The new Stealership is in the Internet Department

[Alex Snyder]

http://carbuying.jalopnik.com/here-are-the-ways-dealerships-fail-at-internet-sales-1704439254#

What perception are you giving your customers?

 

[Chris Leslie]

That is a text book example of the Dunning-Kruger effect and it's strangle hold amongst GM's and Owners across the country.

The Dunning–Kruger effect is a cognitive bias wherein unskilled individuals suffer from illusory superiority, mistakenly assessing their ability to be much higher than is accurate. This bias is attributed to a metacognitive inability of the unskilled to recognize their ineptitude. Conversely, highly skilled individuals tend to underestimate their relative competence, erroneously assuming that tasks which are easy for them are also easy for others.[1]​

As David Dunning and Justin Kruger of Cornell University conclude: "The miscalibration of the incompetent stems from an error about the self, whereas the miscalibration of the highly competent stems from an error about others."[1]​

 

[Alex Snyder]

The Dunning-Kruger effect huh... going to have to file that one for later use

I just read through a good chunk of the comments in that Jalopnik post. My impression of the whole thing is that there are a lot of Internet sales people who are following the path of least resistance; cherry-picking the easy ones. And they're mostly unsupervised claiming the adage they're overworked with too many leads. However, an abundance of leads paired with a pay plan that is based on "leads that buy" doesn't require actually working hard. The work is more done in the CRM or ILM system to claim the lead was originally theirs as many lead-submitters still drive into the store regardless of the responses from the Internet department. There are a large number of Internet sales people using the numbers to be quite lazy; still making a decent paycheck. What's more scary is the number of GMs and Execs who have not realized this yet.

The impact is the consumer feels car dealers are way behind the times and still up to the same old tricks.

 

[Clay Toporski]

Sometimes, I wonder how carefully worded these surveys are: "A recent study said that 75% of car shoppers would prefer to complete their entire vehicle purchase online." Yet, isn't it something like 80% of people say they wouldn't buy a car without test driving it first. And, in the OP's link, they say that 50% of the people would be fine with a virtual test drive.... whatever that means.

I think it is obvious that dealers need to be transparent with price. Does anyone really think different in the year 2015? Of course, it seems that way based on the comments.

However, I still need to have my people get them into our store. I would love to be able to negotiate a price, get a trade-in value, work terms and finance/lease options over the phone - but it seems every time my staff does that, the customer isn't quite ready to visit yet to make the deal and when they finally get a hold of them a week later, the customer is overly thankful of how much time we took educating them so they could buy from their local dealer and get a great deal (which is basically the same deal we gave them, plus or minus a bit.)

So, I'm at a crossroads. How do I turn these 75% of customers into my deals right over the internet? I think this all smells like BS to me. It's nice to answer a survey in a vacuum. It's a complete other thing to actually be in the market for a car that costs $35k and be OK with making that purchase before ever driving it or something like it.

 

[Alex Snyder]

Good point Clay. I totally brushed past the 75% stat to land in the parts talking about the perception. I also found the grammatical errors difficult to read, but felt the overall message was worth sharing.

It was interesting, to me, to finally hear someone admit the front door of the dealership is online and we're still not doing a good job of meeting customer wants.

 

[Chris Leslie]

Clay, I totally get what you are saying. Being inside the dealership It's out of our character to overlook those instances. In a lot of cases it put a sour taste in our mouth for wanting to continue to do it.

I would also consider separating out the connection between Test Drives and Online Sales from causation to correlation. My thought on this is that I can go touch, feel and play with a bunch of electronics at best buy and then go and do a complete purchase online. I didn't buy said electronics because I poked at them at the store so It's not causation in this case. Test Drive's do not cause online car sales.

However I would argue that there is correlation. The idea of the more test drives, the more opportunities I can earn their online business. I know comparing a car to best buy are different. But, would you consider a test drive could be the same thing theoretically as poking at a tv screen at a best buy?

My personal opinion is that what you are doing by educating the most you can is by in large the best possible approach. You may not see immediate benefits and actually might see a loss here or there. But in the long run it's that approach that wins customers for life. The reality is, is that our customers can either get the information via 3rd party like this story or on cars.com and edmunds. Or they can get the truth first hand from our mouths.

We've seen many a industry live and die by the margins. I sat in meetings with high level newspaper executives in my previous career who would battle all day long with each other over why people would or wouldn't read news online. They argued over the fact that news online was not properly sourced and this and that. Luckily I saw that sinking ship coming from a mile away and to this day am positive there are a few of those people trying to squeeze another 0.5% margin out of something because they think ink and paper are going to come back.

