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Creating a Culture of Accountability at your Dealership

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Accountability doesn’t just happen … it’s a learned behavior. It’s a culture that can be developed. Every week I work with dealers to help them transition from a traditional negotiation based sales model to an Upfront Pricing sales model. This entails leading meetings and workshops that take a deep dive into their standard operating processes and procedures. We discuss everything from pay plans to their road to the sale to help uncover areas for improvement. Inevitably during these conversations, one concern or frustration always comes up. “We’re going to need to hold them accountable for that if we are going to be successful.” No matter what the issue is, there is always a realization that they are not doing a good job of holding their employees accountable for day to day job responsibilities. This leads to continuous break downs in process often followed by a myriad of “band-aids” aimed at correcting the root of the problem.

So how can you create a Culture of Accountability in your dealership? There are four main areas you should look at first.

Job Descriptions

When was the last time you dusted off your dealerships job descriptions and took a look at what was written on them? When were they written? If I were a betting man (and I am), I would guess most of them were written five, ten or even twenty years ago. A lot has changed since then! Do you know that the number one complaint of employees is not related to pay? It is that many have no idea what their daily responsibilities are, much less what encompasses success. If you’re like most dealers, your Job Descriptions were written by someone in HR or perhaps a Sales Manager with little attention being made to the actual job responsibilities. Most dealers use them out of necessity, not as a tool for success. Successful dealers use Job Descriptions as a tool to Coach, Lead and Mentor their salespeople. A well written Job Description should include two main parts: Checklist of daily responsibilities and Experience/Attributes desired in an applicant. When written correctly, it will serve as a valuable tool for the dealership to hold employees accountable.

One-on-Ones

How often do you sit down with your Salespeople and conduct one-on-ones? Daily? Weekly? Monthly? Challenge yourself and your Sales Managers to take 5-10 minutes every morning for each salesperson. Make sure your receptionist is aware that you are not to be interrupted during this time except for emergencies. In addition, put your cell phone away, avoid answering calls and by all means don’t check your email. This is uninterrupted time for you and that Salesperson. You should be prepared for these meetings and the Salesperson should be prepared as well. Develop an agenda that can be used repetitively so everyone knows what will be accomplished. During this meeting, you are responsible for Coaching and Mentoring them … not Managing. In other words, don’t just review their performance for the current month. Spend this time helping them improve their skills. Focus on whatever they need to do differently to get better results.

Checklists and Measurements

Someone much wiser than me penned the quote “What gets measured gets done”. There couldn’t be any truer words as it relates to the car business. Is your dealership incorporating daily, weekly and monthly checklists and measurements for your employees? This includes your Management team as well as your Salespeople. Develop a checklist for each position and hold them responsible for completing each of their tasks. When these are being checked daily during One-on-Ones, it improves the odds for creating consistency and the culture of Accountability.

Training

I know … I know … you’re really busy. You try to train, but there just isn’t enough time in the day to do everything. The first thing that falls to the wayside is usually Training. What if I told you that you could spend only 15 minutes a day with your team and greatly increase your bottom line sales results? Could you find that kind of time? I’m sure you could. The problem with Training is that it takes effort. You can’t just stand in front of a group of Salespeople and talk to them for 15 minutes and expect to drive great results. You have to plan and prepare for each session. So, I would encourage you to look into training resources that you already have or invest in material from a third-party that you can use.

In the end, it all comes down to you. How committed are you to implementing the necessary changes to create a Culture of Accountability? If you are committed to the necessary changes, you will definitely be rewarded for your efforts. Oh yeah … and your employees may just thank you.

Busting The Negotiation Myth

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Busting The Negotiation Myth

This blog post was written by Matt Weinberg, Senior VP of Customer Experience for Drive Motors, the leading e-commerce platform for Auto dealers. It is reposted here with permission. _________

Consumers hate the established car-buying experience. We’ve said it before. It’s a well-known fact throughout the automotive industry. Car dealers understand this. And yet, many dealers believe that customers want to come into the showroom and negotiate a deal. The truth? They don’t. 

While most consumers do negotiate, they don’t actually want to. Negotiating is a top source of frustration for customers. They’d prefer to completely avoid it. The reason they negotiate is that they suspect dealers aren’t offering a competitive price up front. Customers feel like they have to negotiate because it’s the only way to get a fair price.

