Amazon

Surviving the Digital Disruption.

If you’ve visited a new car dealership within the past few years, you may have noticed the upgraded facilities and perhaps enjoyed expanded amenities, such as brewed coffee and snacks while waiting in the service department. Certainly, these changes are welcome, bringing aged dealerships into the 21st century.

Perfect Dealership: Surviving the Digital Disruption

But “looks” are only part of the equation. How car dealers treat their employees and customers hasn’t always kept up with modern practices, especially in this digital age. Indeed, too many salespeople must still rely heavily on their commissions to earn a living, which leads to high turnover as they look for more secure employment.

Further, time-pressed customers may show frustration if they are unable to initiate the purchase process online or at least schedule a test drive. These are just two of the more noteworthy habits of car dealerships, as pointed out by Max Zanan in his book, “Perfect Dealership: Surviving the Digital Disruption.” (CreateSpace Independent Publishing Platform; 120 pages; Amazon: $9.99 (Paperback) or $5.99 (Kindle Book).)

As a side note, most of my book reviews to date have focused on a particular car model, brand or in some instances a personality, such as Steve McQueen.

About the Author

This time, I accepted a book that the author says is dedicated to “dealer principals,” including general managers — defined as men and women who lead the dealer group or an individual operation.

Having worked as an automotive journalist for more than a dozen years and purchased or leased seven new cars and at least that many used cars over the past 40 years, I wanted to gain an insider’s look at sales and service. I was not disappointed.

Zanan, an automotive professional with nearly 20 years of experience as a general manager and later as a Finance & Insurance (F&I) executive before launching Total Dealer Compliance, holds nothing back as he warns dealers to brace for digital disruption.

That is to say for dealers to expect a revolution that may very well be orchestrated by Amazon or other outside forces, what could lead to their demise if they don’t begin embracing change now.

In particular, those who fail to see the changes coming or take appropriate action, they may go by the way of the Blockbuster video chain — overtaken by Redbox automated kiosks, Netflix and other video-on-demand services.

The Four Obsessions

Zanan pointed out four areas, what he called “obsessions” for dealers to emphasize moving forward: product knowledge; employee training; customer service; and a shared, common goal among all departments.

Concerning the first point, product knowledge remains a weakness at many dealerships, something the author noted when he was shopping for a Toyota 4Runner Limited. He personally wanted to confirm that the SUV had ventilated seats to go with the heated seats, something the salesperson couldn’t answer. Upon entering the cabin himself, Zanan discovered that the same dial used for heating also controlled ventilation and that was something the sales staff should have known. As a result of that poor experience, the author proposes that dealers train and certify their staff model by model, ensuring that customers never know more about the vehicles than their staff.

Second, on the employee training part, Zanan notes that the industry lacks consistent training — if offered at all. Poorly trained employees are not just less knowledgeable, but may be unfamiliar with workplace rules, laws, or how to work together as a team, among other inconsistencies. Poorly trained employees are also more likely to leave, costing the dealer far more money in turnover costs than in training overhead.

Third, is customer service a problem? You bet! And in some cases, it is so poor that customers won’t return. Consequently, lost customers mean lost capital as consumers flee to competitors. With Amazon already selling Fiats online in Europe, disgruntled customers are certain to look at other options as they emerge stateside. The author emphasized that customer service must go beyond the expected to include such perks as loaner vehicles, an improved online experience, and follow up. Certainly, we can all think of areas where customer service can and should improve. Those dealers who don’t change will lose out; some may succumb.

The fourth area of concern has to do with a shared, common goal among departments. Earlier this year I personally witnessed that in action when I completed my vehicle purchase, then visiting with the F&I executive (I turned down his multiple warranty and maintenance plan pitches), before meeting with a maintenance technician in the service department where I scheduled my initial service appointment. Because of this particular experience, I understood this dealership had its departments working together, which makes for a better customer experience as well as for a more profitable operation.

Toward Improvements That Matter

Beyond the obvious amenities of coffee and snack, Zanan urges dealers to explore other ways to attract customers and build on their experience. These include:

Websites that work. Some dealers fail to understand how customers shop online, not taking into account the various platforms they use to obtain information, especially smartphones. Not only should a site load quickly, but they should be usable across all platforms — computers, smartphones and tablets.

Websites that supply information customers want. Certainly, we’re not yet at the point where customers can purchase a vehicle online, but we’re headed in that direction. In the meantime, the information provided should include items that customers may not have access to today, including online parts ordering, service plan comparisons and extended warranties. Young, tech-savvy consumers will soon dominate the marketplace, therefore they expect an experience similar to shopping with Amazon — what can your dealer do to move in that direction?

Giving customers what they want. Customers are more likely to use your service department (which has higher profits than the sales floor) when loaner vehicles are available. Furthermore, dealers might also consider staying open late at night to service customers, pick up and return repaired vehicles, offer incentivized maintenance plans and create loyalty programs. In effect, Zanan urged dealers to overhaul their present operation as change is happening right now for an industry that typically is slow to adjust.

Thriving Through Digital Disruption

Although the author most certainly stressed the challenges facing dealers, including computer breaches, errant social media activity, and regulatory compliance, he concluded his appeal by outlining 10 commandments or takeaways dealer principals should keep in mind. In all, they serve as a clarion call for the industry, while offering encouragement that such changes can only prosper those who implement them.

See Also — Book Review — McQueen’s Machines