A new study reveals a potential starting point for dealers who are just now dipping their toes in the digital waters.

By Gregory Arroyo

I recall a conversation I had with an industry attorney during the early days of digital retailing. Technology vendors believed the Digital Age had arrived, while dealers were saying, “Not so fast.” My question to my attorney friend was, “What’s the holdup.”

He said the problem is dealers aren’t treating digital retailing as an experience — that customers should be rewarded for taking that path to purchase. He suggested that dealerships with separate facilities for fleet sales should consider directing digital buyers there vs. the showroom.

He then relayed his recent experience purchasing his second vehicle from the same dealership. He called the store, explained that he was a willing buyer who simply wanted to update to a newer model, and negotiated the deal over the phone. Expecting the red-carpet treatment for essentially being a rollover, he felt disappointed when he discovered he’d have to wait like the other customers in front of him.

That conversation came to mind when I came across Urban Science’s “Around the Bend: How COVID-19 Impacts the Next Normal for Dealers,” a report based on an online poll of 1,506 adult consumers. It serves as an update to the firm’s August 2019 report, which served as a reality check for digital retailing.

The 2019 study, which included responses from 2,001 consumers, concluded that car buyers weren’t ready to ditch the dealership experience because they still want to kick the tires and take a test-drive. Respondents also said they still needed someone at the dealership to guide them through the process.

I wrote about why I think that represents an opportunity for digital retailing in an April 2020 blog entry, “Digital Retailing’s True Test.” However, I’d like to share an even greater opportunity revealed in this year’s updated study.

See, while the report did show that a majority of consumers still believe buying a car is too big of an investment not to see (81%) or test-drive (79%), it did show that 67% would be more open to buying online if it was a brand or dealership with which they were already familiar.

Again, my convo with my attorney friend came to mind, but so did a discussion I had with a DealerSocket Strategic Growth Manager. He said the main reason some dealers fail to realize the full potential of data mining is because they don’t have a dedicated process. Well, based on that stat from Urban Science, maybe a digital retailing represents a missing link.

Take those data-mining campaigns targeting customers approaching the end of their lease or who qualify for smart payment offers. The emails could contain links to a landing page that explains your offer and a link to a streamlined buying process powered by your digital retail tool.

Back in April, another DealerSocket Strategic Growth Manager told me about a Pennsylvania-based dealer group that was rewarded for having a service-drive sales process when the pandemic forced local officials to limit dealers there to appointment-only sales that concluded with service-drive deliveries.

Before the pandemic, the process delivered 100 units a month behind two dedicated salespeople, a sales manager, and an F&I manager, who actually has a dedicated desk (with enough privacy) in the service area. The reason for that is the group wanted that buying experience to feel different and free of pressure.

The group equips the sales team with its inventory management tool’s mobile app (Inventory+) to feed appraisers with scanned VINs and photos of every car that comes into service. The appraisers then prepare a package that includes a vehicle history report, documentation on the vehicle’s going price in the local market, its fair Kelley Blue Book value, a check voucher for an amount over that value, and the salesperson’s business card.

Signage in the service drive lets customers know they can get a free vehicle evaluation by texting a specific number or talking to their service advisor. All customers get an appraisal, but the hand-raisers represent high-value targets the sales team engages.

However, even customers who don’t bite get the appraisal package. They also get enrolled into a CRM-powered campaign that includes email and a phone call — the latter scheduled for the day after the customer’s service visit to ensure satisfaction and to revisit the offer sheet.

I can see three potential opportunities in that process for digital retailing to have an impact. Maybe it’s a kiosk in the service area loaded with a digital retail tool like DealerSocket’s PrecisePrice; perhaps it’s tablets. Whatever the case, digital retail should be a part of those follow-up efforts, whether it’s a link in an email or guiding customers through the process over the phone and emailing a link to their PrecisePrice deal.

And just maybe that buyer’s journey you create in the service drive serves as the entrance for sales opportunities your data-mining efforts generate.

While 93% of respondents to the Urban Science study expressed some concern with an entirely online purchase process, more than two-thirds said they were comfortable shopping online, signing paperwork digitally, and negotiating price and terms via email, chat, or phone.

Recently, the individual leading the digital drive for one of the largest privately-owned dealer groups in the United States addressed DealerSocket employees over a Zoom call. He talked about COVID-19’s impact, inventory shortages, the group’s efforts to build that clicks-to-bricks experience, and how consumers still need to be educated on what digital retailing is. What caught my attention was his response to whether he believed consumers still want the showroom experience.

“Absolutely … Only a small group of individuals want the Carvana model, and we’re going to be there,” he said. “But most customers want to step foot in a brick-and-mortar shop. If they want to get their payment, we’ll do that and meet them in the showroom.

“So, we believe a critical point in that process is that showroom experience,” he added. “You shouldn’t lose a customer who completed things online because you told them it would take 45 minutes, but it takes us three hours.”

