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Critical Steps to Digital Retail Success

So You Bought a Digital Retail Solution. Now What?

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Article Highlights

  1. Adjust your thinking from “digital-to-retail” to “digital retail.” The fact is, a digital approach to car sales is a part of the dealer’s retail experience now – even if it doesn’t happen in the showroom.
  2. Perhaps the most important advice to consider about implementation is this: slow and steady wins the race. Map a gradual plan to your digital retailing success. That’s difficult to do, thanks to the allure of all those high-value leads, but it’s crucial to long-term success.
  3. If you’re a single rooftop dealer, start with a small, dedicated digital retailing team who will become experts in “all things digital retail” at your store. These team members will allow your dealership to hone this new way of doing business while developing some best practices of your own. This team will also become a model for training when you are ready to roll it out dealership-wide. If you’re a multi-point dealer or dealer group, you can take a similar approach, but start with one team at one rooftop.

You took the step and made the investment in digital retailing. Congratulations! Now comes the hard part: implementation. To do it right, it takes the right attitude, a strategic plan, and a relentless focus on the team. Below are some best practices that will help you get from implementation to results in less time – and with less heartache.

Shift Your Perspective

Leads: Digital retailing creates a pipeline of information and engagement that can result in highly qualified leads. However, converting those highly-qualified leads into profitable sales doesn’t just happen by virtue of buying a digital retailing solution. It starts with changing your perspective. In essence, dealership sales teams must mentally “flip the script” and think relationship first, moving away from just getting a body into the store. You can do that by reaffirming that the customer made the right decision and showing that you value their time. That point is crucial because digital retailing exists, in large part, to expedite the process of going from research to purchase. It also happens to be a big deal to customers: Average time consumers spent in market has shrunk from 118 days in 2017 to just 96 days in 2019.1 At the same time, the number of dealerships visited has also continued to drop, while 41% of car buyers only visit one dealership – up from 30% just two years ago.1 That means you’ve to help buyers get to “yes” online and stop pushing customers to come in at the expense of losing them altogether. 

Sales: Adjust your thinking from “digital-to-retail” to “digital retail.” The fact is, a digital approach to car sales is a part of the dealer’s retail experience now – even if it doesn’t happen in the showroom. That’s a subtle but vital shift, and one that’s absolutely required for all team members. Placing true showroom value to the digital part of the process will prioritize the experience for your sales team and help them to understand that, even though the customer isn’t sitting directly in front of them, they’re still engaged and providing valuable information just like they were there at the same desk.

It’s also an important part of the customer’s dealership experience. Filling out paperwork and negotiating price are shoppers’ biggest frustrations with the car-buying process,1 all of which digital retailing can help alleviate.

A critical way to truly accelerate your sales is to reject the notion of digital separation and embrace the concept of one complete showroom experience across two locations. Whether it’s at the store or on the website, it’s still a showroom of cars – and customers want to buy them.

Transparency: Today’s car buyer has a treasure trove of information about the cars on your lot, the aftermarket products you sell, and the financing you have available. Regardless of whether you like it or not – it’s just the way it is. Smart managers are embracing the power of customer transparency and putting it to use with digital retailing. In doing so, you encourage customers to actively participate in the transaction, which helps to accelerate the process and build a stronger relationship. When you consider the overall dealership revenue cycle, the benefits of transparency are actually quite powerful. In fact, dealers who use Cox Automotive’s Digital Retailing platform generate 29% more gross profits per deal than other online lead sources2  – not to mention the potential for service and referral business than can come out of a great customer buying experience. 

Create a Strategic Plan

Perhaps the most important advice to consider about implementation is this: slow and steady wins the race. Map a gradual plan to your digital retailing success. That’s difficult to do, thanks to the allure of all those high-value leads, but it’s crucial to long-term success. In fact, not approaching digital retailing this way could actually harm your retention, because it puts your sales team in the over-promise/under-deliver trap. So instead of flipping a switch and hanging on to the wild ride, try a more measured plan.

Your digital retail strategic plan should:

  • Set your business priorities
  • Assess the dealership’s ability to respond to a significant shift in your sales process
  • Identify resources and staff who will be dedicated to leading your digital retail evolution
  • Create common goals for your dealership to work toward
  • Establish intended outcomes and results for you to measure your success against

You’ll also want to formally communicate your plan to your staff so they understand your business goals, the actions needed to achieve those goals and all other critical elements of your strategic plan.

