Transformation of Your Dealership – Shifting Paradigms

Those of you that have known me through the years, know many of the processes and techniques the entire retail car business uses daily were originally invented and implemented by me. In other words, the stuff we do every day in every dealership, much of it I created. “Old school, I Invented old school…” that’ a fact that can be proven. So, let’s move on to the important stuff.

The challenge for dealers and dealership employees reading this is to give deep thought and do more research and post ideas here.

Over the last 43 years in the car business, I have had to throw on the brakes, stop, reverse, and go in a completely new direction. So, I advanced from “old school” to “newer school,” to the “latest school.” Survival and prosperity in our business has always been the dealers’ ability to evolve and change mindset. What I was teaching and creating, even 10 years ago, is no longer valid nor appropriate.

I’m saying that my ability to change and evolve has made me who I am today and kept me relevant. That is also your ability – to change direction, adapt, and create a new dealership model.

We cannot trust the manufacturers, and we certainly can’t trust most of our vendors to lead the way to change because they all have hidden motives that are not necessarily in the dealers’ best interests.

Unfortunately, many vendors, and even some manufacturers, are more interested in stealing your business and profits, and reselling your customer data to third parties, than they are at partnering; and some of us fools are paying them to do that. Therefore, this I what I am thinking: In light of everything that’s happening now, we have to take control of our destiny and proactively reinvent everything.

Carvana, Vroom, and other online car-buying services are not competitors. They are the call to action we needed to go where no dealers have gone before.

Through the years, every time I created new dealership processes, the resistance to change was the downfall of the losers, and the bold and daring among us were the winners.

Here’s the basis for the challenge: Imagine that our dealerships completely remodeled our selling methods to a concierge-home delivery model? Are you fully prepared to recommit to a total restructuring of everything you do in variable sales operations?

The Concierge – Home Delivery Sales and Service Business Model

Here are my assumptions.

Carvana offers the illusion that they are successful because they offer alleged A-to-Z online buying, financing, hassle-free delivery, and a return the car policy guarantee (even though most of the online reviews that I consider to be genuine reviews are averaging only two stars).

Additionally, they’re gaining a market awareness and traction with momentum; and even though they are losing a lot of money, they have been extremely successful at market disruption and selling increasing volume. They’ve created an image the public is buying into by saturating television and other media with their message.

Okay. We could go on and on about the situation, but now we have another challenge that is even more immediate. The COVID-19 pandemic. I think it is safe to say, nothing will ever be the same again after we weather this crisis. This virus has your customers staying home and isolating; and, as a result, we have seen restaurants, grocery stores, and a host of other businesses ramping up take-out and home delivery.

As a result of what I call the “Amazon Effect,” everyone – you, your dealership, we as an industry – has to immediately and radically shift our paradigms of who we are, how we think, and how we sell cars.  Pulling off this concept and making it work immediately is the only real option. Even though your dealership is open, your customers are on lock down and self-quarantined – they’re not coming to us.

Go All In

As many people know, I just survived a very aggressive cancer surgery. But, here I am, back doing what I do best, thinking and creating.

There is no reason our dealerships can’t outperform Carvana and Vroom or whatever interlopers are getting into our business and making under the table deals with other vendors that we formerly trusted.

Even though Carvana says it can deliver a car the same day, reports tell me that this isn’t always the way. Sometimes it takes them five to 15 days to get a car to the customer. This is because sometimes it appears that they do not have the car they advertised. Many times, it is looks to me to be a fake ad and they then hope to locate the car based on their relationship with other vendors and their partnership with Manheim. As dealers, we have the ability to get a real car to the customer the same day. We have the ability to offer stellar service and outperform them.

Reading their reviews, one thing appears obvious to the professional eye that’s been doing this a long time. Look for yourself. Do you get the impression there’s a lot of fake reviews, just based on wording and the source of the review? It isn’t normal for reviews to swing wildly to the extremes of five-stars and an equal number of one-star reviews.

Now, “Vision This” with Me

If you have the testicular fortitude, while we are already in this perfect rebuilding period following the crisis, your dealership could convert to a home-delivery, full-concierge model. I am talking about a BDC - Driven Total Concierge model, not an additional department. I am saying we convert our selling processes completely. If a consumer wants to come to the dealership to buy a car, we will certainly accommodate that. But, our main emphasis will be concierge sales and service, pickup and delivery. The majority of all transactions (if not all of the transaction) will be done online and telephone (text and conversation).

It has to be internet-driven and requires radio and television support advertising that mirrors Carvana, CarGurus, and Drivetime business plans and scheduling demographics. One thing that has become obvious to me is that all of these vendors are heavily driven by television commercials. The thinking in our business in recent years is that all effective advertising is done on the internet, pay-per-click, and social media. Carvana, CarGurus, TrueCar, Vroom, DriveTime, and a host of others are driving a lot, if not most, of their traffic with television.

Why We Will Beat the Disruptors at Their Own Game.

First of all, we need to start playing their game heads up. We have the people on the ground, we have manufacturer-certified technicians, and we have inventory and experience. Our warranties and service contracts are superior. Our superior advantage is that dealers have a service department and trained technicians offering much better support.

We have the ability to e-contract online and gather finance info. We have better finance sources than they do – great finance sources, not the “bottom feeders” some of these vendors are offering.

What’s holding us back? The number one thing is the lack of technology to totally transact a car deal. In writing this article, I researched heavily, looking for the technology or vendor that offered or facilitated our ability to sell a car with literally no human interaction from A to Z. It doesn’t exist for car dealers.

The second thing holding us back is that portion of your sales force desperately hanging on to the old school. Well, excuse me buttercup, but get over it. It’s never going to be that way again. As a dealer making decisions from the top down, you have to make a decision that this is the way it’s going to be, and if you can’t fit in and do business this way, you can’t stay here.

Now, I know what you’re thinking. Obviously, Carvana has the technology, as well as other several vendors. You are right, they have the technology, but they haven’t offered it to us. Instead, we have several vendors that have selfishly developed the technology to totally transact online, but they are stealing all of the profits for themselves. In effect, they become the dealer and we become the warehouse.

Manufacturers, like General Motors, have programs like “Shop, Click and Drive”; which, in my opinion has been a total abortion since inception. This should be an answer, but they just can’t help themselves by screwing with the dealers and getting in their own way. I’d really love to see this work, but they need to roll it out with less self-serving crap and let the dealers run with it. Not just General Motors; it seems like that pattern runs deep in manufacturer DNA.

One bright shining light I discovered in the maze of vendors offering partial online solutions is a vendor called Roadster. They appear to be agnostic when it comes to manufacturer allegiances and side deals with other vendors. Roadster, in my opinion, has the most complete online buying platform of any of the vendors I have researched. It still requires a minimum of human interaction, but I believe it is most nearly complete.

I’ve heard rumblings that there are great programs available that come close from Dealer eProcess, Darwin, and WeBuy. People have mentioned several CRM companies, but I am still warning dealers to beware of companies with ties to the manufacturers. Also, some companies are blatantly stealing your customer’s identifiable data to resell to third parties or siphoning off your profits for themselves. 

So, now, I need your help here. I want this to be one of the deepest thought-provoking, meaningful articles I’ve ever written. The challenge for dealers and dealership employees reading this is to give deep thought and do more research and post ideas here. Have a meeting with dealers and your managers, even your salespersons, and brainstorm this with me.

Thanks – Alpha Dawg