Category: Digital Retailing

3 Ways to Offer Shoppers a Differentiated Digital Experience

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Automotive digital marketing and avocados have something in common – both have fairly short “Best By” consumption timeframes, where something that recently seemed new is suddenly past its prime.  

The lesson here for dealers: don’t let your automotive web design and curated user experience gather dust. With more consumers doing more online than ever before, they have high expectations with their shopping experience.  

From browsing inventory and researching a model, to submitting a lead and reviewing your customer service, there are several points along the buying journey where you can differentiate your dealership and keep your customers coming back for more. Read on for 3 ways your dealership can differentiate the digital experience you offer shoppers, keeping them engaged while delivering more value to your business. 

  1. Support Meaningful Conversations 

Your dealership website offers a lot of information to consumers. Equally important, these pages collect highly valuable first-party data for your future use, such as targeting in-market shoppers with display ads or video ads.  

While retargeting ads have value, they offer one-way communication to consumers. In other words, they are marketing at people rather than conversing with them. As a dealer, you know how important person-to-person conversations are. So, how can you preserve shopper connections and support meaningful conversations?  

Through 3rd party integration with LivePerson, Video Chat and CoBrowse are aimed at creating a more engaging environment for online shoppers with more interactive features. As the name describes, Video Chat enables consumers to chat with dealers over video, which can be initiated from the Digital Retailing application. A handy tool for reviewing details, CoBrowse lets shoppers share their screens with dealers while shopping, allowing dealers to guide consumers as if they were side-by-side in the showroom. Ultimately, you want to replicate a good one-to-one experience, but digitally. 

  1. Provide Flexible Retailing Tools 

Automotive digital retailing is not often described as a leisure activity. Until recently, this step might have been a bit daunting to shoppers, and the turning point where they would hop in their car and pursue assistance at the dealership. This is becoming less and less the case – partly due to environmental circumstances, and also because the tools are becoming more user-friendly.  

The latest digital retailing solutions turn this challenging process into simple steps, giving the consumer a bit of validation as they move forward. They also provide flexibility with how and when the lead form is completed. For example, a consumer may be missing some information and they can skip a step and come back to it, rather than running into a dead end. 

Digital retailing of today is a self-driven and self-directed process. In other words, people want to be guided, but not forced. To keep people engaged and on the path toward submitting a deal, it is important to provide options for completing the form: pause for a break, get help, save it to edit later, etc. This flexibility translates to generating more automobile leads; a consequence of a consumer-first sales process, which is nothing new, but now it is digital-enabled. 

  1. Build Trust Through Reputation 

The saying goes that opposites attract, but not when it comes to recommendations for buying a car. When going through an important decision like this, people look for things they can relate to. More and more, consumers are looking for trust and the feeling of it within the automotive buying experience. This is where positive customer reviews can effectively tie a ribbon on your next deal.  

One of the ways you can differentiate from your competitors and answer the question “Why buy from us” is by investing in reputation management for car dealers. Your best advocate is the person who just bought from you. By soliciting their goodwill through Review Generation, and helping other consumers see the perks of this transaction, you can convince other people to do the same.  

A detailed review can be especially useful in building trust and illustrating the experience for a prospective customer. For instance, here are examples of superior customer service will score big points with consumers today: you offered to meet them wherever they were (i.e., for the test drive), made them feel safe, made the deal transparent, made things easy (deal signing, car delivery), and treated them like an individual.  

It gives shoppers confidence to learn that you are going the extra mile to transact in the way they want. There is power and opportunity in public recognition that your business cares, and you can use the tools of reputation management to broadcast this message in an authentic voice.  

From Websites and Digital Retailing, to Advertising and digital marketing services, Dealer.com solutions are built to connect consumers with dealers digitally. Let our team help you guide in-market shoppers through digital car-buying, dealership customer retention, and more. 

Breaking Down the Online and In-store Divide for Shoppers

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If you had a chance to tune in for the Cox Automotive Forward Focus session Breaking Down the Online and In-store Divide, then you would have heard Wayne Pastore, General Manager of Dealer.com, and Bob George, AVP Product Management for Dealer.com, discuss the changes that this year has brought to automotive digital retailing. While some aspects of the automotive industry began to slow down in March 2020, the need to connect the in-store and online buying experience was accelerated. Read on to learn how data and insights gathered during the consumer’s path to purchase can help you guide your customers through a more personalized and meaningful online buying experience. 

