Archive for the ‘Selling’ Category

The art of the 60-minute deal – Part 2

It’s a trend that auto dealers nationwide are trying to follow – the art of the 60-minute transaction.

In part one of this two-part report, we explored how the need for speed is affecting the way dealers do business.

According to recent article in Automotive News, today’s shopper doesn’t have time for the more traditional four- to five-hour process at the dealership to purchase a vehicle. Studies have shown that the more time customers wait, the less likely they are to give dealerships high marks for customer satisfaction.

But can car buying be done in 60 minutes?

“I have strong feelings that 60 minutes is doable,” says Karl Schmidt of Morrie’s Automotive. “But there are several obstacles, some within the dealership’s control.”

According to dealers, the three areas of a transaction that waste the most time are data intake, price negotiation and F&I.

car sale1. Data intake

Part of the data intake problem may stem from a dealership’s software. Most dealerships will have several different vendors handling desking tools, inventory, and financial applications, none of which are communicating with the others. This causes the same data to be entered multiple times.

Tick, tock. Tick, tock.

2. Price Negotiations

One way to save time on negotiating is to offer the best price up front. Some stores have eliminated price haggling altogether, offering one price for their vehicles.

“Bargaining over price can eat up an hour in many stores,” says Brian Briscoe, general manager of Schomp BMW.

By eliminating the need for negotiation, Briscoe says, his stores consistently complete transactions within the hour and reap the benefits of repeat business and customer referrals because of it.

3. F&I

It seems that the wait is most unbearable when the end is near, and, of course, that is where the F&I delay comes in. During busy times, dealerships say that’s where their customers spend the most time in limbo.

The answer may be as simple as adding another F&I person to the team.

Schomp BMW enlists its salespeople to help in the F&I process. This keeps the customer engaged, keeps data entry yet again and, you guessed it, saves time.

There’s no doubt that the 60-minute deal may be a daunting feat for many dealerships. The good news is there definitely is room for improvement. If customer satisfaction is the goal, a shorter sales cycle will have to be a consideration.

The art of the 60-minute deal – Part 1

car saleIn today’s society, the majority of us live in the fast lane. We buy speed passes for the amusement park and toll passes for the highway, all to save precious time. That’s why it should come as no surprise that dealerships nationwide are working on the art of the 60-minute deal.

In the first installment of our two-part report, we’ll talk a look at why auto sales experts see the need for the one-hour transaction.

According to a recent article in Automotive News, dealerships nationally are adopting a 60-minute time frame as the gold standard for transactions. The goal…to reduce customer wait times that can hurt profits and reduce customer satisfaction scores.

Sonic Automotive Inc., a dealer group that works with Santander Consumer USA to finance its customers, has made the 60-minute deal a part of its new customer experience.

“It should not take two hours or three hours to buy a car,” says Jeff Dyke, Sonic’s executive vice president of operations. “If I walk into any other retailer in this world other than [those] selling cars, I can walk in and buy a pair of shoes and leave.”

Why the urgency? A dealership’s satisfaction rating apparently depends on it. Today’s shoppers have been conditioned to expect the express lane option. A study by AutoTrader, an online vehicle locater, found that a customer’s satisfaction falls after he has waited 90 minutes for the deal to close.

Tony Rhoades, an executive director Gunn Automotive Group in San Antonio, says attitudes shift when customers transition from shopping to buying. So time management at the dealership plays a large role in customer satisfaction.

“Wasted time is the biggest obstacle to satisfying the customer,” says Rhoades.

What are the main areas that waste time in the dealership? We’ll look at the likely culprits in part two of the 60-minute deal.

 

Videos growing in importance to car shoppers, says J.D. Power survey

J.D. PowerHow important are videos to sales of new and used cars?

A study by J.D. Power research and consulting firm provides some insight that should be useful to the auto industry in general, although it focused on shopper satisfaction with third-party websites.

The “Third-Party Automotive Website Evaluation Study” conducted by J.D. Power in January asked for reviews of sites such as Edmunds.com, Cars.com and U.S. News Best Cars, but also learned about shopper behavior, including demand for videos that can help them make a decision.

“Vehicle shoppers who are able to access and use videos on third-party automotive websites during the shopping process are significantly more satisfied with their experience than are those who do not use video, 811 vs. 733, respectively, on a 1,000-point scale,” according to Power.

