Incremental changes can bring a mini revolution
Have you heard that customers hate the car buying process?
I thought so. Fact is, lately it’s hard to avoid the constant sound of critical voices telling dealers they must make dramatic changes to the way they operate their business. It goes something like this: Change everything you’ve ever known about the car business, then implement a new and largely unproven approach to your business.
So go ahead and forget the decades of experience you have selling cars. No one asked you anyway! It all can be frustrating, and more than a little infuriating.
Trouble is, it’s largely true: we all know the process must change. Customers are unhappy with the time it takes; they’ve shifted their behavior and aren’t willing stick around and live through a tedious sales experience. Just look at a few recent findings from a Cox Automotive study:
- Less than 1% of consumers like the sales process as it is today, and most expect the entire experience to be plagued with hassles.
- In addition, over 66% of consumers say they would buy a vehicle more often if it just wasn’t so difficult.
So how does a dealer apply his experience to a new, technology-driven sales experience, one that reduces time – but more importantly reduces wasted time?
You start a revolution.
By revolution, I mean an incremental, “mini” evolution, looking at the sales and finance customer journey and workflow at your dealership. The first step is to identify moments of static in the process that can be improved, moments where the customer experience stalls and wait time is introduced. Then start tackling these things one issue at a time.
Here’s a good example: A leading California dealer, Huntington Beach Chrysler Dodge Jeep Ram, began by examining how to better integrate sales and financing, and how to start both processes at the same time, i.e., the minute the customer enters the showroom.
By breaking down their dealership’s meet and greet and test drive processes, they immediately locked into one of the first, information-rich touch points with their customers: the driver’s license scan or copy. By leveraging this information, HB Chrysler Dodge Jeep Ram was able to scan the driver’s license data and easily keep customer data in their CRM system up to date. That saved time and hassle for customer and employee.
But here’s the real benefit: when Managing Partner Pete Shaver realized that driver’s license information was the exact same data required by credit bureaus for finance pre-quals (soft pulls), he implemented a feature on the dealership’s ID scanner and mandated his sales team to ask customers if they wanted to opt-in for a credit app with no SSN required.
Over 50% of customers agreed to the one-click pre-qualification with the knowledge that there would be no inquiry on their credit report, and that it could cut the time spent doing paperwork at the dealership. It quickly became clear that pre-qualification prior to the test drive alleviated data fragmentation, disconnects and bottleneck headaches between Sales and Finance, while giving the salesperson and Finance manager new levels of transparency into the buyer.
That’s just one example of how a smart GM used his experience to examine the workflow and then apply incremental and disruptive thinking to the process of buying a car, with positive results:
- Customers who opted-in had, on average, a credit score of 704+.
- 54% of customers who opted-in for pre-qualification prior to the test drive went on to purchase.
- Closing ratios on these customers have increased by 150% (from 18-25% to 45%).
- Time spent on the deal was reduced by one hour.
Here’s the best metric of all: The dealership is making at least $300 more per vehicle sold, and CSI scores are 4 points higher on these deals.
From my point of view, it’s a fact that the automotive retail business is changing, driven by shifts in technology and customer expectations. But like anything in life, most often change comes incrementally, by finding needed areas of improvement, then applying proven experience with modern technology for a lasting and effective solution.
Pete brings over 40+ years of experience in automotive finance and technology as Founder and CEO of eLEND Solutions™. Founded in 2003 as DealerCentric®, Pete is leading the company’s evolution to an automotive FinTech platform focused on deal generation solutions that power transactional digital buying experiences for the retail automotive industry.
The platform specializes in hybrid digital credit, identity, and finance solutions - designed to accelerate conversions of digital end-to-end purchase experiences - concluding with a transactional, fundable deal structure.