Retailing Everywhere 

The automotive shopping experience is evolving. While the end goal for the consumer remains the same – to buy a car that meets their needs and budget – the process by which they reach this decision is streamlining with better data and technology. In years past and till recently, a dealership website was used more for vehicle research, while the automobile leads were generated inside the dealership’s walls. Fast forward to present day, and new digital products and processes make it easier than ever for a shopper to purchase a vehicle without stepping inside a dealership showroom.  

Considering recent digital advancements, is there a way to bridge the online and in-store experiences that would benefit both the dealer and consumer? This brings us to Retailing Everywhere, a singular, multi-channel consumer retailing experience designed to drive profitable transactions and customer loyalty. Let’s look at the key components that make up this type of experience: 

  • Automated marketing and advertising 
  • Guided 1:1 consumer experience 
  • Advanced communication 
  • Deal connectivity across CRM and web 

When a consumer encounters a seamless digital experience, they stay on the website longer and go deeper into buying process. Keep reading to learn about innovations that support the Retailing Everywhere experience. 

Automated Marketing and Advertising 

Many consumers are spending less time on the road, for both professional and personal reasons. With more people staying home, what tools and tactics should you use to reach the right audience? If there is one thing most consumers are doing these days, and possibly more than a year ago, it is watching TV.  

Consumers are increasingly “cutting the cord” to cable programming in favor of Connected TV options, such as HULU and Netflix. This trend, combined with consistently positive performance in video advertising, has led to the expansion of our video advertising services on Connected TV channels. Placement is driven by the same data that powers Dealer.com display advertising, Facebook targeting, and other services. And since traditional TV does not offer the flexibility to target specific audiences, we can spend more effectively in this space. Robust reporting is available, so you know when and where your video ad is being shown, and to whom. 

Guided 1:1 Consumer Experience 

When a shopper lands on your Digital Storefront and begins to move through the site, either to view inventory or explore fixed ops deals from your automotive service marketing, the platform responds with a highly targeted, personalized experience. Our Experience Optimization product uses data from past shopping behavior to inform and customize experiences throughout the website. This includes slides, specials, banners, content. The goal is to introduce the most relevant offers and content to consumers on the first visit. 

Once the shopper has found the perfect vehicle, they will likely explore the digital retailing tools. Modeled after tax software, our brand-new Digital Retailing experience takes a complex process and breaks it down into small and simple steps. It’s a flexible, consumer-driven process, as shoppers can jump in and out of the pieces as needed to learn more about the deal. As a bonus, we’re finding people are using more of the tools and engaging more because it’s not a one-way street.  

Advanced communication 

The goal with shopper communication is to enable 1:1 conversation and offer a guided experience, and there are several ways to do this. Two examples include video chat and co-browse in Digital Retailing. Explore these services to see which ones would be the best fit for your Digital Storefront. 

Deal connectivity across CRM and Web 

Your dealership CRM plays an important role in moving the retail experience forward to a transaction. The reason is this platform provides visibility and understanding into consumer intent, and both of these inputs may be used by sales to deliver a personalized sales experience. 

With our latest offering, a deal can cross both your CRM and website, and it can originate in either space. Choose to review a deal in your CRM, and you’ll find a clean, simple view of the customer’s online deal activity that is accessed by a link. With CRM integration, leads fed directly into your CRM under one customer record update automatically every time the shopper changes their deal structure 

Driving interactions is essential in the Retailing Everywhere model. The technology you employ should support your activity instead of just replacing it, like talking across a table inside your showroom. The easier that information passes between the shopper and your dealership team, the better the shopping experience. Let our team help you to put the right message and interaction out to the consumer, regardless of where they are in the process.  

Data, Insights and Opportunities in the Age of Social Distancing

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By Charles Miller

The US is a diverse place, and as a result, we see diversity within Dealer.com data. While we’ve generalized our findings in this post, every dealership’s story about the impact of COVID-19 will be slightly different. You can apply our findings through the lens of your business and your market to help define your digital marketing strategies moving forward. 

Impacts of COVID-19  

Vehicle sales are down in the COVID-19 timeframe. At the time of writing, Cox Automotive is estimating more than a 60% decline in US vehicle sales compared to the beginning of March. We’ve been working to understand how consumer shopping behaviors are shifting, what this means to the automotive industry and most importantly, what dealers can do about it during this disruption. The data shows there are both short- and long-term opportunities. 

