Competing with Internet-based Dealers

The automotive industry from previous decades is almost unrecognizable from its current state. Fast-forward 50 years from now, and it will be unrecognizable again. In the late 90s, the internet age was a transition point for many dealers. Business thrived for those who adapted to the change. Today we are dealing with the next evolution: internet-based dealerships that are not brick-and-mortar. The customer experience they provide is vastly different than what we are accustomed to. We took this opportunity to shop and compare the processes for internet-based dealers as well as brick-and-mortar.

We submitted a request for a buy figure for a one-year low mileage-old domestic car. The two largest internet-based dealerships came back with instant fair market values. The same process was followed with the trade-in marketplace to compare the local dealerships. We were contacted by three major dealerships within an hour of attempting to set up an in-person appointment. All of them were told that we would like a value before an in-person visit. The response we got was consistent, saying, “We don’t do that.” Two BDC agents hung up the phone out of frustration and lack of objection-handling ability. All three dealerships proceeded to call several times a day, attempting to set an appointment. None of the dealerships used the CRM notes as they had no record of previous communications. The BDC agents all promised to have the used car manager follow up with us, but none of them ever returned the call. With current inventory shortages, dealers are going to the auction and battling each other to purchase cars, rather than working with customers. Even something as simple as a purchase off the curb is an opportunity to start a relationship with a future lifelong client.

The lack of follow-up is a significant issue within our industry. On several occasions during this comparison, management and BDC agents, who are alike, refuse to make the phone call the moment something does not go their way. It is hard to hold salespeople and phone agents accountable when management themselves does not follow through on commitments. Clients have very short attention spans, so when promises are not fulfilled, they will just move on. With the cost of customer acquisition so high, mistakes like this are much more costly than some people make them realize.

Customers dictate the way they want to be sold. We must be open to seeing this and adjusting to changes in the market. One price dealer proved that despite being unorthodox in their business model, a pain-free buying experience always wins. Coaching and training for all departments should not be something you do, but that is part of your routine. We have a saying within our agency: “Fights are not won in the ring; they are won in training camp.” Dealers must be ahead of the curve with training to be ready for the changes in the industry.