Time-honored strategies can still have a profound impact in the Digital Age.

Time-honored strategies can still have a profound impact in the Digital Age.

Lately it seems that every article you read about the automotive industry details “transaction-ready” buyers with new companies springing up promising these shoppers an experience handled entirely online, from financing to delivery. These new players are even casting aside the idea of a test drive. They say it’s an antiquated practice buyers no longer have any interest in and could even create an impediment to the sale. They are arguing that modern car buyers want the entire process done online. Oh, and, by the way, they want it to take less than an hour.

I don’t debate that shoppers are coming to showrooms more prepared than they were even a year ago. Recent statistics show car buyers are spending an average of 18 to 20 hours researching vehicle information and inventory online before they even set foot on a dealership floor. But I truly believe what these consumers want and are pushing for is not an entirely digitized road to the sale, but rather a more efficient and streamlined vehicle transaction process.

The question surrounding this new type of buyer isn’t “How can we cut out the dealership experience entirely,” but rather, “How can we best accelerate the sales process?” It’s a question dealers and OEMs worldwide are devoting large amounts of resources to as they struggle to figure it out, but I believe the answer is actually quite simple: manager involvement and, yes, test drives.

Get the Manager Involved

I know it sounds simplistic, but the dealers I work with who have incorporated manager introductions into the sales process are seeing a 20% bump in closing ratios. On a typical walk-in, a deal with no introduction closed at 17%. It closed at 29% with a test drive (more on that below) and, if a manager introduction was made, the numbers jumped to a whopping 38% close ratio.

Those numbers are even higher with appointments. An appointment has an average closing ratio of 44%, which jumps to 58% when the customer takes a test drive. And when a manager is involved, these visits close at 62%!

The message is clear: By taking a few minutes to get managers involved in the process, you can increase your sales ratios by more than 20%.  Want to see these numbers go even higher? We’ve found that involving a manager early in the sales process increases these ratios by a few more percentage points.

Test Drives are Not Dead

All this talk about transaction-ready consumers has led some dealerships to assume the test drive is no longer necessary, but nothing could be further than the truth. If your gross is low, it’s because your test drives are not happening, period.

Without a test drive, people are not touching and experiencing the vehicle, and in turn they do not perceive value. If they don’t perceive value, the negotiations take longer. It becomes more likely than not the customer will walk away from your dealership or there will be no gross. A dealership’s best way to build value for the vehicles they are selling is the test drive, and it is also the one thing no shopper will never be able to do online.

The numbers don’t lie: We have found that test drives increase closing ratios dramatically, by more than 10% with new guests and almost 15% with appointments.

It’s true that today’s buyers want a quicker process. But the dealerships winning the sales, referrals and loyalties of those consumers are finding that speeding up and streamlining the process actually comes from better educating consumers on the value of the vehicle they are interested in purchasing, as well as the value the dealership brings to the table.

Consumers who understand both of those things, on average, spend less time on negotiations and are often are better F&I candidates as well. The entire process becomes easier, less stressful and more satisfying for everyone involved. And that is what consumers are really searching for: a car-buying experience that is relaxed and easy, ending with them driving away in a vehicle for which they believe they paid a fair price.

Knowing you can increase your close ratios by as much as 20%, it’s time to stop looking for ways to cut people out of the process. Get back to the basics and focus on delivering an enjoyable customer experience.

Mark Stringfellow is vice president of sales at The Next Up and a 14-year veteran of the automotive software sales, consulting and management industry. [email protected]