Weathering the Storm 

As we analyze the impact of COVID-19 on consumer shopping behavior, it has become clear that how we measured success yesterday is not how we should measure success today. Currently, we’re seeing about a 20% decline in website lead volumes, however this isn’t nearly as steep as the forecasted decline in sales.  The takeaway here is that consumers are still interested in purchasing vehicles, and they are simply deferring the purchase until later. The April 4th Cox Automotive COVID-19 Consumer Impact Study shows that 61% of consumers are Much Less Likely or Somewhat Less Likely to visit a dealership and 34% of consumers are now delaying the purchase of a vehicle.  

The all-important Cost-Per-Lead key performance indicator (KPI) has less business value today than it did yesterday. We need to shift our evaluation of performance upstream and focus more on brand awareness measures like Impressions and Reach, showing in the form of Website Visits and Vehicle Deals Pageviews (VDP). Dealers also should focus efforts on nurturing customer relationships online until consumer confidence returns.  

Consumers Are Getting More Social Online 

Consumers are going online more during this time, whether it’s to connect with friends and family, to binge watch TV shows, or even to shop for vehicles. OpenVault, which provides industry analytics for broadband operators, is reporting a 33% increase in broadband usage from January to April 3rd.  For automotive, we need to understand what this means in the way of consumer focus. Google and Bing, the kings of low funnel, high purchase-intent activity, are reporting 12-15% declines in Automotive related search terms as of late March. Dealer.com data indicates an 18% decline in Visits from forecasted values.  Meanwhile, social channels are reporting record highs.  Facebook, as one example, has seen more than a 50% increase messaging (group calls are up 70%) and is reporting new record highs for general usage almost daily.  

With this influx of traffic and subsequent ad inventory on Facebook, Dealer.com is seeing a 46% decline in CPMs (Cost per Thousand Impressions). Facebook Cost-per-VDP is down 8%. When you’re evaluating how to best target consumers with your brand awareness and COVID-19 relating messaging, take a strong look at social. Now is likely an ideal time to invest advertising dollars into channels like Facebook and YouTube. 

Another note on social channels: we need to start playing the long game. No matter what we say in an advertisement, some consumers will delay traveling to your dealership to purchase a vehicle, even if they were on the verge of purchase prior to the pandemic. However, social communication offers dealership staff the chance to engage with consumers and foster a relationship online.  These connections are more apt to secure that individual as a customer once the pandemic passes.  

  • Be as active and relevant as you can, providing videos of inventory and informing them on the actions your taking to ensure their safety.  
  • Engage with consumers directly. Train your sales staff to operate more effectively in this area or contract social management experts.  

To date, Dealer.com Social and Reputation Management services have created almost 6,000 COVID-19-related website pages and 1,000 advertising assets to help dealers inform consumers of the services being offered during this time.

Consumers want to learn about the actions you are taking to safeguard their health as well as what services you’re offering. We’ve seen up to 12% engagement rates with these COVID-19 Advertising assets. COVID-19 website pages have been viewed 156,000 times, and this metric is growing by the day. 

Your Digital Retailing Opportunity 

How many times have your customers asked when the automotive industry will allow 100% online virtual car sales?  With stay-at-home orders in place, now would be an ideal time to offer a solution like digital retailing to the market to generate more automobile leads.  Given the fact that many consumers can’t engage directly with sales staff at your dealership, they are starting to explore Digital Retailing tools.  Dealer.com has seen Digital Retail engagement rates grow by 25% since the beginning of March.  Despite a general decline in overall website leads, by the end of March we were seeing Digital Retailing Deal and Credit Applications up 13% compared to the end of February and setting all-time highs for the Dealer.com platform. 

As you plan your advertising strategy and how to communicate COVID-19 services your dealership is offering, now is the time to inform shoppers of the ability to Finance, Trade-In and Fully purchase a vehicle online. Educate shoppers on how to use these tools while social distancing brings them into focus.  Dealers who are effective at educating both their staff and their consumers will see this time as one that accelerates them toward a future where the purchasing, trade and finance processes are handled more efficiently online. 

While the nation’s experts are working to understand how long COVID-19 will stay in the headlines, we will continue to evaluate its affects and provide recommendations as  more data becomes available. 

