Are we done selling?

What have we learned about the dealership’s role in the customers decision journey?

Over the last 20 months, we have gone through a transformation in every aspect of our lives. Termed “the virus that shut down the world,” Covid halted the global economy, with millions forced to change how they work, travel, eat, socialize, and so much more. With working from home becoming the norm, offices, and shops closing as part of containment measures, and travel severely curtailed everywhere, it was inevitable that the economy would suffer.

The good news is we have seen momentum towards recovery from our economy in recent months, but inflation, Covid variants, and supply chain issues continue to throw roadblocks in the way. Nevertheless, pent-up demand for consumer spending and business investment should help the global economy grow strongly in the year ahead—with The Conference Board currently projecting 3.9% global growth in 2022.

So what has changed in automotive that most likely won’t come back to the way it was as the market strengthens? The first answer is used vehicle valuations, which has been thoroughly discussed. So instead, I want to focus on what I hear from our dealer clients and industry insiders in this article. The great transformation they see is moving from a selling model to a consulting model in retail automotive regarding how we interact with our customers. We are also going from selling to asset management in the dealership operational model.

Let’s take the way we interact with our customers first. Car buyers are well educated and have researched thoroughly before you ever hear from them. Once they interact with a dealership, they look for guidance and insights, not a sales pitch rooted in a salesperson’s quota or a dealership’s turn objectives. If we continue to focus on the sale of the vehicle and put all our efforts into making that happen, we will miss more than we win, and we will slowly regress in CSI and dealership loyalty. We have to train, educate, equip and compensate our customers facing employees on the market, the industry, the vehicle, and how to consult and not preach or pitch to their customers.

The second transformation is how we operate at a dealership level. If we are still managing only sales objectives like volume, turn, front-end gross, and monthly salesperson quotas to rate performance, we won’t transform to win in the years to come. Our P&Ls are separated by business unit, but that doesn’t mean our behavior needs to be. Every business unit contributes to the overall health of the dealership, and every one of them should be profitable, even wholesale. Focus on building a culture where there is no front or back of the house, and every customer interaction focuses on asset allocation through selling, acquiring, servicing, or financing. All these activities are equally important, interconnected and should be rewarded and recognized equally. This type of transformation will be a crucial component of the winning formula moving forward. Simply put, and repeated, I know, we have to think differently.

Many industry partners are set up to help with best practices, customer-centric research, and digital dealer operations that meet the customer the way they desire. However, we must take ownership of creating a team of consultants around the entire lifecycle of the automobile. That responsibly rests on the rooftop leadership’s shoulders. You only have to think of EVs and the consultative approach needed in every aspect of the EV customer’s ownership experience to understand the urgency. That customer education and consulting will have to come from their dealership.

I expect to get some pushback on this, of course. I am suggesting a major operational paradigm shift in our industry. Some have already begun the transition. Many have not. Change is hard, and execution is even more challenging. The good news is there is plenty of evidence as to why this transformation needs to be in every strategy meeting moving forward, and you have a wealth of industry partners that can help you execute for success.

Wishing you a happy and prosperous 2022!