It's no secret that franchised auto dealers of all stripes and sizes have come to realize something may be fundamentally wrong with some of the ways this industry has done business.
So it's telling that many of the experiments to find better models for new-vehicle sales revolve around concepts that some dealers have found difficult to embrace: transparency, honesty and expediency.
Asbury Automotive, the nation's seventh-largest dealership group, is the latest heavyweight to try a new approach.
At a dealership in North Carolina, Asbury piloted an attempt to speed up and improve the sales process, clear out bottlenecks in the finance and insurance department and reinvent write-up procedures in service and parts — all using technology.
After rethinking the business for at least a decade, the publicly owned company plans to gradually spread new methods across its 88-store chain, starting in 2020. As part of the effort, Asbury will adjust compensation packages — putting some traditionally commissioned sales positions on salary, for example.
Toyota, too, is experimenting. Some of its concepts will allow customers to more broadly use their own computer research in the sales process by allowing them to get accurate payment information and prequalify for financing before they ever set foot in a dealership. Other automakers, dealers and retail groups are either running their own experiments or watching closely those underway elsewhere.
What's driving the experimentation is the realization that a lot of trend lines don't look good for the incumbent franchised-dealership business model. Sale of the core product — the passenger car — doesn't deliver sufficient profit, if any.
Meanwhile, the cost of technology and data security is growing, while an influx of battery-electric vehicles threatens to undermine the service business that pays most of the bills.
There can be myriad reasons why an individual dealer might struggle with profitability. But the first step in getting ahead is to recognize that, thanks to the Internet, the majority of their customers are now smarter shoppers with far more leverage and bargaining power than they possessed even five years ago.
Dealers no longer compete geographically, but nationally. They no longer have the luxury of treating customers as captives in their F&I offices or service lanes. Consumers who are mistreated in some way, or who feel disrespected by an interaction with a careless employee, can harm a store's reputation in an instant.
Transparency, honesty and expediency are the keys to increased customer satisfaction.
Treat customers better. Let them see behind the curtain on pricing. Respect their time and their knowledge. Never, ever lie.
Auto dealers who follow these rules stand out now. And if today's experiments turn into standard operating practices, those retailers will stand a much better chance of surviving tomorrow.