Are Online Sales Your Dealership's Last Chance For Success? (Service Drive Revolution)

Okay, so there's this article cnbc.com the gentleman's name is Michael Wayland, who wrote this article. The headline to this article is Coronavirus pushes auto dealers to embrace online Sales. Like Tesla and Carvana. Key points. US auto dealers have been slow to embrace online sales. However, the coronavirus is changing that. I don't agree with that. I don't think that you, that dealers have been slow. I mean, listen, you got in, in the U.S. i don't know when you have 18,000 dealers and in Canada you have 7,000 or something, maybe a little less. When you take 25,000 or whatever it is, you take that many dealers, you're going to have the losers and you're going to have the winners. But I think the average dealer across the country and you also have to think about the market they're in. Right? Like not all the markets want to buy online. So the market you're in is different. If you're in la, yeah, you're going to have more people online than if you're in Pocatello, Idaho. Right, Pocatello, Idaho. People come down and they're like, Jim, you know, what are you doing for F150s this month? And it's time for me to get a new one. So it's a little different. Once again, take a wide brush across everything. But for the most part, I think the dealers have embraced online sales. The thing that I think is consumers haven't necessarily braced it and that what we're really not talking about is how consumers trust for dealerships is the problem, not online sales. So I think he gets it wrong. Probably, probably not. A car guy riding this, I don't know.

You know, and it's, it's no different than when we talk about the service drive and creating digital sales. We. I sold a brake job today and I didn't even talk to the customer.

I sent him brag like that, just like, oh, I mean, come on. Sold a brake job today. Look at me.

Hold on. You.

You know how many people listening to this didn't sell a brake job? How inferior they're going to feel?

Well, no, it, I'm trying to illustrate a point here.

There's people at home quarantine. I can't celebrate job Jeremy.

Yes, you can.

No, I can't. There's Chris.

No, you can't. I can turn you into my shop management software, give you a login. You can build estimates, send them to customers. They can improve with the push of a button.

You don't have to busy trying to Write a book for kids that don't want it.

But my point is this. I think consumers, the car buying process is very interesting. So buying cars is a tangible asset that you want to touch and feel. Talking about STDs and you want to go experience it. So yes, you may want to do a lot of that purchasing up front, but you're still going to want to touch the asset. And I think one thing with service sales is the more that we can get out of the old drag the customer through the mud, talk about all the recommendations and all that BS and let the customer drive the sale digitally. I think that's going to drive and increase sales because that's what consumers want. Now what's going to happen is this, this is what with lockdown. What drives me crazy is my experience with my local Volkswagen dealer where I had a customer that wanted to buy the car. I had the car picked out, I had the stock number and they told me, no, we can't sell you a vehicle. That should have never happened. The other thing too, with the shutdown, why are restaurants absolutely shuttered? They could do something different to still drive revenue. So I think we have to look at this whether it's on demand online or in person, it's just a pillar to your success. You have to have a strong online buying process to allow consumers to buy from you no matter what product you're selling. And then you got to back that up with a nice, feel good, touch. The asset delivery when it's time to give the product to the customer.

Yeah, I think a lot of times there's this desire to make things simple. Right. We want like the magic pill and we want one word metaphor for things. But the truth of the matter is, is when you say Carvana and Tesla, it's different than, than car dealers in the sense that Tesla and Carvana are going direct to the consumer. Believe it or not, a lot of the more progressive dealers struggle because the manufacturers dictate their website. The website, company, what the website. Like literally if you have a Toyota dealership, you have to use the Toyota cookie cutter website with the company that they use. Most manufacturers are like that and so they control all of that. And so if you want to be progressive online, you still are held back by the manufacturer. So in some cases the dealers are holding back the, the manufacturer and in, in some cases, like this one, the manufacturers are holding back the dealerships. And like I had.

I was doing this speaking thing with, with this amazing guy from Google, Tony. Shout out Tony. He we're gonna have him on the show as soon as this thing lifts, because he was actually. He was actually gonna come on. And then right when all this happened, everything got canceled. But one of the things that he was explaining to me from Google's point of view is you kind of have three tiers online sales. You have the manufacturer and the advertising they do of pay per click, right? Then you have the dealers that have their agencies or they do it in house or whatever. And then you have the aftermarkets doing it also in the independence. And so you kind of have these three layers, and none of them are coordinating. The manufacturer is sending leads to the dealers, but they're not coordinating the message. And just think, like, if you have different messages, different agendas out there, you're not really, really using the power and the spending power that you have on having one message and one, you know, one unified marketing plan. And so it's very. It's very.

Jointed.

It's absolutely fragmented in a lot of ways.