In today’s economy, people value (and often expect) transparency. It’s the number one differentiator between dealerships, which means dealers that offer it have a leg up on the competition. So why do many still resist it?

Many dealers worry that offering transparency, especially when it comes to pricing, will hurt their profitability. Luckily, this is a myth. Transparency actually improves profitability. Dealers that show realistic pricing online actually increase PVR by $785.

Whether you offer transparent pricing or not, customers can find it online. It’s no wonder dealers that only show MSRP online are losing customers. But dealers that offer artificially low internet prices, only to increase them once a customer is in the showroom, are driving customers away, too.

Offering price transparency isn’t the same as offering the absolute lowest price. “Low price and transparent or fair price are the same in the consumer’s mind,” according to a Cox Automotive study. Dealers that embrace transparency actually earn more profits.

By being open and honest with customers when it comes to pricing, dealers can increase profitability, earn new customers, and build loyalty and trust with customers and staff alike.

 

How Different is Your Dealership?

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Differentiation gives shoppers a reason to choose your dealership from among other options in the market area. It may also give you the ability to compete on features other than price. In short, a well-differentiated dealership can attract more customers and charge more than their competitors.

How does your dealership stack up against your main competitors?

Ask yourself some questions:

  1. What are the top 3 features or attributes that differentiate your store from your 2 or 3 most important competitors?
  2. What are the top 3 features or attributes that differentiate each of your key competitors from your store?
  3. Which of the features and attributes are most important or relevant to your customers?
  4. How many of your customers and prospective customers are familiar with your differentiators?
  5. How do you know the answers to these questions?
  • We researched our customers
  • Experience
  • Gut Feel
  • Guess

Differentiation versus Table Stakes

Dealerships can lose track of how their differentiation compares to that of their key competitors over time. What started as a highly differentiated feature loses that position as competitors find ways to emulate what once gave you a competitive advantage.

Differentiated features in automobiles offer a good example. In the 1940’s electric windows were found on a few luxury brands such as Packard and Lincoln.  It was an extra cost option that differentiated high-end models within these brands. Today virtually every car has electric windows. The feature is necessary but not different. Power windows are table stakes in the competition for car buyers. Manufacturers can’t charge more yet can’t sell a vehicle without this feature. Table stakes are what is required to “get in the game”. How many features does your dealership promote that are truly different versus those that are table stakes?

Make sure your differentiators are still different. Ask your customers what matters to them. For a more in-depth look at evaluating your differentiation try the PWC “Right to Win” calculator found online here. See the examples below and then enter your own differentiators.

 

 

 

 

Friction in the Automobile Sales Process

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Reduce friction in the automotive sales process with one-price selling

Friction is the resistance to motion. Skiers understand that reducing friction allows their skis to glide smoothly and effortlessly down the slopes. Identifying the sources of friction in the automobile sales process and reducing or eliminating them can help us encourage customers to glide smoothly and effortlessly toward vehicle ownership. It’s simple. Less friction is more fun for both skiers and auto shoppers. Reducing friction in the automobile sales process is an important goal when looking at the end-to-end journey of a shopper. Friction at any point along the journey can discourage, distract or delay the shopping process. One-price selling is an important tactic in the goal to reduce friction for consumers shopping for a vehicle. Let’s look at some of the sources of friction that dealers may wish to address to increase sales, market share, and efficiency. We’ll also comment on how reducing friction creates a better customer experience.

Are you visible online?

If a shopper is looking for vehicles like the ones you sell or searching for you by name online are you easily discovered? If you are not optimizing your site so that Google serves you up in the search results that creates friction. If your paid search isn’t putting you in the top 3 results you’ve created resistance to moving ahead. Today the automobile sales process starts online and usually includes search.Without an optimization and paid strategy that makes you ubiquitous for the important branded and non-branded terms, you’ve made it harder to do business with you right out of the gate.

Is your website experience smooth and friction free? 