Reference: Open Vault 

Be Present: Leverage Digital When Consumer Behavior Changes

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By Mark Bernstein and Ben Gilbert

As shoppers follow public health guidelines and practice social distancing, local automotive businesses are experiencing a noticeable shift in consumer behavior.  More are turning to online search and news for answers to their questions and solutions to their needs, resulting in increased search volume and media consumption.  However, as people are putting their basic needs first, less automotive search and advertising-driven traffic will occur.  What steps should dealerships consider?

  • Adapt digital strategy and creative messaging.
  • Align personalized experiences with customer expectations.
  • Advertise to stay top of mind and reach local consumers.

Consumers are more locally focused than ever. They may be more hesitant to convert from shopper to buyer, but that doesn’t stop them from shopping.  Sharing the status of your dealership and new procedures can leave a lasting positive impression.  Being present will help your customers keep your dealership top of mind when they are ready to shift from shopper to buyer.

 The time is now to refocus your marketing needs. Where can you start?

Prioritize your marketing needs

“What’s the best use of my advertising budget?” You need to ensure you’re capturing your most qualified shoppers and helping customers obtain the information they need. With budgets in flux, it is important to adhere to your advertising hierarchy of needs to maximize performance. Fund strategies that will maximize your retargeting efforts, targeting in-market shopping audiences on Facebook, video messaging to the right audience and most importantly top converting keywords on Search.

Create relevant messaging to your customers

While every dealerships situation will be unique, it’s important to remain present for your qualified consumers. It’s imperative that all your digital touchpoints, from ads, posts, website and all communications are consistent and reflect the same message and offers. Does your current messaging reflect your dealership status or OEM revised incentives?Are there differentials you can broadcast to help shoppers identify you can meet their needs, both from new vehicle shopping and service?

Know your Customers 

The data on a dealer’s existing customer is one of the most valuable assets a dealership has, and now is the time to really leverage it.  Segment target customers into different audiences and target across the media universe with a clearly defined ROI goal.  These steps help dealers avoid spending advertising dollars on customers who are not in your market.  For customers now choosing to delay making a long-term investment like a new vehicle purchase, can they instead become new service customers?

Be measurable

It’s time to ask some hard questions about how exactly your media spend influences your customer base.  How are all your media channels – including traditional – impacting your business? Can you measure them all using the same methods to compare efficiency and ROI from each media type?  Excellent digital alternatives to print and TV exist now and are 100% measurable. This is not the time for broad media sources with ambiguous ROI. Do you have access to a multi-channel, diverse product to confidently move advertising funds into relevant digital properties?

Be Agile

We are in a rapidly changing situation with state, federal and OEM interventions. Shoppers are increasingly digitally focused across multiple media types.  To come out ahead, you need an unparalleled solution that enables you to try new channels and deliver the message of your unique differentiators – car delivery, service valet pickup, OEM Incentives, and more.

We are committed to our dealers.  Our A-team of performance managers, industry leaders, and digital marketing experts are ready to help you showcase your vehicles and dealership services to shoppers at all stages of the consumer journey.

Dealertrack and the Evolution of Digital Retailing

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Earlier this month, Cheryl Miller, Senior Vice President and General Manager of Dealertrack F&I and Titling Solutions, participated in a keynote panel at the Consumer Banking Association’s CBA Live 2019 conference. The topic was Digital Retailing Evolution: What’s NOW & What’s Next, and Cheryl shared her expertise on digital retailing in the automotive industry and how the technology is bringing lenders and dealers together.

Following are some of the subjects Cheryl addressed during the panel.

How has digital retailing evolved over the past year and where do you see it going over the next 2-3 years?

The trend is toward an end-to-end digital experience that gives car buyers the flexibility to do as much or as little of the deal online as they prefer. This opens up new worlds for dealers when it comes to buyer targeting throughout the customer lifecycle, including advertising, purchasing, servicing and financing.

For dealers and lenders alike, it’s driven by customer demand. The way consumers purchase things has changed, and customers want the car buying process to incorporate conveniences such as shopping online. Our research shows 83 percent of customers prefer to do at least one purchase step online outside of the dealership. Using a digital retailing solution can help deliver a better customer experience that’s in line with what buyers want.

This is not the only way dealers benefit from digital retailing. The traditional retail sales process takes 3 or more hours for the average dealership to complete. Completing steps of a deal online saves an average of 30 minutes. A more efficient process gets deals completed more quickly, which gives a dealership more time to serve more customers. Digital retailing solutions better connect the online to in-store shopping experience due to streamlined processes, less data re-entry and increased accuracy.