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ARLINGTON, Texas, June 9, 2020 — Agora Data, Inc. (Agora), a provider of data, analytics and liquidity solutions for the buy-here, pay-here segment of the automotive industry, announces its integration with DealerSocket’s web-based IDMS. This integration will increase dealer visibility into portfolio and loan performance, as well as create access to much-needed capital and cashflow. The addition of DealerSocket further expands the number of Agora integrated DMS partnerships.

“Access to reliable analytics is the difference between success and failure in today’s market,” stated Agora founder and CEO Steve Burke. “Trying to run a business without all of the information is like trying to build a puzzle without knowing what the picture is — it’s possible, but far more difficult.”

AgoraInsights is Agora’s first of its kind portfolio and loan valuation analytics. It empowers BHPH dealers to manage more effectively their most significant asset, their loan portfolio, and confidently manage liquidity negotiations. By combining this technology with DealerSocket’s innovative IDMS, dealers will now have a more holistic picture and greater control of their business operations.

Historically, auto dealers have relied on “book value” guides to buy and sell vehicles. Now, BHPH dealers can leverage AgoraInsights to understand the current value of their loans. Additionally, they gain the ability to compare their underwriting strategies with their industry peers through Agora’s benchmarking analytics.

“The partnership with Agora’s Insights platform provides incredible opportunities for our dealers to be empowered to better manage their business. More importantly, they gain access to capital through various finance channels,” said Jeff McCurry, DealerSocket’s vice president of product. “Agora’s program is one of a kind and is an exciting addition to the IDMS platform.”

About Agora Data, Inc.
Founded by industry veterans, Agora Data, Inc. is an Arlington, Texas-based developer of AI-infused financial services software and solutions. Agora was launched in 2017 to improve the lives of every BHPH dealer in the industry, providing access to actionable industry information, robust portfolio analytics, and a reliable source of liquidity/capital. Agora has empowered a community of thousands of BHPH dealers across the nation. Visit AgoraData.com for more information.

Coast to Coast Motors, which operates seven buy-here, pay-here (BHPH) locations in the Houston, Oklahoma City, and Tulsa areas, was a Finance Express (FEX) holdover until making the switch to DealerSocket’s IDMS three years ago. In May, the 30-year-old, family-owned operation recorded one of its best months ever.

As CFO of Coast to Coast, Travis Allison leans heavily on IDMS’s reporting capabilities to accurately assess the group’s performance and month-to-date collections. He says the ability to delve deeper into the behind-the-scenes aspects of the multi-rooftop operation is IDMS’s biggest advantage.

“I rely on IDMS’s API to transfer a massive amount of data from IDMS to our third-party data software, so the ability to tap into IDMS remotely behind the scenes has been a huge benefit to me,” Allison notes.

Coast to Coast’s employees especially benefit from the system’s ease of use, robust training, and dependability. Allison also credits DealerSocket’s exemplary customer service and personal touch for the group’s strong partnership with the software provider.

“Having a great product is one thing, but I also need customer service when it comes to my software vendors,” Allison says. “I work with our Customer Success Manager, Anthony Wright, all the time, and he’s always willing to pick up the phone when we need assistance and help us move the needle when it comes to the level of integration and connectivity we need.”

Allison wasn’t around during the FEX days, but he says his team considers IDMS a huge upgrade. That’s why he encourages other independent and BHPH dealers on FEX DMS to consider making the same switch.

“For dealers looking for a dealership management system that coordinates their service, their collections, and their sales all in one area, IDMS is definitely the way to go,” Allison says. “It allows us to have an omnichannel approach to our business, and if your DMS can’t provide that, you ought to look at IDMS.”

Discovery Auto Sales is a single-point, buy-here, pay-here (BHPH) dealership located in Austin, Texas. The dealerships recently made the switch to DealerSocket’s IDMS from Finance Express last year. Since taking the leap, Discovery Auto Sales has leaned heavily on IDMS’s Account Management product to drive its collections process. 

As the General Manager of Zeus Financial Services — the dealership’s in-house finance company — Angela Paez needs a software system that makes her collectors’ job easier and provides the data she needs to assess performance. To that end, Paez puts her trust and reliance in IDMS. 

“We use IDMS to generate a bunch of reports on a weekly and daily basis to look for various trends, track the percentage of delinquent payments, and calculate commissions for the collectors,” Paez says 

She also notes that IDMS’s integration with Sigma Payment Solutions has made it much easier for the dealership to collect payments and provide more flexible payment options to customers. “It’s enabled our customers to make a payment via text or on our website without our collectors having to be a middleman,” Paez says. 

This capability was particularly beneficial to Discovery Auto Sales and Zeus Financial during the peak of the COVID-19 pandemic. Though its doors were closed to the public, payments kept coming in. 

“That was something that gave me a lot of peace of mind,” Paez says. “I didn’t have to have a collector sitting in a chair just to take payments. Our customers were able to make payments on their own, and we were still able to generate revenue for the company.” 

The success the dealership and its finance company experienced during the first year on IDMS is why Paez encourages other dealerships in her 20 Group to make the switch.  

“All of the information that’s available within the system can be overwhelming at first,” she says. “But you get used to it quickly. IDMS is a worthy investment for any BHPH dealer looking to simplify their collections process.”