In a survey, 74% of auto dealers ranked the ability to use a single infrastructure and interface throughout their dealership as “very important” or “extremely important.”
These dealers believe systems that can't communicate with each other lower their customer service and increase costs. These results echo what many vendors hear from their customers: increase automation, simplify data entry, provide a consistent interface, and track leads/cost of sales accurately.
Relying on traditional systems present challenges from data collection to inventory management and financing, all impacting a customer's decision. Among them:
- Customer data, entered manually and often repeatedly throughout a transaction, promotes errors and causes dealerships to lose time and information.
- Customers become frustrated when asked to repeat the same information.
- Finance packages from a limited number of vendors deliver incomplete information on trade-in values, lease programs, and loan packages. Often deals are structured without a true understanding of the profit (or loss) to a dealer.
- Inventory checks are lengthy and lack current data.
- Expensive lead information is lost when customers opt not to purchase immediately, and the deal is never closed.
As a result, the average automotive sales transaction takes 171 minutes — nearly three hours. Many sales are lost at different stages in the process. Often customer leads leave the dealership with the customer.
NADA statistics show a dealer spends nearly $400 per unit sale in advertising just to attract buyers to the store. Add the cost of time spent selling, financing, and negotiating, and clearly a lost lead can hurt a dealership's bottom line.
The need is clear. Automotive retailers require a system that automates business processes to support the entire sales-finance process — from the time customers walk in until they sign documents and drive away.
Those systems track leads and calculate the cost of sales to structure every deal in a profitable manner. They also provide a common, simple interface, deliver integrated information and offer in-depth and continuous training.
Ninety-four percent of the dealers who are trained on such sales finance solutions say they can close 6%-10% more of their deals.
At the heart must be a deal-structuring capability and an extensive database of financial programs.
If this is in place, dealers can structure the most financially beneficial deal on a payment basis and/or a profit basis every time.
Dealers adopting this advanced technology can leverage software and hardware to instantaneously and accurately capture every lead, whether it is a call, a walk-in or an Internet inquiry.
Sales personnel can capture details on trade-ins, cash down and the type of vehicle a customer wants to purchase, and — while the customer takes a test drive — book out the trade using Blue Book, NADA, Black Book, and the latest national and regional auction values, and research the database to provide lease and subprime new-vehicle financing and used-vehicle financing.
It's all done by the time the test drive is completed.
Systems can integrate with Reynolds & Reynolds and ADP, allowing the dealership to push deals and pull inventory information. Simple user interfaces display lease and purchase financing options side by side.
With this technology, a customer can drive a new car home after about 1.5 hours at the dealership, half the time of a traditional sale.
If they choose to “think about it,”dealers are assured the lead data are accurately captured, maximizing the value of marketing and advertising programs.
Steve Hamburger is director of marketing for Market Scan Information Systems.