Process change is never easy, but as a whole, auto dealers have done a terrific job at adapting to changing circumstances in the last two years. One aspect of the sales and F&I process that has changed dramatically is the increase in transparency. Modern consumers are doing more vehicle research online and demanding more information up front, before they decide to visit a dealership.
This trend is ultimately beneficial for both consumers and dealers. As dealers decide what their sales and F&I processes will look like in the “new normal,” I believe that transparency must be a priority. For those who are still hesitating about the need to be transparent, here are several benefits that might convince you this is the best way forward.
Better Customer Experience
Transparency benefits the consumer because they are getting the information they need to help them make the best decision. I always ask people, if you are going to make an important decision, do you want more information or less information? Of course, the answer is always “more information.”
In a recent survey of 1,000 U.S. consumers, Sprout Social found that 86% of Americans believe that transparency is more important than ever before, and that 73% of consumers are willing to pay more for products that guarantee total transparency.
The more information you give a customer, the more confident they will feel that they are making the right decision. The more confident they feel, the happier they will be with their purchase. As a dealership, you want happy customers, right? Happy customers are more likely to return for service, future purchases and refer their family and friends.
Build Customer Trust and Loyalty
Whenever you provide a customer with information, or even a counterpoint to research they have been doing, you begin to transfer the equity of trust from third-party sources to your own dealership. With that trust comes increased loyalty.
According to the Sprout Social survey, when brands are transparent and develop a history of transparency, nearly nine in 10 people are more likely to give them second chances after bad experiences and 85% are more likely to stick with them during crises. Those are pretty significant loyalty statistics!
Increase Competitive Advantage
If we want to be really honest with ourselves, we have to realize that the lack of transparency in this industry has been the number one deterrent for consumers wanting to buy vehicles.
Look at the business model of online retailers such as Carvana and Vroom. In the last several years, they have used transparency and the providing of information as a true advantage for them to get consumers to interact and buy vehicles from them. Why not flip the script? Dealers can easily win this game, simply by becoming fully transparent themselves.
When I ran a dealership, the biggest key performance indicators (KPIs) I looked at were the number of referrals and repeat customers. I thought this was important because the more referrals you have, the less you have to spend on marketing. And you only get a high percentage of referrals if you provide the customer with a positive experience. And it turned out that customers had the best experience when they received the information they were looking for, quickly. When I discovered this, I became an instant advocate for transparency, and have been ever since.
The more information you provide a customer, the more confident they feel about their purchase and the more trust they have in your dealership. Ultimately this translates into higher customer satisfaction, more referrals, more sales and higher profits. Imagine all these benefits and more, simply by embracing transparency. If you’re not 100% convinced transparency is the best process for your dealership, try it and see the results for yourself.
