Prepare for the new competition

By John Mellor on 19th July 2022 Dealerships, Management Workshop, News Absolute Results, EV, Sales, Williams

A LEADING auto dealership sales and customers retention expert has warned Canadians in a recent podcast that the introduction of EVs into the North American market would not only see large changes in the way cars are sold and serviced, they would bring with them around 25 new brand competitors and 100 new models to contend with.

Jeff Williams, who writes frequent management workshops for GoAutoNews Premium, said that dealers need to not only be thinking about how they will organise their showrooms sales teams when supply resumes, they needs to think about the fact that 25 additional new companies are going to be trying to sell a range of cars to their existing customers.

Mr Williams, who is the founder and CEO of Absolute Results said: “We are living in very different times. For a moment, let’s forget EVs. Let’s forget the microchip shortage. Let’s forget Tesla and let’s even forget the pandemic. Let’s only look at one thing: the new competition.

“They are the 25 new brands and 100 new models that are hitting our market; Rivian, Lucid VinFast, Neo, Fisker, Verity, Byten, Scout, just to name a few. And even Apple.

“Now, whatever their automotive play is, there’s one thing we all know; they’re all after the dealer’s customers. All of them are.

Jeff Williams

“So coming to work to wait for customers, whether it’s to place an order or to browse your lot, or even fighting your OEM to protect your franchise agreement, that’s not going to protect you from the real competition, because (these new players) are the real competition.

Mr Williams said that while the laundry list of new competition was huge, dealers can take steps now to ensure that they resist the onslaught of newcomers by shoring up their customers and building strong retention to their dealership.

“Good dealers who have good people just need to tweak their process; they just need to shift their mindset to be a little bit more future-focused to say: “We have 10,000, 12,000 or 15,000 customers, we have 80 to 90 customers coming into the service drive every day, how do we just create an incredible experience and incredible processes so that we are their trusted advisor moving forward?

“How do we communicate that information on a regular basis so that they come to (your dealership) and say: ‘Hey, I was thinking of placing an order on a cybertruck. But you know, it looks kind of weird, it’s been two and a half years and there’s going to be more delays’.

“Have that conversation. Then share what your brand is doing and how you’re going to help them and how even if there is a two year wait for your EV you can say to them. ‘Hey, why don’t we get you something to drive in the meanwhile and let’s get you on the order list. And I’ll reach out every 60 to 90 days and let you know what’s coming and how it’s progressing’.

“So I believe one of the big keys to success in the future is keeping more of your customers, especially when there’s 25 new brands going after them, by getting your customers to renew more often.”

Mr Williams said: “Dealers tend to overvalue conversion but really the currency of the future is appointments and opportunities.

“A sales team that can come to work and make appointments every day and create some traffic is not completely reliant on a highly skilled business development centre. If they can create those opportunities themselves they will convert, especially if a customer is coming in on an appointment. We are prepared, we can be ready and we can deliver a great experience.

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“So it’s a mindset thing,” he said. “The ability to create opportunities and deliver great experiences is actually more valuable than simple conversion skills.”

Mr Williams told the podcast that dealers should allocate existing customers to sales staff to manage.

“We have been teaching dealers that when they give their sales professionals their base salary, tell them they are not just giving it to them to show up, that salary is because they are a portfolio manager. They have a pool of 600 to 800 customers that sales staff are expected to spend 90 minutes each day reaching out and engaging. Even though they’re maybe not going to buy this month, it might be next month or next year.

“So they manage that portfolio. So half of your business comes out of that book of business. They are creating 50 per cent of their own opportunities by taking good care of the dealer’s customers and then the BDC or marketing will bring in the other half. And so they have a contribution on the opportunity side as well as on the conversion side.

“In essence, take your customer portfolio and turn it into an engine of deals that month over month over month produces sales.

“With your processes on showroom guest experience and portfolio management put in place, when the inventory starts to return, the economy starts to slow, or the used car market starts to drop and the pressure on the things that you’re holding as your treasure today, volume and gross profit, when the pressure on those increases, it flips the reality of today’s measure of success because you’re ready and you’re not too slow to react.

“And this is a crazy thought. Quite frankly, we can build that model and maybe cause new brands coming into your market to say: ‘I want you Mr. Dealer or Mr Dealer Group to represent my product in your market because I can trust you to take care of my brand’s customers because you not only sell them once, you sell them again and again. And again.”