The market is growing, in large part due to demographics. By 2020, Millennials (consumers in their early twenties to late thirties) are forecast to represent 40% of car buyers. There are more than 75 million members of this tech-savvy generation, and they’re at the forefront of demand for digital retailing experiences. Eventually we expect to see the 100% digital deal where every facet is handled online. Most of today’s customers still prefer to finalize their purchase at the dealership, but each successive generation will be more comfortable with ordering a car online the way they order merchandise from Amazon.

How are dealers and lenders working together to succeed with digital retailing solutions?

Dealers see digital retailing as an opportunity to connect the online experience to the in-store experience, and ultimately as a way to increase revenue. Our 2018 Cox Automotive Lender Study revealed that 51% of dealers say it is important for lenders to offer digital contracting to complement their digital retailing workflow. Dealers select their lender pool based on rate competitiveness, turnaround time for credit application decisions, and the strength of their relationship with their finance partners. Being able to work with lenders via the same platform they use for other digital retailing functions strongly meets two of those criteria.

Dealers today suffer from margin compression, so they are constantly looking for ways to profitably structure their deals with their lender partners. Lenders should strive to bridge the gap so that dealers understand you are there as a partner and what you can bring to the table to assist on margin compression and the deal structure – at the right rate for profitability. We see that most dealers are looking for qualified customers who meet their lender requirements. Dealers are a critical part of the retail experience, often finding the best financing available with valuable incentives for their customers. We offer solutions to both dealers and lenders that are well positioned to offer consumers choices that lead to a frictionless car-buying experience.

Dealertrack and all our Cox Automotive solutions are fully committed to our vision to digitize the process to procure a vehicle “from contact to contract.” We understand dealers and lenders both play key roles in every vehicle sale that involves financing. A well-planned digital retailing solution gives both of them tools that work together seamlessly.

With 85% of all new cars sold needing to be financed, dealers and lenders do play well together. The dealer works with the lender and for them – as well as for the consumer. The dealer provides the lender an opportunity in the form of a sourced lead, the lender is retained, and they work together to sell cars, to the benefit of both organizations. Partnership here is instrumental between dealers and lenders.

Do lenders need to upgrade to digital retailing tools now or can they wait for the industry to mature?

The answer is “now.” The time for waiting is over because dealers are already engaged in some form of digital retailing – many dealers already use their website for leads, digital media/social strategies, and more. Digital retailing enables dealers to capture more opportunities. Thus, now is the time for lenders to act if you are trying to increase your partnerships with dealers and gain market share and grow originations.

The technology is in demand by dealers. Customers are demanding better service orientation and a solution more akin to other shopping experiences, like the way they buy coffee and shop for groceries and other household goods. It makes sense for lenders to put digital retailing tools in place now, even if there are certain functionalities and features that won’t be fully utilized until the industry matures further. Be ready for what is here now, and it will simply continue to grow. Be ready so you can win in the marketplace.

Digital Retailing: Key Trends to Watch and Actions Dealers Can Take

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Dealer.com Digital Retailing

The car-buying experience is in need of change and the process length is just the beginning, according to the findings in the 2018 Cox Automotive Car Buyer Journey Study. In fact, less than half (46 percent) of vehicle buyers were satisfied with how long the process took at the dealerships, the study showed.

Fortunately, new innovations in digital retailing are changing the car-buying journey. Dealers can now shorten the process with a secure and integrated digital retailing experience through their website – one that offers consumers a simpler and more modern online to in-store experience. Additionally, emerging digital retailing tools help guide shoppers through every stage of the deal more efficiently and effectively than ever before. What’s more, new data is showing that this higher-quality consumer engagement correlates to more qualified leads, accelerated sales, and higher profits.

This innovation couldn’t come at a better time, given the market outlook in 2019. With volatility and continued margin compression predicted, dealership operational efficiencies are more important than ever. Fortunately, dealers can leverage digital retailing to create more business efficiency. Based on these trends and challenges, and my conversations with dealers across the country, here are three elements of digital retailing that I believe dealers should emphasize in the months ahead.

Make the Process easy for the customer, and you’ll reap the benefits.

