September 2011, Auto Dealer Today - WebXclusive
Find solutions that provide an edge in a competitive marketplace
Businesses that embrace new technology hold the golden chalice, and those that don’t run the risk of being obsolete. In today’s fast-paced economy, speed is king. Transforming data into useful information is now an essential part of business. Predicting market shifts and creating proactive plans that identify business pain points is vital. A popular pastor, Bill Hybels, once said, “Visionary people face the same problems everyone else faces, but rather than get paralyzed by their problems, visionaries immediately commit themselves to finding a solution.”
As we all know, having access to quality inventory at the lowest possible cost is essential for profitability. Unfortunately, in the used car industry, that has become increasingly difficult. Prices have increased, and dealers are now looking to various technologies to help them analyze market trends to predict future profitability. With the decline in new car production over the last two years, the trickle-down effect of decreased availability of used cars in the marketplace is only natural.
Inventory has become too expensive, and making the wrong buying decision could be costly. With shrinking margins, dealerships are turning to third-party tools that provide useful business data that they can use to make better decisions. Analytical products like the Cross-Sell Report and the Manheim Market Report are being reviewed side-by-side to help dealers attain a 360-degree view of vehicle sales and costs across various geographic regions. This is just one example of how dealers are taking a potentially paralyzing problem and finding a solution that gives them an edge in an overly competitive marketplace.
Traditionally, dealers have worked on the premise of a face-to-face business model for selling and delivering inventory. For some consumers, the prospect of purchasing a car is not only a big decision, but they also see the process as overly stressful and burdensome. At some point, thanks to technology, I believe the entire selling process will be transformed. It will become the norm for people to make their vehicle purchases entirely online.
To understand why this may become a reality, you must first understand that the average person fears purchasing a new or used car. Consumers, both male and female, have one natural fear that seems to overshadow most: the fear of rejection. This emotion can be paralyzing, and it hinders us from doing the things we really want to do. By allowing your customers to hide behind their computers, you can relieve their fears and reduce anxiety, which will automatically put them at ease.
Many of these technologies that will transform the selling process are already available today. However, in the future, all of these technologies will be combined to create a seamless experience. Clients will simply choose the vehicle they want online, negotiate a price, and complete the credit applications and necessary paperwork. They will have their trade-ins analyzed online. They will receive their forms electronically, and they will subsequently be walked through the closing and signing process online. This closing process might be completed using pre-recorded video or with live video chat technology.
In the end, the vehicle will be delivered to the buyer’s home or work without the buyer ever stepping foot on the lot. As far as I know, eBay is the only successful online selling system for automobiles today. eBay has successfully demonstrated that consumers are perfectly willing to purchase cars online. I know that many of you will be very uncomfortable with this approach, but I think sites like eBay only further demonstrate the consumer’s desire to remove the anxiety from the sales process.
To be truly visionary, you must disconnect your mind from the traditional ways of the past and use what you’ve learned to anticipate market trends as they ebb and flow. Unfortunately, that’s easier said than done. There is a lot of noise surrounding this process. Good ideas are always around, but implementing the right ones at the right time is much trickier than you might think. If you start too early, there’s no market. If you start too late, you lose your edge. To be visionary, you must develop or implement products that can transcend industry and process.
Vol. 8, Issue 7