Sonic targets 1-price, 45-minute transactions
Dyke: It should not take hours.
Editor’s note: This story is part of a series on dealerships striving to cut new-vehicle sales transaction times. Part 2 of the 2-part series will be published in the June 23, 2014, edition of Automotive News.
Sonic Automotive Inc. is spending tens of millions of dollars to transform the experience customers have buying vehicles in the company's dealerships. At the heart of the overhaul: Getting buyers in and out the door faster.
"We have to speed it up," Jeff Dyke, Sonic's executive vice president of operations, has said. "It should not take two hours or three hours to buy a car. If I walk into any other retailer in this world other than [those] selling cars, I can walk in and buy a pair of shoes and leave."
Sonic will launch its One Sonic-One Experience initiative at a Toyota store in Charlotte, N.C., in July. Executives envision that a customer will be able to complete a vehicle purchase in 45 minutes or less from the point the car or truck has been selected. The transaction will be handled by one Sonic employee from beginning to end with the help of an iPad.
Using iPads with accompanying software and keeping the transition with one associate are key steps. But the biggest enabler to the transaction time goal just may be the end of price negotiations. Sonic's 105 stores will go to a one-price sales model with the change.
"We just don't [want] negotiations going back and forth and all that crap," Dyke said. "We want to get out of all that. We don't see the need for it, and neither does the consumer."
After the bugs are worked out at the Toyota store, Sonic plans to spread One Sonic-One Experience to its other Charlotte stores, likely before the end of this year. Then it aims to launch the program to the rest of its dealerships in 2015, though executives acknowledge the rollout could last into 2016.
Sonic already has established what it calls its True Price model at its stores. Under that approach, vehicle prices are set within $300 of the bottom-line acceptable price. But that $300 wiggle room will go away under One Sonic-One Experience, Dyke says.
While that opens Sonic up to the risk that competitors will undercut it on price and poach customers, Sonic executives say they're not worried.
"Market share -- it's going to affect it all right," Dyke said. "It's going to go up."
That's because Sonic is promising to eliminate the pain points of car buying, even those that go beyond the time factor. And the company's advertising will position Sonic's approach -- the customer is in charge -- against the plaid-jacket-wearing image that has plagued auto retailing.
"Our bet is the consumer is going to say, 'Not only are we going to come buy from you, we'll actually maybe even pay you a little bit more because we don't want to go through all the bulls---," Dyke said.
A typical shopper today has to deal with a salesperson, sales manager, F&I person and probably several other people along the way, plus sign 40 or so pieces of paper to complete the purchase, Dyke said.
Dyke hasn't specified what Sonic's average transaction time is currently other than to say "we are a hell of a lot higher than that" 45-minute target. But he says that a retailer can't get to that goal without the processes and technology for one associate to take a customer through the entire purchase, including F&I and trade-ins.
CarMax is best in class in the industry, Dyke said.
"They are below an hour once you have made a decision on a car, and everybody else is in the back of the pack," he said.
While Sonic has made 45 minutes its target, "my internal benchmark is a hell of a lot faster than that, and it's going to make a big difference," Dyke said. "The consumer is going to have to at least consider purchasing a car at Sonic Automotive in the markets that we are in because of the experience. It's going to be that different."
Other retailers won't be able to follow Sonic quickly, Dyke asserted. It's taken Sonic the last seven years to develop its own applications and processes and to start changing the culture in the stores so that they're positioned to accept such changes, he said.
"Our competition can't wake up tomorrow and say, 'Well, we're going to do this, too," Dyke said.
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