Dealers Learn Good Lessons in Bad Years

Auto dealers don’t want to relive the rotten sales years of 2008 and 2009, but they learned some valuable lessons then, says Alex Vetter, Cars.com’s senior vice president-advertising.

The hard times revealed operational inefficiencies that subsequently were corrected by dealerships fighting to survive. “It was an experience that exposed process gaps, such as people often not being held accountable,” he says.

For example, some dealerships failed to properly track how quickly employees answered emails or returned phone calls from prospective buyers. 

Times are better now for dealers who are seeing healthy profits as the auto industry recovers, Vetter notes. “But I hope dealers don’t forget that when things turned south, the ones who had processes in place fared better.”

He discusses that, social media, dealer reviews, car shoppers’ increased use of mobile devices and other topics during a WardsAuto webinar entitled “Keep Your Dealership Ahead of the Curve.”

Social media has become a big part of how dealers and auto makers connect with customers. But it isn’t as mystical as some people may think.

“In the auto business, it is word-of-mouth marketing,” Vetter says. “It is not really a selling environment.”

The best way for a dealership to participate in social media is to make it a group effort involving several staffers, he says.

“Some dealers started with a fear of social media, thinking, ‘Let’s shut down Facebook access so employees are not wasting time,” he says. The conventional wisdom then shifted to the notion that the dealership should assign one person to the store’s social-media activity.

“I think the best way is to involve everyone, rather than pigeonhole it or put it on one person’s back,” Vetter says. “Dealers who use it say it helps with customer retention and fixed operations.”

Some dealers worry about getting in trouble if an employee says something too bold or offensive when interacting with customers online.

“We’ve seen lot of dealerships kick out the 20-page social-media policy,” Vetter says. “The average employee doesn’t pay attention to something like that. What works better is coaching, educating and moderating to make sure there isn’t a problem.

“Our experience is that shutting employees off from social media is like saying, ‘We don’t want you to tell people what is going on here, so we’re going to gag you.’”

Reputation management has moved to the forefront, as dealers seek ways to foster good reviews and avoid bad ones on the rating websites so prevalent today.

But dealers who do the right thing need not worry about getting pinned with a bad reputation, Vetter says. “(College basketball coach) John Wooden said, ‘You should be more concerned with your character than your reputation.’

“If you are a dealer, or any business, and you have more angry customers than positive ones, you have greater problems than your Facebook page. It is not about social media, but how you are running your operation.”

Despite some lingering stereotypes, most dealers enjoy a good reputation among consumers.

“The vast majority of dealer reviews on Cars.com are positive, four stars or higher,” Vetter says. “We tend to talk about the disgruntled customers and how things can go bad, but most people leave a dealership satisfied.

“Dealers should tap into that. Dealers who run quality operations are not afraid of reviews.”

Nor should they recoil if a customer sitting across the desk pulls out a mobile device to check on car prices elsewhere.

“Progressive dealers outfit their staffs with iPads. If a customer says he saw a car elsewhere online, that is fine. Go online with them. That’s better than the customer leaving.”

About 30% of automotive sales traffic originates from people using mobile devices to visit dealership or third-party websites.

“Mobile is another area where people are going to have information,” Vetter says. “Don’t view it as a disadvantage. Embrace it. If dealers are transparent about pricing, there is nothing to hide from.”

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