3 Major Benefits to a Hybrid Sales Model
- How to combine in-store and online processes.
- Meet customers on their terms without sacrificing what’s important.
For years, digital retailing was all the industry talked about. As consumers’ lives became more digital, dealerships and other retailers needed to keep up. Though the automotive space had some strong roots in the ground, getting up to speed on all things digital retailing wasn’t necessarily an easy feat. Let’s face it, it’s taken years for some retailers to master their digital retailing approach.
And just when you thought you had it under control, the industry took a turn. With the onset of the pandemic, consumers everywhere wanted more of the transaction to be done in an online environment, specifically with as little contact as possible. Though very similar to digital retailing, online retailing is not quite the same. Digital retailing by itself is about digitizing operations in your dealership. Taking this approach helps speed up productivity, eliminate bottlenecks, and meet consumers’ expectations. Online retailing on the other hand is about transitioning your brick and mortar operations to an online environment – things like negotiating vehicle terms, signing documents, and paying for service invoices all online. Taking these standard day-to-day processes that have typically been done in-store and making them available to consumers from the comfort of their homes. It’s no surprise this aspect of the industry has really ramped up in the last year.
Now, you can’t be too quick to throw your hands in the air and forfeit everything you worked for in-store to go fully online. There’s still going to be a significant portion of your customer base that chooses to do business with you, or pieces of the transaction at least, in-store.
So how do you decide between what you know as traditional in-store processes (digital retailing) versus the newer high-demand remote processes (online retailing)? Which customer base do you invest in?
The reality is, you don’t have to decide. There’s a third option the Amazon giants and Carvana disrupters have figured out. It’s a hybrid business model, or what we like to call a Retail Anywhere approach – one that combines both the in-store and online experiences, maximizing the digital road to the sale. The trick is making them consistent and continuous so neither is disrupted by the other. If a customer starts online and ends in-store, their experience, their information, their expectations have to be carried through the entire purchasing journey. This can be a difficult mountain to climb without the right subset of tools, or rather, the right approach in mind. Let’s walk through three core benefits that make up this balanced, hybrid business model that helps you serve customers no matter where they are.
Control and Profitability of the Sale
In an online environment, you can’t simply hand the reigns to your customers. For example, if customers are browsing F&I products online by themselves, the chances of them making an additional purchase are very low. There are a couple of reasons for this. First, consumers have been conditioned over time to say no to those add-on products. Second, the average consumer probably doesn’t understand the value in them to begin with. So when the customer is shopping online, with no guidance from your F&I manager, there’s less opportunity for those products to be added to the deal. That means profits begin to shrink, and shrink quickly.
Your F&I managers were hired to sell because it’s what they do and they’re great at it. That’s what’s most important at the end of the day, right? Sustaining long-term dealership profitability. F&I managers need to be present, even if they’re not physically in the same room.
Accuracy of the Transaction
I can’t stress accuracy enough. It’s what keeps the transaction moving from point A to point B, or in our case, from online to in-store so smoothly.
Think about the amount of information that goes into a customer profile or new car deal. Think about the steps involved with a new lead – from lead submission all the way to signing documents. How many times does the customer and vehicle information appear throughout the process? This information by itself is critical. It has to be 100% right; otherwise, you run into frustration and can even risk losing the deal. Throw in the possibility of a customer starting their shopping online and deciding to pick up in-store where they left off, and you might encounter more unwanted fumbles. Does your system recognize this customer started the purchase process already? That they were quoted rates and terms? That they were comparing two vehicles? Or, on the most basic level, does it even recognize the customer at all?
If a customer is given a quote online and then decides to finalize documents in-store, what they see online has to be the same as what they see in the store. When their payment suddenly jumps $50, their guard goes up. It’s a breach of trust, and they start to have the perception that doing business with you isn’t all that great. That’s where you start to risk the transaction altogether. Consistency is key in a hybrid business model.
Efficiency of Your Employees
Let’s not forget about the impact on your employees’ productivity and efficiency. If their experience is clunky, there’s no denying the customer’s experience is just as bad, if not worse. Despite what might seem like a complicated process at first, making the sales and F&I process consistent between online and in-store really is simple. It’s the little things that make up the big picture.
We touched on it with accuracy, but eliminating manual, repetitive data entry is such a time saver on your staff. Who really wants to enter a 17-digit VIN five times, just for one car deal? Then multiply that by the number of deals they complete a day. Other variables that go into efficiency include keeping communications open so you can hold your staff accountable, accepting down payments in F&I so the experience is more transparent and secure, and even gaining faster lender approval so the entire transaction feels less like a pressure cooker on your customer. One dealership I talked to recently said they’re “doing more business with less people” following the Retail Anywhere approach. They are cranking out more cars and more service work with less people… that is accurate… and growing profitability.
The Hybrid Business Model
So how does this hybrid business model work? First, it’s important to note it’s not just about going digital, because the days of a linear purchase path are gone. In today’s world, it’s much more like stop-and-go or bouncing between channels. If a customer can be anywhere – in-store, online, or both – the experience is expected to be consistent and seamless across the entire transaction, throughout the entire purchasing journey. It’s about meeting the customer on their terms – being able to Retail Anywhere – without sacrificing what’s important to you: control and profitability of the sale, accuracy of the transaction, and efficiency of your employees.
The consistency and ease behind the Retail Anywhere approach is only possible because of a single system built around a single, unique identifier for each customer, each vehicle, and each transaction. When your dealership runs on a single foundation, manual processes are eliminated, all departments become connected, and business operations are simply more cohesive. And when you’re working smarter, not harder, it’s much easier to grow your profits.