Digital Retailing & Your People Strategy

September 17, 2019

By Candice Crane

Carvana continues their record growth, just reporting their 22nd consecutive quarter of triple digit revenue growth with a 95% gain in volume year over year further demonstrating the buyer appetite for a new model.

As I talk to dealers they know they need to move down a new path, but many times they expect the technology to do the heavy lifting, instead of truly changing their processes to improve the customer experience. There isn’t a quick fix solution. To make the most of this new world, we have to take an entirely new look at your people strategy, especially for your sales teams, and the way our dealerships function in each customer touch to effectively compete.

Why is Digital Retailing Different?

The customer is informed in a way that wasn’t possible in the past. In changing the way you manage your organization to better serve them, it will feel like you are losing control over aspects of the sales process that we as an industry have spent years perfecting. But the truth is, that control is already gone. The meet and greet word tracks, fact finding scripts, TO set ups, and back and forth negotiating has changed.

There are a broad range of digital showrooms and customers are moving down the sales funnel in the electronic showroom at their own pace and without our involvement. Vehicle selection, trim level, pricing, trade appraisal, financing options and financial products are all be transparent to the customer with minimal or no interaction from our teams. Firm pricing that may or may not be displayed on your site, is available online for your competitor’s vehicle if not your own.

Today, most customers still want to come into store after they have identified the vehicle they want through their online research. It’s our job to keep the percentage of people engaging with the dealership directly as high as possible. Part of that mix of people coming in is a new generation of first-time buyers. If they are investing in coming to see you, now is your chance to make that trip to the dealership valuable because they have options not available to previous generations and won’t repeat a lousy experience.

So What Does this Mean for Automotive Retail?

We need to keep the deeply informed customer moving forward on their path. We can no longer treat the customer as a lead and send them back to the starting gate when they arrive at the store. Reverting to the old process of setting an appointment or forcing the customer to start with the needs analysis before allowing the test drive is equivalent to ordering a meal for pickup and finding out you have to reorder once you arrive at the store. Not the experience we would want, nor one we should give our customers. Whatever information the customer has given us more information about what they want, what they are willing to pay and how they want the deal structured needs to be honored. We need to respond with a reengineered process that leverages the information we’ve been given to get the customer out the door quickly and efficiently.

Preparing Your Teams

This is bigger than just redefining the sales process. If we are going to win in digital retailing, there are four core people concepts that set the foundation: employee autonomy, role and organizational design, compensation and accountability.

Employee Autonomy: Who can make decisions? In the traditional world, only managers could. In the new digital world, customer-facing employees must be empowered to pivot along with the customer. The number of steps to be completed before the sale remains the same, but digital retailing has the potential to change the order of the steps. Every sales team member should have access to where the customer is in their journey, and be empowered to assist them along the way.

Role and Organizational Design: As the selling process moves away from a linear forced march, so should the design of our roles and teams. Roles with a limited scope and departments that operate in a silo will slow down the process and take the decision-making ability away from front line employees. Progressive dealers have already begun to implement concepts such as a one person selling model and small teams to leverage collaboration, communication and efficiency. In order to fully embrace this new way of interacting with our customer, we need to break down department walls to create smart, empowered employees that can impact the customer experience at every level.

Compensation: The economy is strong and unemployment rates are experiencing record lows. The nation is in a war for talent and retail automotive is on the losing end. Highly variable commission-based pay plans are no longer attractive to the labor market and the design of our compensation plans do not align to success metrics. If we lay awake at night wondering if our people are delivering a customer experience that will keep the customer coming back then we need to reward the creation of that experience, not solely on how much gross each person or department is attempting to generate. Equitable compensation plans that eliminate rivalry between departments and reward meaningful results are not only more attractive to the labor market, but more importantly they get your team working together to accomplish a common goal.

Accountability: Similar to the shift in compensation philosophy, the way we view accountability needs to evolve as well. We can no longer afford to allow our compensation plans to be the primary driver of behavior. Digital retailing will force increased transparency with the customer and the same concept should apply to how we communicate with our teams and hold them accountable for performance. Goals need to be set at a company not individual level and conversations should occur daily regarding planning, execution and collaboration. This is no longer about what each person can do, it’s about how we as team can win the customer for life.

Where to Go from Here

If these concepts sound big and complicated it’s because they are. Changing an entrenched culture can’t be done overnight. It starts with recognizing the need for evolution and putting into motion small and incremental shifts that will advance process, people and strategy. The best place to get started is a familiar one- your sales desk.

Clear your schedule, keep your phone in your office, and sit at your Managers desk all day. Observe. Ask questions about process. Take notes. Do a time study to see how long customers spend in your store and how many employees engage with them during the selling process. Ask your team members what is working and not working. Talk less, listen more. If you do this well, the problems become clear and the solutions begin to make more sense.

Bobby Knight once said ‘your biggest opponent isn’t the other guy, it’s human nature.’ Don’t let the way we’ve always done things prevent you from building a foundation that is going to support your future. Your customer and employees are asking for change- the time is now to act.

About the Author

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Candace Crane

Candace Crane[/caption]

Candice Crane has extensive experience in Talent Management and is considered a SME in recruiting and retention strategies for high turnover environments. Candice completed her Undergraduate degree from the University of Wisconsin-Madison and holds a Masters Degree in Organizational Development. She is a borderline Millennial who loves the car business, macroeconomics, interesting conversation and playing outside.