“Additionally, 48 percent of shoppers planning to purchase a vehicle during the next month say that videos are ‘very important’ in helping them make their purchase decision,” Power said. That was a significant increase over the 36 percent of shoppers giving that response just last year.

The survey results are based on evaluations from more than 3,300 shoppers who indicate they will be in the market for a new or used vehicle within the next 24 months.

Among other findings of the survey reported by Power:

– More than two-thirds (68 percent) of shoppers indicate that videos are important in their online vehicle shopping process.

– Videos become more important as shoppers get closer to purchasing a vehicle, with 35 percent of those within six months of purchase saying videos are “very important” versus 20 percent of shoppers whose purchase is six months or more away.

– Among shoppers who use videos to assist them in the vehicle shopping process, 28 percent say they want more videos that demonstrate specific features, while 26 percent say they want more videos that demonstrate vehicles in real-life use.

“As the Web continues to become more visual, in part as a result of increasing bandwidth and easily accessible Wi-Fi, consumers are expecting to access rich content through the use of videos,” said Arianne Walker, senior director, automotive media & marketing at J.D. Power. “That said, it’s important for third-party websites to maintain the valuable content they provide through still shots and text that allow consumers to access detailed information, and then continue to engage them with video as they get deeper into the shopping process.”

Walker suggested that “some vehicle features are more exciting to consumers and easier to illustrate with video, such as infotainment systems, vehicle handling and emerging technology.”

In the survey, Edmunds.com was rated highest by shoppers, scoring 786 points on a 1,000-point scale. Besides Edmunds.com, third-party websites ranking above average were Cars.com (783), U.S. News Best Cars (764), Kelley Blue Book (762), MSN Autos (761), Autobytel (756) and NADA guides (753). Shopper satisfaction with third-party automotive websites averaged 748 points.

More details of the survey are available online.

– Mark Macesich

Rare Dodge Challenger is available

Awesome and rare Dodge Challenger up for auction.Call it a rare find. Call it a newly discovered treasure. Call it an American icon. No matter what you call it, there’s no denying the fact that this 1970 Dodge Challenger T/A Coupe is special AND it’s available. That’s right, this marvel of machinery will be up for a Santander-sponsored auction next month, in Lane 6 at the Manheim Northstar Minnesota auction. This prestigious vehicle packs a 340 Six Pak engine 4-speed Hurst built exclusively by Chrysler for this model and only for 1970.

The car is a light green metallic color, and according to Mike Bruce, AVP of External Sales for Santander it “is the classic model that Dodge modeled the new Challenger after when they relaunched.”

The numbers are matching and to make it even better, it is one of only 2,399 that have ever been produced. This car is an absolute “barn find” and has not been registered since 1989.

“This thing is rare,” says Bruce. “In my 25 years in the business, this is the coolest car I’ve ever come across.” Bruce also commented on the possibility of finding a set of wheels such as this saying, “These kinds of vehicles don’t come around often. The fact that so few were made makes this car even more special.”

Santander is proud to put this historic car on the auction block and hopes that people appreciate seeing something so prestigious and unique. In today’s car market, you just don’t seem to find a vehicle like this that possibly jump started the trend on the modern-day sports car. Don’t pass up the opportunity to get your hands on a part of American automotive history when this 1970 Dodge Challenger T/A Coupe goes up for auction next month.

