CallSource^® Aim Higher

“Upgrading to Dealer 2.0”

by David Greene, January 12 2010

If your dealership is marketing and selling to a Web 2.0 world but still using a Dealer 1.0 operating system - it might be time to consider an upgrade. An "operating system" is the program that once installed on your computer, manages every other program on the computer. If you think about it, your dealership has an operating system as well. You might not have noticed if you were working with an outdated system in the past, but the challenges of the current market have made it clear which dealers have made the upgrade to Dealer 2.0 and which haven't.

Based on our work with dealerships that are fighting to maintain and grow market share in a brutally competitive retail environment, there has been a shift in focus from simple cost cutting to significantly improving the efficiency and effectiveness of the retail operating system. They can literally do more with less. The upgrade formula is pretty simple. Fewer resources (opportunities to do business) x increased efficiencies (improved selling system) = competitive advantage and greater market share.

The best news is that it doesn't cost much to upgrade your operating system - only the ability to embrace change, see new opportunities, and be the driving force that combines sales enabling technologies with people and potential.

Here are 5 key application upgrades you'll see in a Dealer 2.0 operating system:

• In Dealer 1.0 we relied heavily on expensive display advertising, the primary strategy behind which was to have a lower price in a larger type font than our competition. That way, when our prospective customers responded to the ad we could do everything possible to avoid talking about price and really sell the value of taking action TODAY!

Unfortunately this often leads us back to price, framed within the ancient question "If I could... (insert whatever prospect has just asked about or requested here) ...would you (insert anything to the effect of buy a car TODAY here)?"

In Dealer 2.0 we have developed a customer communication strategy that enables our sales and service team to deliver a unique selling proposition at every customer touch point in the dealership. The manufacturer of your vehicle franchise markets the benefits of owning your vehicle brand - the dealership markets the benefits of doing business with the dealership. In the information age we don't so much sell the prospect the vehicle as we sell the prospect the experience of making a good decision about where to get the vehicle.

• In Dealer 1.0 "be-back's don't come back" and the sole purpose of our existence as salespeople is to convince a walk-in prospect - better know as an UP - that today is the day, this is the car, and we are the place from which to purchase it.

With our upgrade to Dealer 2.0 we wisely realize that prospects might visit our website and several others before leaving and coming back to send us an email request for more information. Although our goal is still to sell a car today, building a selling system around that objective in a growing market of research intensive, choice conscious and Internet empowered super shoppers is not real effective. Why? Because the prospect is trying to make a decision that is best for them.

If our communication with them is really telling them that we are trying to get them to make a decision that is best for us and not them - we usually lose the sale whether it is today, tomorrow or next month.

In our upgraded selling system we have learned to expertly facilitate the prospects shopping experience and sell them on the fact that we are easy to do business with, we genuinely want to help them make a good decision and we can make it faster, better and easier to get the vehicle they want.

• Dealer 1.0 has very limited memory. We assume this is directly related to the programming mentioned earlier which holds that if there is no opportunity to do business today it follows that there is no opportunity to do business tomorrow, much less two months from now. As a result, after an un-sold UP leaves the dealership or our emails are not responded to, the prospect gets mentally deleted and we look for the next UP or inbound email lead.

Luckily in Dealer 2.0 we have developed a long memory and the concept of Prospect Relationship Management. We know that only a relatively small percentage of prospects - whether in the form of email leads or walk-in prospects - will be sale ready on the day that we see them. We need a follow-up plan that doesn't make dumb contacts - sending out an email or making a call to a prospect that essentially asks "Are you ready yet?" is a dumb contact because it adds no value. Instead we continue to market to prospects over a pro-longed period of time with value adding messages that keep us first in mind when they are in an active decision making mode.

• In Dealer 1.0 a sales process is typically a list of sales concepts listed from 1 to 10 and posted on a wall in a place that is alternatively referred to as "the training room" or "the break room". In theory this list identifies "the steps of the sale", it usually begins with the meet and greet and concludes with the close. This list is seldom if ever representative of what sales people actually do, but it makes everyone feel like there is a sales process in place, which everyone knows is something you're supposed to have - plus it lets sales management get back to being "desk men" instead of process coaches which requires skills they haven't upgraded to yet.

Dealer 2.0 is all about being efficient and effective and neither can be achieved without a well designed sales process. We define a "sales process" as a communications strategy combined with a series of sales activities that occur in a pre-determined sequence, with each activity adding greater value to the next and resulting in the highest percentage of sales results possible. It's measurable, manageable and we use it with every opportunity to do business. In Dealer 2.0 a sales manager is not a "desk man" but an individual whose responsibilities include helping the sales team to follow the sales process and coaching them on how to achieve peak performance.

• In Dealer 1.0 we only want to talk about price in all of our traditional advertising to prospective vehicle buyers. When we actually get to talk to a prospective vehicle buyer, we rigidly avoid discussing price until they're landed on a specific vehicle and ready to buy TODAY. This helps to maintain a high level of mutual distrust between seller and buyer and ensures that sales managers are able to retain their roles as "desk men" while sitting in a "tower" overlooking the showroom floor.

With Dealer 2.0 we have gotten over our phobia of price and no longer equate it with a license to shop - mostly because we have figured out that our Web 2.0 prospect is all about research and shopping, it's what they will do. When they ask us about price they are usually really asking us "Are you easy to do business with?" The answer to this is an important part of who they eventually choose to do business with. Knowing this we have formulated a pricing philosophy that enables us to answer pricing questions in a way that builds customer trust while retaining average gross profits equal to or better than we did in Dealer 1.0

In making the upgrade to Dealer 2.0 you'll find that most of your dealerships sales enabling technologies - the applications you purchased hoping they would provide you with a competitive advantage and increased productivity - will run faster and be much more effective. You'll also find that while you may have fewer sales opportunities than in past years with your upgrade, you'll be ready to convert a much higher percentage of current opportunity into sales today.

If you feel we might be able to provide answers to any questions on your current upgrade initiatives, please let us know.

David Greene, e-Pro Automotive Group
Contact information: david@eproautomotive.com Cell (408) 569-3499
David Greene brings a sterling reputation as one of the automotive industry's most progressive and effective performance and training professionals. Greene has been in the automotive industry since 1980 and has worked in all aspects of retail sales management. Prior to founding e-Pro Automotive Group, David was EVP of Sales & Service for Reply! An online marketing services firm. David also served as Vice-President of Dealer Network Operations for Autoweb.com, one of the first publicly traded on-line auto buying services. He had overall responsibility for dealer network development, dealer training and consulting services, customer care and account management.