EPISODE RECAP & SUMMARY
One of the biggest mistakes a dealership can make is viewing consumer preferences as disruptions — especially when it comes to digital retail.
As digital solutions sweep through multiple industries, it will only become more and more inconvenient and detrimental to business to not offer a digital option at dealerships.
Mike Anderson, President and CEO of The Rikess Group, is of the mind that the fear of change is still a prevalent issue around digital retail.
Mike is a long-time champion of change, starting with pioneering negotiation-free selling at two small dealerships he ran in Western Massachusetts.
His perspective on forging a path to better meet customer needs is persistent, and that includes adopting digital solutions.
The two main fears that prevent dealerships from embracing digital sales
The automotive world is a wonderful place full of driven, ambitious people. Why, then, are we still debating whether or not to embrace digital retail? Anderson believes there are two main reasons:
- Fear of change
- Reluctance in leadership
These two issues are what Anderson strives to overcome by being an example of leadership and encouraging tech adoption.
“I just can't believe we still have a reluctance to embrace the way the consumer wants to consume. It is staggering to me,” he said. “I have a dear friend who wants to buy a car for his daughter. He calls me out of total frustration, saying ‘Why do these dealers still want me to come into the dealership?’”
When looking for a best price, this friend is met with invitations to come in and speak to a salesperson at the dealership.
“It’s silly, no?” Anderson says.
This method of sales seems even more outdated when we consider how people these days purchase groceries.
Parking lots are shrinking because people are driving up to pick up carts filled for them before they even arrive. Curbside pickup may have seemed like a strange yet convenient solution during the pandemic, but it’s here to stay.
The expectation and preference for convenient, quick, self-paced processes are only rising, and it’s those innovations and adaptations that play a large role in keeping establishments in the game.
How to mitigate consumer risks in the digital car-buying process
Another concern attached to digital retail is how to transact remotely successfully.
Though there are risks attached to remote selling, Anderson implores dealerships to drop the walls and look beyond their local market.
“At Lexus of Lehigh Valley, they just drove a car from Allentown, Pennsylvania, to West Virginia for delivery,” he said. “Drop the walls, stop thinking about your market as local, and embrace knowing you can deliver vehicles.”
The car in question in this case was pre-owned, meaning the risk was even higher in terms of a possible return.
“One of the catalysts that makes it successful is taking the risk out of the transaction. If you go online to Home Depot, Walmart, or Amazon — if you don't like what you consume, what do you do? You return it.” Anderson said. “If you can increase your sales exponentially, would you repurchase one or two cars a month to do that?”
If a dealership could pick up 50, 60, or 80 cars and take the risk out of the trade for the consumer, they could create a reliable system that relieves the pressure on their buyers.
Dealerships are typically reluctant to repurchase a car if there’s a problem. Anderson believes that’s a mindset of the past.
The more people feel the flexibility of remote transactions, the more likely they'll return to the dealership, recommend it, and walk away satisfied with their choice.
The essentials of training and retaining a more tech-savvy dealership team
Finding, training, and retaining the right talent for navigating a more tech-savvy landscape can come in many forms. The issue arises when leaders who have innovative, solid ideas, make these two mistakes:
- Launch the idea before sharing the vision
- Have a lack of patience with the process
Launching without a clear, defined vision for why the changes are occurring and how they will be applied is setting a team up for failure, plus lacking patience often means warped expectations. It takes time to develop a new process and get it running smoothly and efficiently.
“You can't flip the switch when you're making massive cultural changes in the dealership,” Anderson said.
When it comes to hiring and bringing people on board, you want the ones who fit the desired outcome. And if you don’t know your desired outcome, you’re probably not at the right stage to be hiring.
“One of the things we focus a lot on with my clients is extensive interview processes to make sure the people that are coming on board fit them — fit not only the culture of the company and the business of the company but also the vision of where it's going to go,” Anderson said.
Once that goal is established, it comes down to three things:
- People
- Process
- Technology
“Those are the three key elements to making it work,” Anderson said. “Train it, speak about it all the time, celebrate successes — I think we miss those opportunities frequently — and stick to the vision,”
Stay tuned for new episodes every other week on the Leadership in the Dealership Podcast.