Having this plan in place will shape and guide your digital retail evolution into the future. But keep in mind that this plan won’t magically transform your sales process overnight. It will require practice and training. It could involve redefining roles and how staff interact with clients at different phases of the process. It will take patience for your team to understand when and how to move shoppers to the next stage of the buying process in order to create a great customer experience.

Build Your Foundation

If you’re a single rooftop dealer, start with a small, dedicated digital retailing team who will become experts in “all things digital retail” at your store. These team members will allow your dealership to hone this new way of doing business while developing some best practices of your own. This team will also become a model for training when you are ready to roll it out dealership-wide.

If you’re a multi-point dealer or dealer group, you can take a similar approach, but start with one team at one rooftop. Once you get one location fully operational, then roll it out to multiple rooftops, but again, take a similar approach at each location, starting small and build on that success.

Create timelines and milestones and have clearly stated goals and objectives to work toward. It’s OK to move the goal posts if things don’t go exactly according to plan, but what’s more important is that you have a plan that helps drive your digital retailing evolution forward.

The Basics: Activating Your Plan

Step 1. Assign a Digital Retail Concierge. Digital retailing leads are like Super Leads. In other words, they convert at a whopping 16.9% on average,3 so you need a Super Salesperson to help make sure those Super Leads convert. As such, the Digital Retail Concierge is one of the most critical roles to establish within the dealership and will have a specific set of customer handling responsibilities including collecting as much information from the shopper ahead time (i.e., trade information, deal information, credit app, etc.), prepping the deal jacket, and communicating all shopper information to the appropriate team members (i.e., Sales, F&I, etc.). An ideal person suited for this role may currently be working in your BDC or Internet Sales department. Make certain that tyour Digital Retail Concierge is well acquainted with your dealership’s confidentiality and data privacy policies, as well.

Step 2. Focus on response rate: Customers who use digital retailing tools expect a quick and human response. Make it a goal to respond to all digital retail inquiries in under an hour. The faster the better.

Step 3. Make the message matter: Auto-responder and canned replies are worse than an empty inbox. Train your team to respond to the input the customer has provided as if they were sitting in the showroom. From the customer’s perspective, there’s no difference. Look at it this way: the customer is essentially structuring their own deal – they’re just doing it online. Just imagine how they feel when they have to start over again when they come to the dealership. As a result, if they don’t get a response that shows you are listening and using their specific information and answering their specific questions, then they’ll choose another dealership.

Step 4. Explain the process to customers: This step is about setting expectations – and it’s an extremely important one. Even though they’ve been asking for it for years, negotiating and starting the buying process online is still probably new to most car buyers, so it’s important that you tell them how the process will work from start to finish and what to expect along the way. It’s also critical to follow through with prompt responses on every communication, and be sure to let them know they can do as little or as much as they want online or at the dealership.

A great way to explain the process is to create an overview page of the sales process so car shoppers can understand it and know what to expect, like Driver’s Village does here. You can even include a short, dealer-branded video about the buying process, like this one. Make it fun and educational; show how digital retailing works and spotlight known customer points of possible frustration so that they’re prepared. Direct shoppers on your website to your overview page by using links on your homepage and VDPs.

Step 5. Bring in F&I products once the basics are mastered: Whether to use digital retailing for aftermarket products is a foundational decision and one that should be based on the team’s ability to manage the process appropriately. A good rule of thumb: master the basics of the car deal first and stair-step your way into more complex aspects of the deal like F&I.

A Few Final Tips

When working a deal online and communicating with digital retail shoppers, keep these important tips in mind:

  • Work the payment, not the price.
  • Differentiate your dealership on the experience and time saved, not just price.
  • Sell the car, not the appointment. Resist temptation to ask the customer to “just come in.”
  • Make it easy for the shopper to move forward. Discuss next steps and provide options.
Partner for Success

Digital Retailing can be a powerful game-changer for your dealership, but choosing the right partner is critical. Cox Automotive’s Digital Retailing solution is focused on taking the pain out of buying and selling cars and creating a seamless experience from online to offline.  Once you’ve pulled the trigger and signed up for this groundbreaking platform, you’ll get an implementation team and a dedicated Digital Retailing Specialist who will activate your account and train your team.

Let us show you how Cox Automotive Digital Retailing can help transform your business into a digital retailer of the future. Schedule a demo now.

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Sources

1)  2019 Car Buyer’s Journey, Cox Automotive

2)  Cox Automotive Accelerate platform close rate and profit analysis (Aug 2018-Jan 2019); gross profits compared to other Cox Automotive leads.

3) Cox Automotive Product Analytics, Autotrader digital retailing close rate vs non-digital retailing leads as of April 2019, excludes active leads