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NAVIGATING THE UNCERTAIN TERRAIN OF RETAIL AUTOMOTIVE: Overcoming Fear and Embracing Change.
The retail automotive sector is no stranger to change yet we as dealers seem to move at the same rate as glaciers when it comes to engaging in it which is harming our forward progress, retention, and profitability.
We understand that technology is evolving at an unprecedented pace, with consumer expectations soaring to new heights, and the digital disruption continues to reshape traditional business models, all while dealerships find themselves at the crossroads of uncertainty. There is no doubt that the palpable fear of the unknown reverberates through the walls of our showrooms and service departments, and it’s understanding the roots of this fear that is essential for transforming it into a catalyst for growth.
The Technological Revolution: A Double-Edged Sword
The rapid evolution of technology is both a marvel and a source of apprehension for automotive dealerships. What could be our greatest gift could also be the bain of our existence. The fear of making the wrong investments or failing to keep pace with the latest trends looms large. To confront this fear, dealerships must shift their perspective from seeing technology as a threat to recognizing it as an enabler from its ability to provide intelligence to automation.
Education as a Cornerstone:
The technological landscape can be intimidating, but education is the key to unlocking its potential. Dealerships must establish regular training programs to familiarize their staff with emerging technologies. From AI-driven customer engagement tools to virtual showrooms, the better the understanding, the smoother the integration. Further it is not just training that must be provided but coaching as a follow-up to fully entrench the teams into the opportunities.
Strategic Partnerships:
The pace of technological change is relentless, and it's unrealistic to expect every dealership to stay abreast of every innovation as the bandwidth is not there.
Strategic partnerships with technology providers can be a game-changer. These collaborations not only alleviate the burden of constant vigilance but also enhance the dealership's ability to adopt cutting-edge solutions without the fear of implementation challenges. We need to place full trust in these partners as they will be the driving force that allows our teams to meet the expectations placed upon them. Be open in your communications with them as well as allowing them to be transparent with you. You might not like what they have to hear but will benefit from the knowledge gained from the conversation.
Meeting Elevated Consumer Expectations: From Transactions to Relationships
Consumers today demand seamless, personalized experiences both online and offline. The fear arises from the challenge of meeting these heightened expectations and maintaining consistency. To overcome this fear, dealerships must shift their focus from mere transactions to building lasting relationships.
Transitioning back to the relational sale will pay dividends in long term customer value as the customer will once again see the investment in the relationship rather than the value associated with the profit they bring initially.
Omni-Channel Integration:
Embracing an omni-channel approach is crucial. The online research phase should seamlessly transition to the in-person test drive, creating a connected experience. Investing in robust Customer Relationship Management (CRM) systems is paramount for tracking and understanding customer preferences across various touchpoints. It has been said many times that the customer spends over 17 hours online before their visit. Why is this? One so that they are fully briefed on the purchase but also to speed the process along. A dealer that doesn’t offer a seamless transition is going to become archaic within months not years or decades as anticipated.
Data-Driven Insights:
Leveraging data analytics is no longer an option; it's a necessity. Understanding consumer behavior through data-driven insights allows dealerships to tailor their services to meet individual preferences. This personalized approach not only enhances the overall customer experience but also builds loyalty. With the ability to track nearly everything with AI, CDPs and MLMs dealers will have intelligence and insight like never before. Think of being able to understand customers with unseen before clarity, knowing their wants, needs and purchase timelines. All this is now available and more.
Digital Disruption: Redefining the Dealership Model
The rise of online car sales platforms challenges the traditional dealership model. The fear stems from the perceived threat of losing relevance in this digital era.
However, this disruption can be an opportunity for dealerships to redefine their role in the customer journey. With the biggest online generation becoming your target market digital retailing is not just a part of how we do business but will be how we do business. If you don’t see this as the main reason why Amazon is entering into the playing field, then you are just turning the proverbial blind eye to the concern.
Digital Showrooms:
Investing in virtual showrooms or online platforms is not a concession to the times; it's a strategic move. Allowing customers to explore inventory from the comfort of their homes caters to changing preferences and expands reach beyond physical boundaries. Think back to how many hours your customers are spending online and how they must be engaged to remain in the buying cycle.