Consumers spend more time than ever researching vehicles prior to stepping foot on a dealer’s lot. Some use up to 21 different touchpoints during their research, which can leave them unable to find the information they are most interested in – vehicle details, credit application, and trade-in valuation.The best digital retailing solutions are the ones that help consumers save time on their online research, leveraging the dealership for vital information and allowing dealers to insert themselves into the consumer’s process. Dealerships that provide information in a clear, all in one easy-to-use workflow generate more quality sales leads.Dealers have a distinct advantage in closing sales and increasing profits through digital retailing as they can offer consumers deal term information prior to them visiting the dealership, sell F&I products for higher revenue per car online, and utilize management tools that allow them to control the online deal structure so that it is consistent with in-store operations. However, dealers need to be wary of disruptors, specifically OEM companies, that have also started their own investments in the digital retailing space.

Personalize the journey for every car-shopper

Not every customer wants the same digital retailing experience. Dealers should let the customer determine how much of the process they want to complete online. The key is to personalize the experience for each customer.Fortunately, new advances in personalization and online deal communication make this much easier. With Dealer.com’s new website platform, dealers can merchandise inventory and specials tailored to each individual shopper, automatically, based their unique online shopping behavior. And with Cox Automotive Digital Retailing, consumers can input information about the type of car they’re looking for, their potential trade-in, their financing needs, and even share their contact information to create a more detailed sales profile. Every step is tailored and driven by the shopper. For dealers, this user-provided information does not just serve as just qualified leads. They are valuable bits of information that should be leveraged in future conversations at the dealership. The sales department does not have to ask these same questions again because they’re starting at a higher level of information with these automobile leads, and customers appreciate a more meaningful conversation and customized car-buying process.

Connect the data for one comprehensive view

So, how should dealers identify the best possible digital retailing solution for their business? More than 75 automotive companies offer some type of digital retailing tool. With all these solutions, there are 1.5 million vendor combinations a dealer can use. Of these offerings, dealers should seek out solutions with integrated technology.The Cox Automotive Digital Retailing solutions suite is comprehensive, so that dealerships don’t have to piece together programs from multiple vendors. Our tools integrate customer contact information from other Cox Automotive brands, including Autotrader and Kelley Blue Book. The goal should be for dealers to connect the data across all channels for one integrated view of a customer. We already established customers want a simpler process. Dealers can accommodate this wish by integrating all their digital retailing needs – and yours – in one system. When this happens, the customer and the dealer both win.

The time is now!

Digital retailing is generating a lot of buzz across the automotive space this year, with good reason. An effective digital retailing strategy can help you create the efficiency and profitability you’ll need to thrive in an ever-changing economy, all while delivering a personalized experience that today’s consumers increasingly demand. To learn more about key Digital Retailing trends in 2019, check out this webinar for additional insights and actions you can take this year.

Moving F&I Online

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Car buyer preferences are shifting toward more online research, and 83% of consumers today want to complete at least one automotive purchase activity online, according to the Cox Automotive 2017 Future of Digital Retail study.

As dealers move toward a digitized customer lifecycle that encompasses advertising, purchasing, servicing and financing, customers expect a seamless transition from online to in-store.

The F&I process is ripe for digitization. When customers have the option to begin to structure their deal online, their satisfaction increases, along with the dealership’s revenue and profits.

A recent Cox Automotive and PwC survey found that 63% of dealers saw the biggest ROI from digitizing their sales and F&I process.

Learn more about bringing F&I into the digital world in this F&I and Showroom article by Cheryl Miller, Vice President and General Manager of Dealertrack F&I Solutions.

The Consultative Approach to Selling

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by Mo Zahabi

While digital retailing in automotive is on the rise, dealership staff still play an important role in customers’ car-buying experiences. Six in 10 consumers would still want help from dealership staff even if they could purchase online, according to the Cox Automotive Future of Digital Retail Study.

But the roles of the salesperson and F&I manager have changed. In the past, dealership staff were only there to make money off a customer. Oftentimes, the customer knew more the vehicle than the salesperson. Today’s dealership staff, on the other hand, have responded to customer needs and shifted to a much more product-oriented approach. According to the same Digital Retail Study, today’s car buyers prefer staff who are product specialists – people who are highly knowledgeable about features and technology who will also act as consultants and listen to their needs in a low-pressure environment.

This consultative approach is particularly important in F&I, where consumers are critical of the traditional pitch, according to the 2015 Digital F&I Experience study. To connect with your customers – and make the sale – you have to take a more personal, friendly approach to F&I selling.

