How can car dealerships better accommodate customers who do most of their new car research online? What are some best practices to help give car buyers a better overall experience? And why does it take so darn long for a new car transaction to complete?
These were just a few questions tackled last month by a panel of local dealer representatives invited to talk to Edmunds.com's 500 employees at the company's semi-annual all-company meeting. The panel was convened by Edmunds.com CEO Avi Steinlauf as part of the company's commitment to bridge the gap between car dealers and consumers and to make the car buying process easier for both sides.
Edmunds.com's Dealer Panel (from L to R): Linda Webber of Carson (CA) Nissan, Bill Stephens of Cerritos (CA) Infiniti, Enamul Islam of Keyes Lexus (Van Nuys, CA), Mike McVeigh of Videon (PA) Dodge Chrysler Jeep Ram, and Edmunds.com CEO Avi Steinlauf
Accommodating the Online Consumer
The dealers on the panel admitted that their industry needs to continue the break from traditional sales routines and make adjustments that recognize the vital role that online tools now have in the car buying process. The key, they agreed, is to open up the dialogue by not asking if customers have started their research, but rather how deep they are in their research.
"The consumer comes in now armed with more information than sometimes the salespeople," said Mike McVeigh, general sales manager at a Chrysler dealership in Pennsylvania. "When you have a person who's done this research... you need to expedite that service and make sure it's streamlined from selection to finance to delivery."
McVeigh estimated that 80 to 90 percent of his customers have done their homework before stepping foot on his lot. "We can't treat them like they're silly or like they're not in the game," he said, "because they get frustrated and they get upset and they go to somebody else and buy a car."
Internet research is so prevalent, in fact, that it's led some dealerships to reevaluate and restructure their operations. This is what happened at Keyes Lexus in Van Nuys when they were presented with data that showed that 95 percent of all Lexus customers do some form of Internet research.
"So, we sort of merged all the departments into one department," said Enamul Islam, director of eCommerce at Keyes. "There is no such thing as an Internet or retail department, so everybody gets the same treatment."
Linda Webber, a sales and marketing director at a Nissan dealership in Carson, CA, said that her dealership has assumed a similar transformation where the Internet managers now meet with both the sales associates and consumers to identify the depth of research "to get a better feel for what we need to do to meet the customers' needs."
A Quicker Sale
Edmunds.com presented the panel with a video of customer testimonials that touched on one specific theme: "Why does it take so long to buy a new car at the dealership?" One car buyer even lamented that it takes more time to close a new car deal than it takes to close a three million dollar real estate transaction. A recent study found that new-car buyers on average spend 4.3 hours in the dealership before closing their purchase.
One way to manage consumer anxiety at the dealership is to set appropriate expectations for buyers. Dealers, for example, can be in so much of a rush to make a sale, said Bill Stephens, general manager at an Infiniti dealership in Cerritos, CA, that they'll promise shorter closing times even when they know it will take longer.
"We're our own worst enemy," said Mr. Stephens. "It's an education process and we really have a lot of room to improve."
But in many cases, said Mr. Stephens, some of the hang-ups are often out of his control. Stephens said that he sat down with his finance manager and counted at least 27 legally required signatures across approximately 15 documents before the deal can be closed. This can create congestion — and tension — in the finance office, he said, when "you got the guy who has to pick up his family at soccer practice and the person ahead of him is a paralegal and reading every contract."
Dealers also agree that the emergence of new car technologies has made the delivery process longer as dealers explain features that are new to many consumers such as infotainment systems, lane-departure warnings, and automatic parking features. Ms. Webber said that a Nissan Leaf delivery alone can take two hours just to explain all the new technology.
But all the dealers on the panel agreed that one way to streamline the sales process is to provide better education to consumers about the documentation that's required before they start with the paperwork.
"When you get the guy who comes in who has an expired registration, who has an expired license or an expired insurance card, that brings everything to a grinding halt," said Mr. McVeigh, "That's where the experience goes from a great experience to a four-hour [process]."
Mr. McVeigh said that his Pennsylvania dealership now provides its Internet buyers with a "consumer delivery checklist" before they arrive at the lot. Edmunds.com also offers a similar checklist ("How to Speed Up Car-Buying Paperwork") that all dealers can send to their customers.
It's the little things...
Members of the panel also discussed some of the finer detailed practices that make the dealership stand out in the eyes of car shoppers. For Mr. Islam, who strives to give his Lexus dealership a "Nordstrom-like experience, so when they walk out of there, they feel good about their total experience," there are several iPads on hand with wi-fi access for customers who are looking to kill time. Mr. Islam's dealership also caters to the "luxury experience" with Starbucks coffeemaker on-site and freshly baked cookies.
Mr. McVeigh said that the personal customer service touch that he offers helps him separate his dealership from others in the area. To that end, his dealership does not use automatic or template responses to customer inquiries. And as a general manager, he's copied on all e-mail correspondences between his sales associates and customers seeking a price quote. This allows him to jump in at any time to keep the sales process on track. Mc Veigh also schedules sales associates to be on call even during off-hours so that customers can reach someone by phone at any time.
"You have to be different," said Mr. McVeigh. "It's lonely on that extra mile, but if you go that extra mile for the consumer, it'll pay dividends."
Edmunds.com is proud to work with members of its Premier Dealer Program to enhance the car buying experience for both dealers and consumers. Learn more by contacting an Edmunds.com dealer representative at 1-855-EDMUNDS or firstname.lastname@example.org.