Dealers Can do ‘Unprecedented Change’

Dealers’ capacity to address an environment of ‘unprecedented change’ effectively was the central theme of a recent speech by Mann Island Finance Managing Director John Hughes at the Used Car NI Conference held in Belfast on June 19th.


Success in adapting to change is something Hughes believes will be crucial for dealers. The changes required will need to be led by a cultural shift to create a customer-centric, compliant and enjoyable buying experience for customers as John explains in summarising the key point of his latest industry speech.

Re-invention is Crucial

Reinventing the dealer car buying experience with an omni-channel model that can adapt to the customer’s preferred buying approach will be crucial for car dealers. Like other areas of retailing, the traditional model is under threat.

Embracing digital platforms is already critical, but simply having stock online will not be enough; the combination of online and offline experience has to be distinctive and enjoyable; easy and informative. Dealers must make themselves vital to creating a great buying experience for the customer. Get it right and customers will not just buy a car, they will ‘buy’ the experience and tell all their friends and online followers.

For many dealers, this willingness to embrace change must start from their own leadership teams and quickly move to collaboration with like-minded partners.

The Drivers of Change

As with many areas of retailing, car dealers are facing up to change from all angles:

  • Political and economic change – today, Brexit is an ever-present theme that will continue to resonate into the future
  • Environmental – moves to alternative fuelled vehicles and the impact on stocking with regard to fossil-fuel vehicles and the longer-term effect on aftersales
  • Regulatory – led right now by the FCA
  • Technical – the move to digitisation both directly in sales and indirectly in areas such as shift to ‘making tax digital’
  • Social – arguably the most important, as the way customers buy almost everything is being redefined, coupled with an awareness of their rights

Now, add to these changes across the supply and distribution chains, notably in the developments in remarketing and the emergence of online brokerages for car and finance sales and the future for the traditional dealer model is an increasingly challenging one.

Key Data Reinforces That Change is Inevitable

Change in car buying/usage is being driven by the customer and it starts online with 56% of car buying time spent online where their activity is often intense.

  • 71% of this time is spent researching car prices
  • 68% of customers find cars listed for sale
  • 64% compare different models
  • 63% find out what their current car is worth
  • 46% spend time locating a dealer

The way people are buying cars is changing and dealers recognise this will change their business model;

  • 92% think servicing & aftersales will increase in importance
  • 77% say they will have to diversify to survive
  • 77% say more customers will be buying cars with finance

These last points from dealers are encouraging, but what I would really like to see is something that says:

100% of dealers recognise that they must change the car buying experience

As much as anything else, it is the car dealer that the customer must ‘buy’ not just the car.

People Don’t Buy a Hammer and Nail…

People don’t buy a hammer and nail when they want to put a picture on a wall; they want an easy way of seeing that picture on the wall. If there is an easier way, then they will take it. Following this thought, consumers don’t necessarily want dealers, they want an easy way to buy a car; if an easier option exists, they will take it.

Dealers need to make themselves vital and an enjoyable prospect; they should aim to provide a ‘friction-free’ buying experience.

With potential car buyers doing most of the traditional car buying legwork online, they only undertake 2/3 dealer visits before making their purchase. Today’s dealer sees less traffic, but this traffic will invariably be in-market. Arguably, they are the dealers to lose!

Both the car and the experience must be attuned to the customer’s needs or the sale risks being lost. We must recognise that all the power rests with the customer.

Central to success in this regard is to shift from a focus on ‘closing’ the customer (this is yesterday’s thinking) to a mindset that is 110% built upon making it easier for the customer to make their own buying decision.

Every aspect of the buying experience; the dealer’s digital presence, showroom, parking, people, dealer facilities, processes, pricing (financing) and culture needs to be spot-on and specific, as far as possible, to that customer. These often overlooked elements all add value to the overall customer experience and paint a picture for the would-be car buyer. I have consciously not mentioned the car and its preparation, which naturally matters, but which arguably following their online research, the customer may know more about than the salesperson!

Overall, people buy from the people who are nice to them and who they believe they can trust, but many other triggers along the buying journey combine to create (or destroy) this all-important trust. Dealers must not overlook all the potential pot-holes in their customer’s journey that could see a sale lost.

It is Not All About the Tech

While technology is increasingly essential in the car buying process, people skills continue to be crucial in used car sales.

People and business culture shape every part of the car buying experience. The importance of recruiting, training, developing and retaining great talent cannot be underestimated. People and the messages they send out to would-be customers face-to-face and online in the words and tone used are a differentiator.

Great talent is not just about the direct team, recruiting the right businesses with which to collaborate should be seen as just as necessary. Despite what many car dealers may think; customers want a good deal, but this  does not mean price alone, the ‘deal’ they want is typically an all-encompassing one of car, service and good aftersales support into the future. It is so often the people they encounter that create or destroy the value they are seeking, the right people with the right skills and attitude matter.

Time to Take Action

So can dealers adapt to the unprecedented change we see around us? Yes, they can and it has to start with every dealer asking themselves three questions:

  1. Process – how easy are you to do business with? (online and in the showroom)
  2. Engagement – how does it feel for the customer?
  3. Culture – what is the culture of your business and is it consistent?

With an honest appraisal of these, dealers can start to re-map their future model and ensure that their service and cars are vital to potential used car buyers.

If our people can help you, then we welcome the opportunity to help dealers to make the changes that can lead to a brighter future – and yes, we aim to make this friction-free and enjoyable as well.

Call us on 0370 600 6668

Data sources

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