Empower Independent Learning

In the old approach to selling, there was a one-way flow of product information: the salesperson would tell the customer information as they sat in front of them. It was a belly-to-belly, in-your-face approach. But today’s consumers are hungry for resources that allow them to do their own research. 71% of car shoppers would prefer to do F&I research at home prior to purchase, and 63% say they would be more likely to purchase F&I products if they had the option to learn about them before finalizing their vehicle purchase, according to the Cox Automotive Maintenance & Repair Study.

Consider offering F&I product information on your dealership website, and also give your customers opportunities to do their own research once they are in your store. Mobile menu selling solutions, like Dealertrack’s eMenu for iPad®, enable independent customer learning. These technologies allow you to load a tablet with key F&I product and payment info, giving customers the opportunity to digitally explore your F&I offerings on their own – and better understand the value of F&I products.

Sit Shoulder to Shoulder

Most people use the phrase “shoulder-to-shoulder selling” figuratively, and that imagery is important when thinking about your approach. Customers need to know you’re not selling at them, but consulting with them. But the literal sense of the phrase is important too.

Literally sitting shoulder to shoulder with your customer as you review F&I product information can change the entire mood of the presentation. Without the physical barrier of the desk, the “me vs. you” mentality that can leave customers feeling intimidated in the F&I office is removed. Consider implementing menu selling technology that is specifically developed for tablets like Dealertrack’s eMenu for iPad®, which enables you to sit shoulder-to-shoulder with your customers – figuratively and literally.

Leverage Your Network

Today’s customers know there are many options for everything they can buy, and they want to know that they’re getting the best option available. Make sure you’re familiar with the network of aftermarket providers powering your dealership’s F&I selling solution, and don’t be afraid to explain to your customers where your product offerings are coming from. They’ll appreciate the transparency, and an increased understanding of how the process works certainly won’t hurt your chances of making a sale.

A version of this post originally appeared in Digital Dealer.

Watch this video to learn more about how Dealertrack’s eMenu for iPad can help you implement a more consultative approach to F&I selling.

Mo Zahabi is the Senior Director of Product Consulting at VinSolutions and Dealertrack F&I, where he educates dealers on best practices and ensures their offerings exceed industry expectations. Mo has applied his strong foundation in technology-based applications to the automotive industry for the last 18 years. Prior to joining VinSolutions in 2008, Mo was a respected Internet Director and eCommerce Director for two different automotive groups.

Fight Back Against Margin Compression

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Margin compression is taking a toll on the auto retail industry. Dealerships across the country are reporting slimming margins, with some even experiencing negative overall gross profits. And the problem isn’t going away anytime soon. Yet no matter the cause, dealerships can either choose to ignore margin compression and continue business as usual. Or, they can choose to fight back, finding ways to outsmart and outmaneuver margin compression with a few tricks of their own.

Finding Better Ways to Do Business

The secret to fighting margin compression is to find alternative ways of generating profit. And dealerships must think outside the box of the traditional sell-more-cars-to-make-more-money approach to business to recoup their missing margins. In general, dealerships can focus on seven specific practices to fight margin compression.

  1. Fixed Operations – When other sources of revenue run dry, service lanes offer a steady stream of customers and renewable income. By placing a strong emphasis on customer service and retention, and doing a better job of creating awareness of their offerings, dealerships can win back customers that have left for the convenience of corner quick lube shops.
  2. F&I Sales – A dealership’s F&I office is where retention is built and future relationships with customers secured. Plus, dealerships retain a larger percentage of each dollar generated through the sale of prepaid maintenance plans and other services than through the sale of cars.
  3. Process Improvements – Through cost and expense control and other business improvements, dealers can sell cars more efficiently to recoup profits lost to margin compression.
  4. Holding Cost Expenses – Time is money for dealerships. The longer a car stays on the lot, the more money it costs a dealership. By removing inefficiencies in the vehicle reconditioning costs, dealerships can improve profit margins.
  5. Employee Training – By maintaining close interaction with employees, and conducting better, more thorough training, dealerships can correct costly mistakes caused by human error and sell cars closer to MSRP.
  6. Digital Retailing – In today’s environment, it’s become almost necessary to move at least part of the car-buying experience online. The shift to digital retail allows customers to do a lot of front-end work in the car-buying process, saving dealerships time and money.
  7. New Technology – Implementing a modern dealer management system can reduce dealership waste and increase profit by streamlining operations. And a modern DMS that provides real-time data allows a dealership to scrutinize each deal and track margins over time.