Look at your Google Analytics metrics and see which pages get the most traffic. Most of your visitors want to see your vehicles. Your used SRP and VDP are probably your most visited pages followed by new SRP and VDPs. New car specials usually round out the top pages. Shoppers want to know do you have it? What’s it look like? Does it have the features I want? What is the price? What is special or on sale? A home page that is full of buttons, pop-ups, starbursts and other distractions runs the risk of creating friction through the paralysis of choice. Too many choices create confusion, paralysis, and dissatisfaction. How clean and clear are your VDP pages? Are your pictures spectacular? Are features easy to find? And perhaps most importantly is your price prominent. Considering merchandising your vehicles without prices? Think back to your reaction that last time you searched for a product online and you couldn’t see the price. It was probably frustrating and caused you to jump to another site. That’s friction and it will cost you sales.

Hello. Is anybody home?

According to leading call management solution Call Revu 360 one in three sales calls goes unanswered. Before you spend more advertising dollars to generate calls, leads and walk-in visits you need to plug the leaks in your phone system. Nothing says we don’t care about you like a phone call that goes unanswered or a call put on hold or a call sent to an extension that never picks up. Why aren’t your receptionists and BDC agents some of your most prized team members? Nothing reduces friction at a critical moment in the sales journey like a great phone process and top notch, motivated people answering your customer’s questions. Think about your phone process. Are customers gliding smoothly and effortlessly towards a new vehicle or do you have friction?

Your Sales Process

You’ve done everything right. From your online presence to your web experience all the way through a phone inquiry. Everything has gone smoothly.  And now wonder of wonders the customer is on your doorstep. At this point does your process reflect the fact that your customer has spent over 12 hours online researching their next car on as many as 25 websites? Are you ready to guide your customer smoothly and effortlessly on the final leg of their journey? Or, are you going to start from the beginning and turn the shopping process into a 4-hour ordeal featuring 2 hours of back and forth negotiation? The One-Price automotive sales process implemented by Ryan Adams Group reduces friction at the most critical step in the sale.   Experience demonstrates that shoppers perform the vast majority of their research online and enter the dealership ready to buy. The transparency and straightforward nature of the one-price process reduce friction significantly and allow your customers to glide into a new vehicle.

A Change in Thinking

Consider the path your customer takes to your showroom during the automobile purchase process. Examine all the points along the way that create friction. Remember friction is resistance to movement. Think about what you can do at each step in the shopping process to reduce or eliminate friction.

 

 

Digital Natives Are Changing Retail Automotive

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75 Million Millennials (age 23-37) are predicted to account for 40% of U.S. new vehicle sales by 2020. According to J.D. Power millennials purchased just over 4 million vehicles in 2016, 29% of the new vehicle market. Millennials are the first generation to enter their teen years as Digital Natives. Digital Natives came of age with the internet.

Millennials rely on digital tools to facilitate social interaction and purchases. They communicate with friends and family via a host of instant message and chat apps. They buy airline tickets on Kayak, share the cost of a restaurant meal using Venmo and use Apple Pay to shop for fashion. They book vacation stays at Airbnb using a smartphone and find a date by “swiping right”.

This smartphone-enabled generation expects a fast, streamlined process that’s as close to friction-free as possible. Millennials are accustomed to a subscription or pay as you go style of transaction. Withholding payment information signals a retailer is not in tune with how this generation acquires the things that are important to them. Not having accurate, VIN specific payments on a dealer website makes it more difficult for members of Gen Y to get some of the most important information they require to select and own or lease a vehicle.  This generation doesn’t negotiate, they compare.

It’s no surprise that programs offered through True Car, Costco and others continue to gain in popularity among all age groups including millennials. These programs promise a great value, transparent and upfront pricing and a fast, no-hassle experience. Costco alone facilitates the sale of over 400,000 cars annually.

These programs exist and flourish because dealers continue to withhold information and insist on herding potential customers through an outdated sales process.  The irony is that rather than providing price and payment transparency directly to shoppers, automotive retailers are paying fees to Costco and others who then offer transparency on behalf of the retailer. Based on the popularity of these programs it begs the question: why don’t dealers cut out the middleman and offer transparent pricing and a hassle-free experience to all of their customers?

Final thoughts:

Millennials will soon be the largest segment of new car buyers. They value friction-free, mobile-enabled transactions. Transparent, hassle-free programs offered by third parties are gaining popularity. The unintended message dealers are communicating is that Costco is trustworthy, car dealers – not so much. Now is the time for auto retailers to align their business model with the needs of the first generation of Digital Natives. The alternative is to continue to pay Costco and others to do it for them.