And I don't. It's not that the dealers don't want to be more progressive. It's that they. They're locked up by the manufacturers on what websites they can use. All that. I know when I was running Crevier, we were the second dealer in the country to do Google pay per click. And we used to think that we needed to redo our website every three to six months to have a new look. And then BMW comes in and says, no, the only website you can have is this one from these idiots in Atlanta or whatever that have a web hosting company. It's owned by Reynolds and Reynolds or something like that, then really are 10 years behind you guys in what you're doing online. But it's part of the, you know, the dealer. The dealer agreement. And that's how it has to be. So I think one thing that you're missing here, Mr. Wayland, in this article, is the fact that it's not that the dealers don't want to. It's the fact that the. The setup and the overall nature of the environment is unintentionally. I don't think the manufacturers intentionally are doing that because, like, you got 10 moron dealers that would have a terrible website and would do weird things and not, you know, not do it.

Right?

So they're trying to. They're trying to protect their brand, right? BMW is trying to protect their brand. And, yeah, I remember one thing that they said is the. We launched this new website and it was black. And they came back and they said, well, Only porn sites are black.

Oh, jeez.

Your website has to be white. And I was like, I never ever, never ever.

That would have been out of. That never. Never crossed my mind. Right, okay.

We're selling a lot of cars off of a black website that has nobody else but you've ever said that it, you know, was mistaken for porn, but whatever.

Well, I don't know. That's the thing this ties into. I think one of the questions today, which is, even though, and I agree with where he's going with the. The article and the fact that more dealers are turning on and they've always been doing that. They're just. When we bought my wife's Toyota RAV4, we contacted four different dealers. And yes, you're right, the websites looked the same. But it was after that initial contact that the fragmentation just completely blew it apart. And the way that they handled the online shopping experience was completely different from one dealer over to the next. So I think that the message is, no matter what business you're in, you've got to master your digital sales process and have it in a way that can funnel revenue to your business and master it. Like you said, you guys were early adopters at Crevier and you can still do that today.

Yeah. And I mean, I had a great team at Crevy, but the reason why we sold so many cars online back then is we looked at online sales as it away from the showroom experience. We thought, hey, if somebody goes online and they want to buy a car, they don't want to come into the showroom. So the first email, the attention to detail with a copy in the emails, the pictures we would send them, we were trying to sell them on. The idea of it was hassle free. We would bring the car to you to test drive if you wanted. But it wasn't away from the showroom experience. Even when we'd make an appointment, we'd say like, hey, you know, you're coming in. This isn't away from the showroom experience, so make sure you ask for me, that sort of thing. And the customers felt different. So our actually our grosses back then on online sales were higher than the floor. Which is a tribute to our manager, Sean. She was amazing in what. What they did. But it just proves the point that if you sell it away from the showroom experience and try to appreciate people's time and the way they're there, you're getting them and not treating everybody the same. Right. You can pick up some gross.

You guys were delivering exactly what the client want. You were delivering the buying experience how they wanted it. They were buying from you, not being sold. That's a huge difference. And we can do that in the service drive as well. We can create a process where the customer wants to take care of their car. They understand how long they're going to keep it. We customize a maintenance and repair plan, tailor fit for them and their car and we deliver it how you want it. If you want to have a phone call, I'll call you. You want me to text you? You want pictures, you want videos, you want a digital vehicle inspection? You want me to send you the estimate via email or text? I can do that. We're going to cater to you, Mr. Customer, and give you the exact experience that you want. It's all about matching your customer's preferred communication style, how they want to be communicated with. We have to deliver that. Whether you're 19 or 79. Everybody takes an information differently and you've got to be able to deliver across all platforms today.

Yeah, the other, the other two things he says on here. Online sales is one of the last chances for salvation for some dealers that have had to close their showrooms due to the pandemic, which is true. And J.D. powers expects U.S. retail sales to drop 80% this month.

Well, yeah, there's no question about that. Do you know how many customers are waiting to buy brand new cars right now? Like once things kind of lift, the floodgates are going to open. We're not ready for what's the activity that's out there. What's.

That's the note I wrote down, bro. They're not trading in their cards for tennis shoes.

No, they're not.

It's pent up.

It is. There's so much and it's only been what, four to five weeks. This activity that is sitting in this economy is massive and huge. So we can't rest on our laurels. That's why we're staying busy because we like to run.

The late great Bob Crevier used to say that he'd go, they're not trading in their cars for tennis shoes.

Did he have a cigar in his.

Hand when he did that or no? No, he was just. No, he didn't, he didn't smoke.

He.

But great. I mean one of the great car dealers and like loved the business. But he, he was all, always had an attention to detail for lease returns. He always wanted to know what our conversion was of people coming off the lease because he would say they're not trading in their cars for tennis shoes. Like where are they going? What are they buying? Why would they want a Mercedes? They're too young to buy a Mercedes.

You would say.

Oh, that's cool.

He was, he was great. But yeah, they're not trading in their cars for tennis shoes so it's bent up and the ones that aren't going to trade in are going to come in for service and we're going to get them. Thank you so much for watching this clip of Service Drive Revolution. Now you can catch the full episode on YouTube, iTunes or Spotify or wherever you consume your podcast. If you have any questions, go ahead and post them in the comments below. Make sure you subscribe and hit the bell icon so you're notified when we post new episodes. I'm Chris Collins and you can find me on Facebook and Instagram at Chris Bulldog Collins and I'll see you again on the next episode.