Dealers:  When The Crowd Moves On...

Last week I was at the latest AAISP / Digital Dealer conference in Las Vegas. 

Jim Ziegler, who did the keynote address told several great stories about how he now “gets the Internet.”  To me his most memorable story was:

“When he got in to Las Vegas, he went out to dinner at a restaurant.  On a previous trip it was the most popular place in town and he’d had a really exceptional experience.  This time, when he got there the place was almost empty.  The food was still exceptional, but it just wasn’t the same. 

What struck him was the analogy of how there is a lag in spending shift when the crowd moves on... and that it is happening right now in car dealerships.”

To Jim's point, I came across the graphic you'll see below on a website today. I thought if did a decent job showing how the consumer-buying public has moved on from traditional advertising channels, yet dealers continue to spend their money where consumers used to be.

How did these media’s influence wane?  Tivo, DVR’s and online videos are making TV ads irrelevant.  Satellite radio (which is commercial free) is sold by many dealerships and so ensures radio ads are heard by fewer and fewer consumers.  Newspaper readership is in a free fall.  Today, when consumers want to find information that they can trust, they overwhelmingly turn to the Internet.

However, that is not the true horror for most car dealers.  No, the true horror is that consumers are hiding on the Internet from dealer’s aggressive sales practices.  Whether true or perceived, it is how the great majority of consumers think.  They are tired of being called “up’s” or “lay downs” and are refusing to play by the “rules of the game” as set by many traditional dealers. 

Today’s consumers want a better experience and are not responding well to dealer attempts to “convert” internet efforts into phone and showroom activity.  They don't want to be converted.  They want a better experience.

The expressions I have developed to describe what is going on are as follows:

“If all you are doing is spending your money on traditional media, you are starting to hear crickets more and more in your showroom.

If you are building up your Internet department around tricking consumers to come in, you'll be hearing crickets soon enough.”

If you have been reading this weekly series, you will know the role shopping cart ecommerce plays in bringing the disenfranchised consumers back in to the fold by earning their trust, but it is more than that. 

Dealer’s websites today are NOT hubs of convenience for consumers.  They are flat billboards designed to serve dealers' needs.  Call or email?  You have got to be kidding!?!?!  Because you showed me a VIN decoder listing of standard equipment and a few photos!?!?!  I DON’T TRUST YOU!!!  AND DON’T TRY TO CONVINCE ME THAT YOU ARE GIVING ME A GREAT PRICE!?!?!?  UNTIL I TRUST YOU IT DOESN’T MATTER!

Yes, those last points are in caps because your consumers have been screaming them at you for years.  As an industry, we mostly have not been listening.  The lack of trust in the market has everything to do with what is wrong with the status quo.  Without trust, price is irrelevant.  Compounding the problem, dealers do not have enough gross profit in a vehicle to really make a difference by cutting price (on a $30,000 vehicle a decent gross profit before any expenses would be $1,500). 

Do you sense the disconnect between the conversation that the dealer wants to have and the one the consumer wants?

This is where the shopping cart has a role to play.  It is just a tool, but it restores trust.  Give consumers the whole deal, but require them to identify themselves in order to get it.  Once they do their part by validating their email address, continually earn their trust.  Follow up with those consumers that do not complete their deals in the shopping cart program to maximize total lift.  The response rates of these consumers are through the roof vs. any other "lead source" that you have, because you have now earned their trust.

Add shopping cart equivalent notions for service scheduling (TimeHighway) and the same thing for accessories (Insignia Group) if you would like examples.  Give your prospects + consumers a reason to do business with your website.  Market your website very aggressively. 

“Hey, did you know that we now have a shopping cart on our website?  All cars have our real selling prices, have an unconditional price guarantee, we’ll explain how interest rates, rebates and your trade in impact your purchase and the shopping cart will produce accurate monthly payments, all from the comfort of your own home or office.” 

Click here to go view our inventory and start shopping without pressure.

Send a notification to all of your customers and unsold prospects to that effect.  Do the same thing when your add service scheduling and an accessories shopping cart.

Embed a similar message into your autoresponder to point prospects to the shopping cart so that once you receive their lead, they submit no further third party leads.

Make your website a hub of convenience for your prospects and consumers. 

What’s the worst that could happen?

• They’ll buy stuff from you without coming in to your dealership?
• You’ll steal market share from your competitors who are less web savvy?
• You’ll fill your “virtual showroom” with conquest and repeat buyers who are refusing to deal with you through traditional channels?

Is there anyone out there who doesn’t want that?

As I wrote about in last week's management brief, Eric Schmidt the CEO of Google cautioned about betting against the Internet.  Since the conference this past week was in Las Vegas, I'll end with a gambling question:

When it comes to the future viability of your dealership, where are you betting your money, time and effort? 

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