The auto business is just one of the industries that has lately needed innovation due to technological advances and other worldwide changes. For automotive dealerships, new ways of business are approaching at a rapid rate. Some of the major future-forward trends that are bearing down on vehicle retailers include:
- How well you (and your OEMs) have prepared for the transition from internal combustion to electric vehicles
- How authoritative is your marketing presence online, where more and more of the purchase process is happening
- How successfully you can accommodate increasing numbers of Amazon-conditioned car shoppers, who expect a quick, friction-free buying experience
As we move farther into the 21st century, your store will be measured against these new parameters of dealer performance – how well will you score? Your dealership’s level of success in these three areas will directly affect its value in the buy-sell market – and when you partner with DCG Acquisitions, you can be sure value maximization is always our goal.
Let’s take a deeper look into these future-forward trends and how you can meet the challenges that they present.
How does your dealership score on EV readiness?
Given the environmental costs and limits to efficiency of internal-combustion engines, future cars will definitely be propelled by something else. Many local governments are mandating that electric vehicles (EVs) should be the only new cars sold after a certain year, which may be as little as 5 years in the future. More and more EVs are appearing in showrooms. Some manufacturers have also announced that they will no longer produce internal-combustion engine (ICE) vehicles after a certain point in time.
Make no mistake, at some point EVs will outnumber ICE cars. It’s time to consider some of the aspects of this coming change in propulsion systems and how your store can be prepared for it.
How do your OEMs stack up for EV readiness?
Not all manufacturers are created equal when it comes to EV readiness. The future industry leaders are already all-in, spending billions to develop their EV technology, a line of attractive vehicles that use it, and a secure supply chain to assure a plentiful supply of the materials needed to produce the batteries that will power their EVs. These carmakers are ready to supply the market.
To truly succeed in the move to EVs, you need to be paired with an OEM that is an EV leader.
Who are the EV leaders
Let’s deal with the 800-pound gorilla first. It’s Tesla, who has sold way more EVs than anybody else. Even though Tesla sells direct and has no dealer network, every EV manufacturer and dealer must consider this EV pioneer to be their primary competitor. Tesla has a full line of EVs, unique technology, factories worldwide, and a huge base of satisfied customers.
Now on to the OEMs with franchised dealers. At this point in time, based on their overall commitment to EVs and their recent vehicle pipelines, the leaders include:
- General Motors
Does your geographic area have a high EV adoption rate?
Your dealership’s precise location will have a lot to do with how fast you can expect the overall EV uptake to be. According to the US Department of Energy, of the 1,019,260 EVs registered in the US as of June 2021, fully 42% of them are located in California! Other significant EV states are Florida with 5.7%, Texas with 5.1%, and Washington with 4.9%. After that, it thins out pretty quickly – the remaining 46 states have 45.3% of the registered EVs spread between all of them. The lowest-ranking states (North Dakota, South Dakota, and Wyoming) each have less than 500 EVs within their borders.
Take heart if you are located in a state with lower EV numbers. You can choose to grab the lead and become your area’s leading EV dealer. Becoming an EV expert and offering that expertise to your EV-interested customers can net you a large share of a smaller pie. It will also position you well for the future, when EVs are commonplace across the country.
Does your geographic area have a large number of EV chargers?
This is another barometer of how ready your area is for large numbers of EVs. Without an adequate public charging infrastructure, most consumers will not feel comfortable with owning an EV, especially if they are unable to charge at home. This could rule out the large proportion of potential EV customers who live in apartments and condos. Homeowners with EVs will also be concerned about this issue whenever they need to travel beyond the range of their home chargers.
The key charger metric to evaluate is not the sheer number of chargers available, but the number of chargers per EV in your area. It should be proportional. This will determine how open and accessible your area’s charging network really is.
Does your dealership offer state-of-the-art EV charging?
Manufacturers expect their dealers to educate the public and lead the way toward the bright EV future. As part of this effort, automakers are asking their dealerships to install state-of-the-art EV charging facilities, for the convenience of both their customers and the EV-curious public at large.
There are two different types of chargers you will likely be requested to install:
- Level 2 (240 Volt AC) chargers, which will charge most EVs in about 8 hours
- Level 3 DC Fast Chargers, which can charge an EV to 80% in less than an hour
Your dealership’s current electric service is probably adequate to support the Level 2 chargers, but the Level 3 Fast Chargers will likely require a major upgrade to your electrical service. These chargers are expensive to build and operate but are the fastest way to charge an EV – existing EV users will be very attracted to Fast Charger facilities.