It’s not about the lead generation, it’s about the ability to provide them information on the products they wish to investigate, just like in-person experience.
Hybrid Models:
The dichotomy of online and offline sales is a thing of the past. Dealerships can explore hybrid models that seamlessly combine the strengths of both. From online research to in-person test drives, this holistic buying experience is the future of automotive retail. Understanding this we MUST reach the customer where they are as we are no longer in control of the buying journey. If we push back, we will lose that opportunity, this is not a promise but a guarantee. For they, customer all they are wanting is a seamless, frictionless transaction.
Changing Demographics: Tailoring Services for Diversity and Generations
Shifting demographics bring diverse expectations, and the fear lies in understanding and adapting to these changes. Dealerships must recognize the opportunity to broaden their customer base by embracing diversity and tailoring services accordingly.
A great quote I often hear is “I know my customers”. Do you really? Are you of the same generation and act in the same manner? Most Stakeholders aren’t. Think of it. Most of the customers in a dealership account for two generations back from the average Dealer Principal. Do we honestly think that we understand that generational gap? We need to start bridging that chasm with a knowledge of how they wish to be engaged to establish those relationships.
Market Research:
Regularly conducting market research is not a luxury; it's a strategic imperative. Staying attuned to changing demographics and their preferences allows dealerships to evolve with the times. Understanding the needs of younger generations, the increasing importance of sustainability, and the growing demand for electric vehicles is vital.
When was the last time you attended a community event or held a focus group of randomly chosen customers? What are you doing to keep up with the community as sponsoring a local team is not cementing your presence within the community. It’s those who get out there and really engage in building relationships that will benefit not only from the referral body but that of what is actually being said.
Inclusive Marketing:
Crafting marketing campaigns that resonate with a diverse audience is more than a gesture; it's a necessity. Embracing inclusivity in messaging, imagery, and customer engagement strategies ensures that the dealership is not just meeting but exceeding the expectations of a wide array of customers.
Do you know the numbers? When was the last census taken and what were the demographics. Catering to a singular market can prove dangerous with great financial implications. Whereas knowing the local and ultimately the buying community will provide long term success.
Investing in Human Capital: Bridging the Skill Gap
The fear of the unknown is often rooted in the skill gaps within the workforce. How many times do we see management look down to a team member and berate them for failure? With the speed of evolution of the environment we often do not have the bandwidth to provide the support necessary for success.
Dealerships must invest in continuous training programs to equip staff with the skills needed in a rapidly evolving industry.
More so, engaging with training only limits the capacity of where the team can achieve. Studies show consistent training will lift the performance of the team by 23%. However, when we compliment that regime with a coaching component it increases that to an 88% lift, so don’t limit your teams’ capabilities with singular focus.
Skill Assessments:
Regularly assessing the skill sets of the team is not about identifying shortcomings but about unlocking potential. This includes technical skills related to new technologies and soft skills crucial for effective customer engagement.
Look to your Leaders, not Managers as they will be best to develop your teams.
Leadership Development:
Nurturing leadership qualities within the team is not just about addressing the present but preparing for the future. Strong leaders can guide their teams through periods of change and uncertainty, fostering a culture of adaptability.
Look to find true leaders within the teams not just the person who has been there the longest or sells the most. Often, it’s not those people who will make your teams the best they can be, it’s the individual that volunteers to help, that actively listens before responding and holds themselves accountable for their actions.
Employee Feedback Loop:
Creating a feedback loop where employees can express their concerns, share ideas, and actively participate in the dealership's evolution is not just about communication; it's about creating a sense of ownership. When employees feel heard and valued, they become more engaged in the process of change.
Embracing Change as the Only Constant
In conclusion, the fear of the unknown in retail automotive is a natural response to the rapid transformations taking place. However, by viewing these uncertainties as opportunities for growth, dealerships can position themselves as leaders in the ever-evolving automotive landscape. The key is to embrace change, invest in education and technology, prioritize the customer experience, redefine traditional models, and empower the workforce to navigate the unknown confidently.
The automotive industry is not standing still, and neither should its stakeholders.
Together, by navigating the uncertain terrain of retail automotive with a proactive mindset, we can drive the future of automotive innovation and ensure that fear is not a roadblock but a steppingstone to success.
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