Why Worry: Disrupting the Disrupters

in Apr 10, 2019

The customer experience at your dealership is more important than ever before. With start-ups aiming to take away sales by luring customers with promises of a hassle-free buying experience, customers are starting to realize that they no longer have to sit at a dealership for hours. In fact Amazon France just sold a car completely onlineand delivered it directly to the consumer via truck and helicopter. If you don’t think that Amazon has larger ambitions – well – you might want to reconsider.

With the many start-ups in the market aiming to sell cars, should dealers be worried?

Well, consider these facts:

  1. Technology – For every start-up that comes along and creates technology that makes the car buying process more convenient, an automotive technology company creates a product that replicates that experience. Any dealer who chooses to utilize that technology can effectively squash that start-up in their market. Customers simply don’t have time to sit at a dealerships all day in order to purchase a vehicle. Increasingly most, or all of the car buying process is now done online. New technologies make the process more convenient (and faster) for the consumer and makes the dealership’s sales department more efficient, allowing them to sell more vehicles with less salespeople in the same amount of time.
  2. Human Emotions, Senses and Perceptions – Buying a vehicle is an expensive and personal experience. Despite the perception of poor experience, consumers still want to touch, feel, smell and drive a vehicle before purchasing it. And that’s where a dealership has a huge advantage. It is important to get that customer emotionally connected and excited about a vehicle and that connection has a tremendous impact in closing the deal. No online start-up can duplicate that. It’s simply not possible.
  3. State Associations – Franchise agreements prevent most manufacturers – with the questionable exception of Tesla – from selling new cars direct to consumers. This will undoubtedly be controversial for years to come. However, for now, dealers can rest assured that their associations have their best interests in mind. Franchise agreements afford certain protections and consumers currently have to come to a dealer to buy a new car (at least in the United States.)

Let’s say that in some miraculous way, dealers can’t replicate the online experience and technology evolves to the point that consumers can use all of their senses (via virtual reality, augmented reality or whatever comes next), should dealers then worry?

Perhaps not. Here’s why:

People want to deal with people. That interpersonal experience while buying a large ticket item is still necessary. The key to winning business and retaining the customer lies not with novelties such as vending machines, but rather in the experience the dealership provides in sales and service and in its efforts to improve and show the customer appreciation for their business.

Going into 2017, make a commitment to analyze and improve your dealership’s customer experience through gaining feedback from both your employees and your customers. If consumers in your market demand a more digital experience (whether in full or in part), consider adopting technology that allows them to interact with you on their terms. When they do arrive, ensure that they are treated well and that the process is efficient. In this way you can increase business and thwart the disrupters.

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