How To Sell Cars Online or Offline (PART 3)
TRANSCRIPT: Let’s start by talking about the best offline car-buying experience. We’re going to look at all three but we’ll go ahead and start with the best offline car-buying experience. This is not an option. It’s not an option to improve your current in-store process. See, improving the in-store experience is critical to gaining share, it’s critical to holding gross, and it’s critical to creating customers for life.
You saw the stat. Ninety-nine percent of people expect a hassle when they start the car-shopping process. One in 235 likes your current process. How many cars did you sell last month? Two hundred and thirty-five? Guess what? One person liked that process, if you’re an average dealer.
Every startup that’s out there is attacking you on the experience. in fact, the Carvana commercials, what do they say? They even say, “This doesn’t suck.” They’re implying that it sucks to buy from you. When we talk about an improved offline car-buying experience, a great experience offline, we’re only talking about two things. We’re talking about a shorted road to the sale and we’re talking about process transparency. Just implementing these make for a great experience. Think about the opposite. The five-hour road to the sale. That’s not a great experience. We need to shorten the road to the sale. No process transparency. That’s the opposite. That’s what we’re doing today. That’s where our sales rep leaves our customer at a table all by themselves while he goes to the desk. The customer doesn’t really know what’s going on. They have no idea why they’re waiting 45 minutes to get into F & I to give you their money. They’ve already bought the car in their mind, yet you’re making them wait. There’s no process transparency.
Again, if we can create a shortened road to the sale and we can add some process transparency, we can actually create a great offline buying experience. We’re going to make this happen through some assumptive selling and with some tools and processes that will move it along.
The first rule here to creating this great offline car-buying experience is you have to stop focusing on the negatives of a shortened road to the sale. I know what you’re thinking. “Steve, wait, but we’ve got these stats, right, that say we got to be three hours or we’ll never sell a car.” I’m telling you right now, the old-school data is irrelevant today. I’m embarrassed for those of you who continue to share it on LinkedIn. Today’s consumer wants 30 minutes to an hour. There a lot of dealers who are hitting it and are getting great, great CSI and they’re earning tremendous front and back grosses.
The reason that we need a shortened road to the sale is the buyer already has all the information. The Sonic-One Experience today, it’s one person, one price, one hour. “Yeah, but Steve. That’s Sonic. Nobody’s been able to make that last for very long.” Oh, really? I remember being in Schomp BMW over eight years ago. They were doing it. They were doing it and they’ve been doing it for over a decade. They’ve been earning great grosses both front and back and doing the whole deal in an hour or less. The Ken Garff Group has tested it and now they’ve taken their Garff-ese, under one hour with no F & I, they’re taking it to six stores. It is a reality. It’s happening today. It’s because of people like Carvana that we have to make it happen. Otherwise, people will go to 100% online. They won’t do it with us.
Why even work on this one? “Steve, why do we work on this when everybody’s online, right? Everybody hates the dealership experience, right?” Yes, but they still want to shop. This is what Carvana doesn’t understand. They are solving for the wrong pain point. This is how you can make them irrelevant. T-Rex wants to hunt.
DrivingSales said that 61% of buyers today make no contact with you before they arrive. That’s despite the ability to gather info via leads. They could pick up the phone and get more information. They could submit a lead and get more information. Surely, as online buying options like AutoFi grow, this numbers going to be reduced, the 61%. I understand that. As you start adding a true buy it now, a true express checkout to your website, this 61% is going to decrease. It really will but to what? Fifty-one percent of people will show up without any contact with you, 41%. Whatever it drops to in the next few years, the 100% in-store experience is still going to be critical for a very long time. That’s why we got to fix this.
Listen. Online buying is here. Online buying is here right now but even with all the available tools, Cox Automotive projects that just 10% of transactions could be done online by 2019. Dealer Rick Ricart, a guy who’s ahead of the curve on online buying, he estimate it today about 5% are going to do it. Of course, he says that’s going to grow. This doesn’t mean we wait. The tools are inexpensive. There’s no barriers to entry. You can do it without training a huge team. You can do it with just a couple of people.