Dealers need to get on electronic expressway

Dealers need to get on electronic expressway

When most people think about auto marketing and advertising, television and print media generally come to mind.
But the Internet has opened an expressway for consumers, and that means it has opened a new route from the automobile industry, including dealers.
“The recent Automotive Buyer Influence Study found that 70 percent of car buyers used the Web as a research tool before making their purchase,” writes columnist Ben Richardson in “Content Marketing” online at the website, Business 2 Community (B2C).
In his column, “Checklist for Smart Content Marketing in the Automotive Industry,” Richardson notes that those buyers whose shopping habits are reflected in the study spent nearly 20 hours online doing research. Then he wonders, “If Web users are spending that much time browsing the Internet for car-related information, wouldn’t you want the majority of that time to be spent with your content? If so, it’s time to start developing a content strategy!”
It’s a good question with a response that echoes decisions made in other industries.
The automotive industry’s content strategy should leverage online opportunities, including video, appropriate social media profiles (including Facebook and Twitter), creative blogging and informative guides for consumers, according to the columnist.
Here are excerpts from Richardson’s column:
Video – “Because the automotive industry is so visually driven, your content marketing strategy should also have a big visual focus. You may not have [a big] budget to create an advertisement, but that doesn’t mean you can’t be creative.”
Social Platforms – “Social media platforms are proving to be even more popular for the automotive industry than video. While the automotive industry isn’t making any sales to speak of from their social media presence, they are generating excitement and product interest.”
Blogging & Guides – “Great blogs and lengthy, informative guides can be really useful tools in your content marketing arsenal. … Your blog (and overall content strategy) should focus more on valuable, car-related information.” But don’t “speak like a corporation.”
The significance of Richardson’s advice is underscored by comments from more than a year ago on Search Engine Watch by Frank Watson, CEO of Kangamurra Media:
"For all vehicle buyers, the Internet is undoubtedly the most heavily used and the most influential channel. Today, 71 percent of consumers use the Internet while shopping for new and used vehicles, more than double the usage of any other information source. [And] the majority of buyers said the Internet was the most influential source leading to their purchase decision.”

By: Mark Macesich

WORK RELEASE: Job Assurance Programs Create Greater Sales, Few Returns

by Laurie Giesen

Job assurance programs, which let customers “walk away” from cars they still owe on if they lose their jobs, are generating greater sales for car dealers, adding to the used-car pool. Consider Hyundai Motor USA, which is one of the biggest players to offer such a program. It reports significant gains in car sales as the result of its Hyundai AssurancePlus program. Specifically, after five months of offering the program at nearly 800 dealerships nationally, the number of cars returned through this program amounted to less than 15, Hyundai reports. Meanwhile, the company attributes a 10 percent sales gain to the program.

“This was more of a marketing program than an insurance program,” says Chris Hosford, a spokesperson for Fountain Valley, Calif.-based Hyundai, explaining that Hyundai never expected to see a lot of cars returned, but rather hoped to give car buyers a feeling of security so they would be more comfortable in making a purchase. “Our research before this program showed that job security was a major factor in most car buyers’ decisions. Even with today’s high unemployment rates, 90 percent of people who want a job have one. But even those people with jobs are often worried about the future of their jobs, and it is an understandable fear,” Hosford says.

Under the job assurance program, consumers can return any new Hyundai, leased or financed in 2009, if they unexpectedly lose their income within one year of the purchase date. Although there are numerous factors that go into car-buying decisions, company research estimates that 10 percent of Hyundai sales since February, when Hyundai announced the offering, came from people who would not have purchased a car without the assurance program, Hosford says. While Hyundai is the only major auto company in the United States allowing car buyers to return their purchases as part of a job assurance offering, Walkaway USA, a division of EFG Companies, and Hyundai’s partner in its assurance program, also offers a similar program through 100 independent car dealerships in the United States and has just recently begun marketing its offering to auto finance companies, according to Jeff Beaver, senior vice president of marketing for Walkaway USA.

The number of cars actually returned so far is small, says Beaver, who wouldn’t provide an exact number. And although Walkaway has only been offering the program in the United States for about one year, it is modeled after a similar offering in Canada that has been around for a decade. During those 10 years, car dealers have allowed consumers to walk away from $36 million in auto debt, Beaver says. He declines to say how many cars that involved.

In both the U.S. and Canada, the returned cars go back to the dealership where they were purchased. In most cases, the dealers choose to resell the cars directly, Beaver says. Experts in the remarket industry confirm they have not seen many cars coming from the job assurance programs. “I have not noticed any volume from these programs, nor have I heard of anyone else who has,” says Tom Kontos, chief economist for Carmel, Ind.-based ADESA. “It seems to be a nice marketing tool in that it gives auto buyers peace of mind knowing that they can return a car. But few actually appear to do so.” Kontos notes that Hyundai, as the only major auto company offering the feature nationwide, has only a 4 percent market share in the U.S. Even if a larger number of Hyundais were returned, it would not be as significant as when a larger auto company made the offering, he adds.