OK, you just signed up for a digital retail solution, and now you are waiting for the magic to happen — not so fast. Many dealerships launch a digital-retailing solution and then realize it takes more than just signing an agreement with a vendor. Dealers who are serious about boosting sales to customers who want an Amazon-like transaction need to do their homework. If they don’t, they may introduce a tool that fails to yield results.
No doubt COVID has accelerated dealer adoption of the digital check-out option. Additionally, research across the industry shows that a new demographic of consumers is looking for a more digital and transparent car-shopping experience. Dealers who recognize and respond to this trend will see tremendous success. But it won’t come without some adjustments.
To ensure success as you integrate a digital-retailing solution (DRS) into your dealership, first consider these key factors. I’ll share more in next month’s issue.
1. Ask yourself (and answer truthfully), “Is our management team really ready to embrace a digital-retailing solution?”
A business-as-usual approach will not result in a successful transition, wasting time and money. Integrating a DRS requires changes to a dealership’s processes and will impact practices for your business development center, managers, sales representatives and even your receptionists.
Get behind your sales team and assure it that the DRS is going to streamline the sales process and improve customer satisfaction. Discuss DRS results in every sales meeting and celebrate the wins. Set expectations low in the beginning. Like everything else, it takes time to see great results that come from new ideas. Integrate your digital-retail metrics into your overall analytics. Put a spotlight on your digital-sales progress. Have your sales manager report on digital leads, sales, trade-ins and average gross.
Also, make sure to share the online feedback with your team, emphasizing the positive comments to reinforce a winning strategy.
2. Do your homework. Make sure to find and select a “best-in-class” DRS. Not all digital retail solutions are created equal.
Look for a DRS partner that is experienced in onboarding dealerships and takes the lead to ensure a smooth transition. If implementation details from a prospective vendor are vague or not forthcoming, stop and go no further. Seek another vendor with a proven track record that can answer all transition questions.
In interviewing potential DRS partners, ask these questions:
• What dealerships have they launched, and what goes into the integration process?
• What are the best practices they follow?
• Do they have comprehensive analytics that include actual close rates?
• What procedures may change, and what role will the DRS representatives play in training and servicing the technology?
• Does the DRS allow consumers to actually buy the vehicles they choose online? This is a core capability that most DRSs do not include.
• Can consumers systematically have their credit processed and then routed to particular lenders as determined by the dealer?
• Does the solution deliver real-time, actual lender payment responses within 30 seconds to the consumer?
• How accurate are the tax and fee calculations? Many solutions do not include precise tax-and-fee figures as part of the online solution because of the complexities involved.
• Are accurate payment options for lease or retail available?
• Does the DRS provide a real-time hard offer on trade-ins and allow for total customization of how trades are appraised?
• Does it provide real-time credit decisioning?
• Is there total flexibility on applying accessories and customizing for F&I products?
• Does the solution anticipate the process that a consumer would expect?
• Is the DRS owned by a software provider or by a dealer group? Given the many little but significant details in purchasing a vehicle, it’s so important to consider a solution that is primarily driven by dealer input and then designed by very smart technical resources.
Dealerships across the nation have integrated digital retailing into their online and showroom sales strategies. Find a program in which the buyer chooses a car from a dealer’s website, sets a price, locks in trade-in value, gets financing approved and takes delivery of the car.
Following these guidelines will hopefully prepare you for a profitable digital-retailing experience. Next month, we’ll discuss training and marketing.