 

E-commerce and One-Price Selling Go Together

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e-commerce and one-price

E-Commerce in retail automotive is here. It works and a segment of car buyers are embracing it. Most of the innovation is coming from non-traditional disruptors such as Carvana. They are selling thousands of cars per month and they are doing it without a traditional storefront and with hourly employees who help facilitate the transaction over the phone. They do not employ sales people nor do they have expensive real estate and facilities.

Here are the key e-commerce success factors at Carvana:

Above average vehicles – Carvana sells only vehicles without reported accidents. They use both CarFax and AutoCheck to validate the vehicle history. While this limits the types of vehicles and price points they can offer, it does send a very powerful message: Carvana only sells good cars.

Great pictures and disclosures – Carvana went to great expense to create arguably the best online photo process in the retail automotive business. Features are called out and, most importantly, imperfections are disclosed. Unlike most traditional car dealers, they do not display cars online until they are detailed and standing tall.

Assurance – Confidence is built with a thorough, 150-point vehicle inspection, a 100-day bumper to bumper limited warranty and a 7-day money back guarantee.

Price integrity – Carvana features a no-haggle price. They put their best price on the vehicle and post Kelley Blue Book Retail as a comparison. They also show customers the interest rate up front and have a credible rate comparison tool. They can approve many customers for a firm rate in a couple of minutes. Because they are upfront with a non-negotiable price and firm interest rate they can display a very accurate monthly payment. Interestingly the monthly payment is in the largest font on the vehicle detail page.

Here are our thoughts for franchise dealers moving towards e-commerce.

Transition to a one-price business model – To succeed in e-commerce, dealers need to build trust. Transparent pricing is the foundation of online trust. Without a firm price, why would a customer commit to a car online? How useful is a payment calculator if the payment is based on a fictitious price? A major benefit of moving part of the transaction online is saving the shopper time. Does it really make sense to have the customer use the online tools only to start over in the store with price negotiations? Not only are time savings an illusion but the online shopping tools turn out to be a just conversion tactic. Without a transparent price, there is friction in the shopping process which ultimately doesn’t make car buying less painful.

Stop putting ugly pictures online – Taking cell phone snapshots of non-detailed cars reflects poorly on the dealership brand and overall impression of quality for the vehicles you sell. I can’t think of another retailer who puts their “worst foot forward” by rushing a sub-standard product image online. Yes, we understand that a used car goes down in value every day and that you are anxious to offer the vehicle for sale. Either fix the recon process or use a “coming soon” image. Check out sonicautomotive.com for a good example of “coming soon” images. Sonic’s Echo Park dealerships, echopark.com, are doing a great job presenting used cars. They do it with an affordable photo studio, a consistent photo layout and process and no amateur cell phone images. The first impression they make is pride in their merchandise and that they sell top quality used cars. Echo Park’s vehicle images communicate trust.

Stand behind your product in writing –  To encourage shoppers to commit online reduce the risk. If you are selling new or quality reconditioned vehicles go ahead and offer a money back guarantee. Most people don’t want to return a car unless there is something very wrong. It’s just too much hassle. Be honest, whether you have a written policy or not, don’t you usually take care of customers with legitimate issues? Since you are going to do it anyway why not get credit for it? My personal experience working for some very high volume one-price stores is returns happen very infrequently. Once again, you are building trust by reducing perceived risks.

Franchise dealers are facing a big opportunity

Franchise dealers have a unique opportunity to embrace the future and deliver a shopping experience that puts customers first. Delivering the best customer experience by reducing friction throughout the purchase process is the key. When dealers combine high tech with high touch they build a human experience that technology enhances.

Five Steps to a Better Customer Experience

  1. Start with a website that is easy to navigate with real prices and payments.
  2. Let shoppers calculate their own monthly payments for finance and lease transactions.
  3. Take beautiful pictures.
  4. Stop negotiating and eliminate the four-hour marathon car buying process.
  5. Create a culture that values being helpful and persuasive not manipulative.

Your customers are searching for a better way to buy a car.

Ryan Adams Group is here to help you. We are committed to a better customer car buying experience. Call if you are curious or visit us at RyanAdamsGroup.com.