Have a conversation with your electric power provider to understand what’s involved. There are state and federal grants, rebates, tax credits, and other incentives available for covering the costs of your EV chargers. Another option is to partner with charging service providers like Chargepoint, Blink Charging, and Plug In America for assistance with getting your charging network built out.
Is your dealership well versed in EV-speak? Do you truly believe in EVs?
Can the people in your dealership “talk the talk” with well-educated, knowledgeable EV shoppers? This is an important test that your staff must pass to be considered legitimate and trustworthy EV purveyors by the public.
As the EV market moves from early adopters to mass market consideration, it is even more important that your entire staff (not just salespersons) is EV-positive and on the same page. A few tips for achieving this:
- Educate your staff about the basics of EV driving and charging
- Let them all test drive the latest EVs and experience the many benefits they offer
- Offer test drives to all shoppers interested in an EV
- Explain to customers the benefits of owning an EV, including charging details, environmental benefits, improved performance, quietness, less maintenance, and no more buying gasoline
- Partner with your local electric utility and charging providers for staff training and to educate consumers
- Add a section to your website to position your dealership as an EV leader
A high level of EV readiness will add significantly to your dealership’s value.
How strong is your dealership’s marketing authority?
If there is one thing that the COVID pandemic has taught us, it is the extent to which consumers now prefer to shop for and even buy their vehicles online. It started with the initial vehicle research process, then continued with the direct sales model provided by Tesla and other EV startups.
The pandemic closed showrooms and necessitated a further increase in online purchasing capabilities by franchised dealers. Remote test drives, remote F&I and price negotiation, and even remote delivery at customers’ homes became an accepted part of the sales process. Online-only used-car sellers like Carvana, Shift, and Vroom have made this way of buying even more widespread. Now, as pandemic concerns are easing, many customers show no signs of wanting to return to the old ways.
What this means is that the importance of your dealership’s website as a marketing tool has never been greater. To attract more shoppers to your site, and to do it earlier in the buying process, you need what is known as “marketing authority.” Without it, you will find it much more difficult to succeed in today’s competitive online marketplace.
How does Google see your brand? As an authority or just an average dealership?
As with so many internet-related issues, marketing authority can be traced directly to Google’s page rankings. Your marketing authority is a reflection of how well you have built your website into a legitimate and well-respected source of knowledge and expertise, as compared to your peers’ sites.
Because Google values sites that provide their users with reliable and regularly-updated information, these sites receive higher page rankings through organic search. When Google considers your site to have a high authority rating, your pages will come up much higher in the rankings than those of your competitors’ sites. This means that you will get more customers coming to your site than they will.
Are you creating unique informative content that is getting indexed?
A large proportion of your marketing authority ranking comes from the quality and freshness of your content. Your content should always be unique and be based on the field that you are in.
Your site’s authority rankings will evolve over time as your content strategy unfolds, so you should see content as a long-term project that will ultimately pay great dividends. A good place to start is with so-called “evergreen” content, or topics that will not go out of style and will generate ongoing traffic. Evergreen content will bolster your authority rankings for years to come. For the best-indexed results, your content should be produced as long-form articles, since these ideally contain more useful information and will tend to be ranked higher for authority by Google.
Some other content-related tips for boosting your marketing authority:
- Boost traffic to your content by promoting it on your social media channels.
- Add links to other authoritative sites to your content (but not too many!) so that your readers can go deeper if they so choose.
- Add new, high-quality content as frequently as possible.
- Have an easy-to-use content navigation interface, so visitors will stay longer.
- Consider adding a YouTube video channel or doing podcasts
Do you hold more page-one positions than your competition?
Everyone knows that the internet Holy Grail is coming up on page one of the Google search results. How are you doing in this area, compared to your competitors? An excellent way to find out is to do a competitive analysis, which can reveal the strengths and the weaknesses of both your and your competitors’ web marketing strategies.
A competitive analysis is a complex process with lots of moving parts. While there are quite a few articles on the internet about what this process is and how it’s done, the technical and time-consuming nature of performing a competitive analysis (and being objective about it) is best left to an outside digital agency. Interview several and go with the one you prefer.
How does your domain authority rank against your competitors?
Domain authority (DA) is different from marketing authority. DA is a search engine ranking score developed by Moz, a maker of SEO software and an early pioneer in the field.
DA uses a 100-point-scale to predict how well a website will rank on search engines. DA can be used to compare one site to another or to track your website’s performance over time. A higher number means that your site will show up higher on a search engine results page (SERP). It also reflects your dealership’s credibility.
An important way to increase your DA is to have a large number of quality links both to your site and from your site to other sites. Analyzing the backlinks of your competition and improving yours can boost your DA. And while DA is not a Google ranking factor, a higher DA than your competitors does indicate that your site will place higher on a SERP than theirs will. Remember that you don’t need to score a DA of 100 – you only have to score higher than your competition to get better search results..
