Digital Dealer - February 2020 - 14

DEALER OPS & LEADERSHIP

in a hit to CSI, negative word of mouth, and
perhaps bad online reviews. Set the price/
terms too high and many consumers who
might otherwise consider your store will
shop elsewhere.
If you work with multiple lenders and are
located in a state and locality with complicated tax and fee rules, how do you arrive
at the right price/terms for every stick of
inventory on your lot? The answer is - you
need technology.
"We were founded under the premise
that there is only one scientifically perfect
solution for any automotive transaction,
and any solution that's less than perfect
negatively impacts four different sectors of
the market: the consumer, the dealer, the
lender, and the manufacturer," West said.
"From a dealership standpoint, any solution
that's less than perfect invariably results in
lost revenues or overlooked opportunities.
So, for us to calculate the scientifically perfect solution for every transaction, we have
to consider five classes of data. That's the
manufacturer, the lender, the municipality,
the dealership, and the consumer. And the
consumer is a wild card. Every consumer
has their own budget, credit profile, and
appetite for a particular vehicle."
In putting all this together, it is critical
to build into the price/terms everything
the dealership wants to achieve for the
transaction, including a gross profit and fee
structure that achieves the profitability the
dealer needs from that sale. A Market Scan
tool automates this process into a set-itand-forget-it cornerstone of the process,
though exceptions - a potential high-profit
over-MSRP opportunity - are easy to make.
Of course, the price/deal for each individual consumer must match perfectly with
their credit score, credit history, and other
circumstances that could affect the deal.
"The goal is to make sure that every
contract or every payment quoted to a
consumer is not just 100% accurate based
on the information that's out there, but it's
also compliant with the lending institution,
the manufacturer, everything," West said.
"It's a contract. It's a payment that could be
contracted and get funded, so we could get
this contract done."
Once you have a solid price and set of
associated deals that are competitive in

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the marketplace, meet the store's business
goals, are lender-compliant, and square up
with the tax/fee environment in which the
dealer is located, you have a gateway to a
whole new way of doing business. Not only
can vehicle sales be completed end-to-end
online, but also the in-dealership sales
process can be altered for the benefit of
consumer, dealer and dealership personnel.
Take the same process, for example. By
enabling each salesperson to access the very
same data available to the online shopper,
the salesperson can adopt a much more
professional, consultative approach with
each client. Based on various iterations of
the same "deal," different upfront payments,
monthly payments, and term lengths, the
salesperson can help the customer determine which is best for her or his needs,
knowing that each of the choices is an
equally good deal for the store.
Another opportunity is for the salesperson to present other purchase and lease
opportunities that match the buyer's desires
in an upfront payment, monthly payment,
and term length. West calls that the "question that historically has gone unanswered
in the automotive space, and that is - 'what
can I drive'?"
By keying in those parameters and the
customer's credit score and associated data,
the system can identify every vehicle in
inventory that meets all the criteria with
associated, transaction-ready deals. If the
store is part of a larger dealer group, the
system can additionally identify other qualifying vehicles in that inventory.
Rather than having to leave the customer multiple times during the typical sales
process, salespeople can be equipped with
all the information they need to take the
sales process from the greeting at the front
door through the delivery in far less time
than ever before, with far less friction and
distrust and all the while with the knowledge that the dealership's business goals are
being met.
At the same time, an online buyer can
start the process at home on their couch on
a Friday night at 11 and walk into the store
the next day able to pick up the process
where they were with the help of a salesperson, who can essentially "join the deal in
progress." Rather than doing a traditional

F&I process, introducing a new person to
the transaction after the customer has developed a level of rapport with the salesperson, the "add-ons" process can be facilitated
by the salesperson.
One thing many seem resigned to in this
brave new world of online auto retailing is
an erosion of gross profit. Putting the price
upfront seems to some like the beginning of
a race to the bottom. So, we asked West how
he felt technology would affect grosses.
"I think they probably can improve," he
told us. "I think there are a million studies
that show that a consumer will pay a premium for a streamlined, super pleasant buying
experience. They'll pay a few extra bucks if
they don't have to go through the four-hour
sausage-making process that everybody
hates. And the dealers that are doing a good
job recognize that."
As to the future, better sales, marketing,
and analysis techniques are introduced every day. Those who have adopted an online
buying model, changed their organizations
to accommodate that and adopted tools to
facilitate it are prospering. Their throughput is better and their customer satisfaction
in better.
As West said, "There are those dealers
who say, 'Look, we don't quote payments
online. Shoppers need to call us, or they
need to come in and we'll show them
payments at the dealership.' I think those
dealers' longevity in the marketplace, at
least in the digital retailing marketplace,
will be short-lived. We believe the winners
will be those dealers who adopt a 'Let's
be transparent and ask a fair price - that's
neither abusive nor a giveaway - and offer a
superior buying experience.'"
West continued, "Throughout history, particularly in retail, those retailers
who offered selection, transparency, fair
pricing, and ease of doing business always
gained market share - at the expense of
those retailers who failed to adapt to what
customers wanted. Today's car buyers want
a complete, end-to-end buying experience
that is informative, accurate, consistent,
transparent, and easy."
To submit article feedback, questions or topic
suggestions, email magazine@digitaldealer.com

February 2020

http://www.digitaldealer.com

Digital Dealer - February 2020

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