured out almost 30 years if you let the customer desk their own deal, you make much more profit. As an auto person myself, this was one of the biggest and most difficult transitions to make. The more transparent you are, the more money you make. What a concept! We were all taught and raised in this business to “Get ’em in, steal the trade and pencil the deal,” but back to CarMax, that’s not the most profitable approach to take. (Don’t take my word for it, Google CarMax’s annual report, where you’ll find, over the last 25 years, that their gross profits are in some years 40% higher than the average dealership gross profit.)
In conclusion, the world isn’t changing, it has. Your only decision at this point is if you’re willing to break those old habits, be that active participant in your own rescue and jump into the digital retailing “pond,” where digitally desking a deal attracts new and more customers, sells more cars and, most importantly, increases your top- and bottom-line profitability.