Whether or not we choose to believe it our purchasing process is going digital. If we don't choose how we operate online and how we want to do business online. That choice is going to get made for us. Look at Cox Automotive's family of products and tell me that they aren't gearing up to go wholesale to consumer with a flick of a switch. That alone is enough to scare me to want to make tools that are easy to use and allow you to buy your time back.

To answer your question again. I think what we do is educate, inform and empower customers with the knowledge they need to have to make an informed buying decision. We will win some and we will lose some. But those losses will be fewer and fewer as time goes on. Our industry is at a very unique crossroad to change how consumers look at dealerships. We have the ability more than ever to build the business we want to have and answer the call our customers are making.

 

[eddyshaf]

I will post the same reaction here that I had when I ran across this on CarBucks Facebook group...

I gotta say that with just a brief glance over his previous postings and a look at his website, I am not going to put a lot of weight behind anything this guy says. He appears to be a dealer basher of the highest order and has created a business of leeching off people and their fears, which he contributes to with articles like this one. I like Jalopnik and have read many of the articles over the years, but anyone who engages in fear mongering and then profits from the results is the lowest of the low in my book.

 

[Clay Toporski]

It was interesting, to me, to finally hear someone admit the front door of the dealership is online and we're still not doing a good job of meeting customer wants.

I think we, as an industry, are doing a terrible job. To me it's the same as what's happening in the store. 30% of the sales team makes up 70% of the sales. There aren't a lot of people doing internet sales well - and it comes down to individual accountability. Of course, we in the management realm are responsible for driving individual accountability and performance upwards - but it amazed me how we, as an industry, miss the simplest of steps.

Do you know how often I have told the same people that they need to investigate the lead and address the customer's questions in their response? Or, why we shouldn't simply acknowledge availability and ask for a phone call or appointment?

I still think we need to leave reasons to visit the showroom or we are wasting our time doing the entire education process online without a good way to close a sale - but we need to realize that shoppers are still visiting 3-6 dealerships before buying. Instead of shopping in the store, they are shopping online, and the store visit is basically equivalent to the sale if we don't find a way to mess that up (a big if!).

We need to push our value proposition to shoppers online: why this car, why our store, why this price, value, value, value. Actually, I'm glad we suck as an industry; because, if I can get my team good at this, we will be very productive.

And, we still can't get someone top dollar for their trade without seeing it and driving it - just like someone can't buy a used car simply on price without seeing and driving it. It just doesn't work - it is unfair the customer to try and do it that way.

 

[Tallcool1]

@Alex Snyder - I had to laugh when you just commented on the horrible grammar and spelling...I did the same thing and tried my ass off to focus on the message not the delivery.

@Clay Toporski - I find myself constantly comparing all of these percentages much like you did in your comment. I just plain do NOT buy all of these percentages. They simply do not add up.

@Everyone that commented on the blog post - PLEASE check out my website and find a car you like. I will damn sure sell you one over the internet, let you pay me through PayPal or wire me the money, and I will have that damn thing in your driveway before you get home from work! Where are all of you hiding? Pick me, Pick me!

I just can't get all of this to add up. I am going to put a "Buy It Now" button on my website as soon as I can get it there. I will keep all of you posted as to how well it works. Everyone hold your breath!

In the meantime, I think I will continue answering questions directly and honestly as well as inviting customers to come in and see it for themselves.

 

[Tallcool1]

I would also consider separating out the connection between Test Drives and Online Sales from causation to correlation. My thought on this is that I can go touch, feel and play with a bunch of electronics at best buy and then go and do a complete purchase online. I didn't buy said electronics because I poked at them at the store so It's not causation in this case. Test Drive's do not cause online car sales.

However I would argue that there is correlation. The idea of the more test drives, the more opportunities I can earn their online business. I know comparing a car to best buy are different. But, would you consider a test drive could be the same thing theoretically as poking at a tv screen at a best buy?

@Chris K Leslie - I believe that you can draw at least a correlation between the Best Buy and the dealership. I say this because I have customers that test drove elsewhere and came to me to buy the same car.

I understand what you mean about cause and correlation. I believe the point @Clay Toporski is making is on the other end of the spectrum regarding test drives causing online car sales. If his intent was like mine, the test drive PREVENTS online sales....not causes them.

On a lighter note, I always get a kick out of your posts. Little bit of psychology, little bit of humor, and a little bit of common sense all mixed together.