Internet Sales Departments will become extinct.
Yes, I said it. That’s my
prediction.
The reasoning
behind that prediction is an extrapolation of industry trends and
consumer shopping habits. We’ve all seen the trends.
A) As time passes, more and
more consumers will start (and maybe even complete) their vehicle
purchases online. The natural result of that increase in behavior is
that a higher and higher percentage of any dealership’s sales will be
generated through their internet departments.
B) Right now, “good”
internet departments account for anywhere from 30-40% of a dealerships
business. “Great” internet departments can easily generate half (or
more) of the sales within a retail sales department.
If the current level of
consumer internet shopping generates 30-50% of dealerships sales, the
logical conclusion is that as (A) increases, so will (B).
So,
how do these factors support my prediction?
We all know that
people in retail automotive positions work hard. Crazy hard. They work
long hours and, generally, make good money. Of course, there are
exceptions to this rule but chances are that at some point in their
career – they worked a lot. Why do they work a lot? In general,
customers are not loyal to a salesperson. You can give them every
different way possible to contact you and do your best to reinforce that
you will be there whenever they are ready to buy and build great
rapport with them and they will still come in and buy a car from someone
else.
How many of you have experienced this? You come back from
your day(s) off just to find that your customer bought a vehicle. Isn’t
that frustrating? What does that make you do? Work harder.
Now,
every dealership has “normal” salespeople. What I mean by that is that
they work the “floor” and do not handle any internet leads. Typically,
the “retail” sales departments have antagonistic relationships with the
“internet” sales departments. They are run separately and, in most
dealerships, there is a clear divide between the two departments. Not in
all cases, mind you, just in general. They’re fighting over customers.
They’re fighting over deals. The sales managers tend to protect the
“floor”. The internet department is viewed as giving cars away and on,
and on. Animosity exists between the two groups.
So, now we have
two groups of people. Both groups are in sales. Both groups work hard.
Both groups make decent money.
As this increase in consumer
buying habits continues to shift towards the internet and the percentage
of sales within a dealership shift to the internet departments, this,
by necessity, decreases the sales within the “retail” sales department.
Dealerships are continually expanding their internet departments to
accommodate this shift. They have been shifting their advertising
dollars to capture these shoppers. Traditional advertising is declining.
We all preach this. We all tell dealers this is the future. Some
listen. Some don’t.
So, now we still have two groups of people.
Both groups are in sales. Both groups work hard. Both groups make decent
money. The dealership is shifting its advertising money to internet
sources. This, in turn, drives more traffic to their internet
departments creating the need for expansion, which, in turn, prompts the
dealership to spend more money to generate more traffic to its internet
departments.
Where does this leave the “retail” group?
As
this shift continues, and a higher and higher percentage of the total
sales volume is funneling through internet departments, the logical
conclusion is that less sales are being generated by the “retail” sales
departments. So now, the members of this second group, who are still in
sales and work hard, don’t make as “decent” of money. The reward for
that hard work diminishes. This will contribute to a
higher turnover of “retail” or floor salespeople.
However, there
is an absolute need for retail salespeople. Customers still like to
shop in person. They still like to touch and feel the cars. They still
need to test drive vehicles. They still need to actually go into the
dealerships to do this regardless of how they originally started their
car shopping.
So, now we have a dilemma. How do we accommodate
the consumer when our second group whose sole purpose is to accommodate
these consumers, is diminishing because they are working hard and being
rewarded less.
The end result, out of necessity, will be a
merging of the two groups. You need people who can handle the internet
customer and you need people who are physically at your dealership ready
to meet and greet, find needs and wants, land them on a vehicle and
take them for a test drive. The dealership of the future will not have
“internet” sales departments, they will just have sales departments.
Every sales person will be responsible for not only handling floor
traffic, but also handling internet customers. This means, of course,
that every salesperson will have to be trained and have the skill set to
do this.
This merging creates one group of people. All of them
are in sales. All of them work hard. All of them make decent money.
Consumers continue to shift towards the internet but 100% of the sales
are In your “retail” sales departments. Just as in the past, everyone
has an equal opportunity to make a sale. Your eagles will still soar and
your dead weight will still sink but your dealership will be whole. No
longer will there be two groups of people. No longer will your sales
managers resent your internet departments. No longer will your
salespeople fight over customers (or deals).
Most retail sales
departments spend more time with each other than they do their families.
Their co-workers become their extended families. Is yours
dysfunctional?
With a single change of mentality and some
training, your dealership can become whole.
It’s going to happen.
It’s already happening.
Is your dealership ready?