As marketing gets harder and more complex in an expanding digital landscape, are you leading the pack or are you a laggard?
The quality of your digital marketing performance is directly related to the quality of your dealership’s overall performance. The sheer complexity of dealing with the many aspects of digital marketing has permanently removed it from the realm of occasional oversight by someone whose primary responsibility is something else in your store.
If you do not have an in-house digital marketing specialist who has the ability to oversee all aspects of your business’ online marketing efforts, you had better get one – or engage a digital agency to handle this multifaceted and essential area. It’s time to decide whether you prefer to be a leader as opposed to a laggard in this high-speed race!
Can you meet the expectations of today’s Amazon buyers?
Amazon and the COVID pandemic have created a more evolved consumer, one with higher expectations of the brands and the people they buy from. Amazon Prime features a pleasurable buying experience combining a trouble-free purchasing process with free and easy returns. It’s all designed to ensure that customers can buy things the way they want to buy them. In view of this trend, is your dealership developing and evolving the sales process, for both service and sales, to adapt to the higher expectations of the increasing numbers of Amazon customers?
Amazon has set the bar for what the buying experience should be
It’s a fact – online purchasing is becoming part of automotive retailing. Consumers who learned to rely on Amazon and other online retailers as their pandemic lifeline have come to appreciate and value the ease of shopping for and buying all types of merchandise from their homes.
Translating this to automotive retailing, it’s not necessarily about letting all customers buy their vehicles completely online. Rather, it all revolves around providing customers with a positive and seamless buying experience, both online and in the showroom, to whatever extent each customer requires.
Upgrade your online (and offline) sales experience
Many tech-savvy and EV-focused customers would consider a totally online purchase, while most mainstream consumers still want to test drive vehicles and see them “in the metal” before making their final buying decision. Why not give both types of buyers what they want, with online-enabled services such as:
- Robust research capabilities built into your website
- Complete and transparent pricing information
- Secure online credit application
- F&I information and options presented as part of pricing
- Test drives at the customer’s home or workplace
- Final delivery (and any remaining paperwork) at the customer’s home
Supplement these services with a chatbot connected to live chat, so that any questions from the customer can be answered as they move through the process. If consumers visit your showroom at any point during the process, your sales staff should act as advisors and not closers, providing needed information in a friendly and non-threatening way. This is a great way to engage customers and build an in-person relationship.
Whichever parts of the buying journey that each customer chooses to do online vs. offline, you must be prepared to enable each process as smoothly and easily as the typical Amazon customer would expect.
Make F&I part of the solution
Your customers have decided: 66% of them would rather get price quotes and financing online. It’s time to adapt and use this trend to your dealership’s advantage. It’s about transparency and presenting all the options to consumers.
Consider the opportunities here:
- Upselling to a higher trim level vehicle with more luxury and safety equipment
- Presenting an unbundled menu of products and services that can protect and enhance the customer’s vehicle investment
- Optional items that can reduce future service expenses
Once again, it’s time for your F&I staff to wear their friendly advisor hats, answering any questions honestly and completely. Needless to say, the F&I products you sell should reflect this high ethical standard – if they don’t, your customers will find out and tell everyone on their social media feeds.
Upgrade your service experience
For consumers, servicing their vehicles after the sale can be a major pain point. The scheduling, the inconvenience, and the time spent waiting can quickly destroy any goodwill that had been built up during your carefully cultivated sales experience. You can make the service experience a much more positive one by using technology to your (and the customer’s) advantage:
- Let customers schedule appointments online
- Stay in touch with customers via text messaging
- Offer ride-share services to get customers to work or home
- Add pick-up and drop-off services to improve convenience and efficiency
- Offer same-day or next-day appointments for routine service procedures
- Provide online invoicing and payment options to prevent lines at the cashier
Focus on these trends to increase their value of your dealership
By focusing on and maximizing your dealership’s EV readiness, marketing authority, and appeal to Amazon buyers, you can be several steps ahead of your competitors – both in your everyday operations and when it comes time to sell.
DCG Acquisitions will make your dealership buy or sell transaction a very user-friendly experience
DCG is one of the country’s leading, and fastest-growing, automotive M&A firms. Our network of connections with automotive manufacturers, financial lenders, dealership buyers and sellers, and other key players lets us deliver a qualified, competitive environment on both sides of the transaction.
Contact DCG Acquisitions to speak directly with an Automotive M&A specialist and learn how our expertise can help you get the most out of your next dealership purchase or sale.