Margin compression isn’t going away. But by focusing on alternative ways to recover missing profits, dealerships can avoid the negative effects of margin compression and continue to grow their businesses. If you’d like to learn more about how dealerships are fighting back against margin compression, download our free guide, 7 Solutions to Margin Compression, Strategies for Preserving Dealership Profit Margin.

5 Ways Digital Retailing Can Future Proof Your Business

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Dealer.com Digital Retailing iPad

The car dealership industry has experienced profound change over the past two decades. We’ve seen market growth, plateaus, and declines. In addition, shrinking margins and market disruption as a result of new technologies like digital retailing that are changing the car-buying, car-owning, and car-selling process altogether.

The change is ubiquitous. From the largest auto groups in the country, to single-point franchise dealerships, to independent used car businesses, the auto retail industry is rapidly evolving to harness the power of these new technologies and the operational philosophies they present. So, regardless of your dealership’s size or goals, now is the time to update your business strategies and get out in front of the changes in our market so you can keep generating automobile leads. Here are five suggestions on how to begin:

1. Work deals, not leads.

Our consumers are changing. Many in-market shoppers prefer to shop in the shadows, doing their research and then showing up in the dealership on their own terms, thus replacing the traditional lead form submission.

Encourage these shoppers to come out of the shadows by offering them convenient solutions and in-store process changes that will save them time and elevate the car-buying experience.

2. Move past “Desking” to meeting guests where they are in the buying process.

Try this exercise. Sit in your showroom and watch what happens when your sales consultants leave their guests to go to ‘the desk.’ Watch. See your guests take out their phones? They’re going back into the research phase to try and answer whether this is the right car, deal, or dealership to buy from. Watch them text a friend or relative who “knows a guy” in car sales to check the info that you gave them.

Leaving and going to the desk erodes trust, and from an operational efficiency standpoint, you’re most likely not getting enough value to balance out that risk.

A connected showroom experience, on the other hand, allows your guests to self-pencil and make their own car-buying decision, bringing together lenders, electronic menus, and even electronic contracting.

3. Seamlessly introduce shoppers to protection products.

As we make car buying convenient and even fun, we’re not going to do that at the expense of the profit margins that fuel our business, pay our team members, and fund investment in facilities and marketing.

Successful retailers that use Digital Retailing see an average increase in F&I profitability by allowing buyers to explore products and then serve additional information to them in a helpful, non-intimidating, and speedy way. By design, this contrasts the traditional F&I grind that featured hours of waiting in the dealership that only puts buyers on edge.

A preview of protection products online followed by electronic surveys and informational videos allow you to capture what’s important to buyers, and enables you to have invaluable micro conversations, rather than an hour-long slog over topics that don’t match your buyers’ wants or needs.

4. Create an efficient operation.

As the car-buying market continues to level off, which, as mentioned above, hurts margins, Digital Retailing will free up your human capital to focus on what matters most: cultivating relationships and selling cars, versus consuming large amounts of time desking and financing deals.

Your F&I Manager isn’t driving up PNVR when they are manually typing in credit apps. Your desk manager isn’t maximizing his or her impact on sales and gross when making simple calculations. Your sales consultants aren’t getting to the root of customers’ wants and needs when they’re making your guests wait.

To have an efficient operation means to focus the majority of your team’s efforts on the parts of their jobs that have the largest contribution to sales and profitability.

 5. Make your dealership a more fun place to work.

If you survey your team and your buyers about the most stressful parts of car buying, you’re likely to find consistent results. But car buying and selling can be such an emotionally positive experience: hearing customers’ personal stories, cultivating new relationships, test drives, showing guests how that one particular color looks in-person, seeing their response, and witnessing them decide to say yes. It’s compelling stuff!

As Digital Retailing can have a positive impact on your business, it can also help your team feel empowered, while knowing that they have helped car buyers transact with more convenience than ever. And empowered team members that experience an enriching and fun work environment are team members that’ll stick around.

Automotive retail will always remain an evolving industry. But with technologies like Digital Retailing available, you can give your business the tools necessary not only to survive in the current car-selling landscape but to thrive as auto retail accelerates into the future.