Faster, Simpler, Easier – Why no haggle pricing is the future of auto retailing

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doritos amazon dash button

Do you like Doritos? If you like them a lot you probably don’t want to run out of them. You may like them enough that you don’t have the patience to drive to the store to replenish your Doritos stash. You may also find ordering online is just too much trouble to secure your precious glow in the dark orange goodness.

You want on-demand Doritos. And, Amazon knows this.

Because Amazon is the master of Faster, Simpler, Easier they have reduced the friction in speedy Doritos acquisition so that when you press the Amazon Doritos Dash Button an emergency load of nutrient-free, finger-staining, fluorescent crunchiness is headed your way.

Let’s not confuse purchasing a bag of snacks with acquiring a new car. They are vastly different transactions. But let’s also not ignore how Amazon and other companies have raised consumer expectations about how easy it should be to purchase things we use every day.

Study after study shows that negotiating the price of a car creates strong emotions including fear, anxiety, frustration and disappointment. Add the confusion and tension that customer feel when they enter the finance office and we can see why customers don’t purchase vehicles more often. According to the 2015 Driving Sales Consumer Experience Research commissioned through DrivingSales University 64% of consumers surveyed said they would buy more often if the dealership experience wasn’t so difficult. According to the same research fully 99% of respondents said they expected a hassle when visiting a car dealership.

We are still transacting car sales as if we were horse traders. In the era of horse trading little was known about the history of the horse, there was no warranty or return policy and the buyer assumed all the risk. Horse trading exemplified the principle of caveat emptor – buyer beware. Today information availability is symmetrical. Unlike the pre-internet era, buyers have virtually the same information as sellers do. Isn’t it time to introduce true price transparency and start focusing on an extraordinary guest experience not setting up an adversarial relationship where we haggle over a smaller and smaller front end margin?

As stated in the subtitle of this article “…no haggle pricing is the future of auto retailing.” New retail concepts are entering the market. Carvana, AutoNation USA, Carite, CarSense, Echo Park, Sonic One, CarBiz are all racing to bring a faster, simpler easier purchase process to consumers. While these concepts all vary in execution, they all have one common foundation: no haggle pricing. Progressive no-haggle dealers such as Rydell Chevrolet, Apple Autos, Walser Automotive Group, Morrie’s Auto Group, Mullinax Ford, One Toyota, CarMax, Sonic One, Grappone Auto Group, Manchester Honda, Holler Classic, LeHigh Valley Lexus and many others are part of a group of legacy dealers who left negotiating behind to improve the customer experience and sell cars in volume.  The simple fact is there are no innovators in retail auto introducing a new concept that relies on negotiating prices.

Faster, Simpler, Easier is going to win.

Curious about no haggle pricing and the one-price business model for car dealers? Ryan Adams Group Guides dealers who are converting to one-price selling. Take a look at how we can help.

 

 

 

 

 

 

Every Business Wants To Be Special

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Every business wants to be special. Being special in the mind of your audience means they prefer you to other alternatives and value your products and services more highly. Shoppers are naturally attracted to businesses that are special.

The idea of specialness can seem vague. How do you know your business is special? How can you intentionally create specialness?

Three Factors Create Specialness

 

Difference, Relevance and Familiarity make a business special

 

  1. Differentiation – what are the features and attributes that make your business dramatically different and better versus your competition? Differentiation can only be defined in relation to your competition. Your business may have some wonderful capabilities but if your competitors possess them as well they are not different. As an example, a large inventory selection may be important to your customers, but if every other competitor has a similar size inventory it is not a point of differentiation. For more in-depth information on differentiation see our recent post. 
  2. Relevance –  think of relevance as the degree to which a product or service solves a problem or satisfies a need. If your differentiated features don’t satisfy needs or solve problems for a significant customer group those features are not contributing to the specialness of your organization. As an example, being family owned may differentiate your business but is that relevant to a large group of customers?
  3. Familiarity – You can’t be anonymous and special. Familiarity means your customers are not merely aware of your business but have knowledge of how they may be affected in a positive way. Awareness means I’ve heard of you. Familiarity means I know enough to buy. Craft your communications to bring a deeper understanding of those attributes that truly set you apart.

Finals thoughts: If you aren’t different customers won’t pay a premium. If you aren’t relevant they won’t care. If you aren’t familiar they won’t understand you well enough to buy.

About the author: Alan Krutsch