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.”

We continue to think about all of you, our customers and partners, during this difficult time. This pandemic has caused deep challenges across our industry and for all of us, and I hope you know that DealerSocket continues to be here for our dealers. Our goal has been to strike the right balance between being prepared for our dealers and the market when our industry recovers and offering discounts to help our dealers as much as possible during this difficult time. 

We will get through this, and we will get through this together. We are committed to fighting through this with you. We are beginning to see the first signs of positive trends as we climb out of the depths of the COVID-19 pandemic, and this has us all hopeful for the future.

In April, we heavily discounted our software for our dealers. In addition to our discounts in April, we have decided to offer the following DealerSocket billing reductions for May for all of our dealers:

We have already sent out our May invoices, so next week you will receive a credit memo for the above discounts. With that said, similar to our discount package last month, there are some basic qualifying terms listed below.

In addition to these discounts in April and May, DealerSocket continues to offer our customers several promotions and free months of certain software products to help you navigate this crisis. Our offers include promotions for:

Since we are adding promotions and various resources for dealers often, please view DealerSocket’s latest information by clicking here, and, as always, please feel free to reach out to your Customer Success Manager with any questions or if we can help in any way:

If you are not yet an Auto/Mate DMS customer, I hope you know that we can reduce your DMS bill significantly during these challenging times as well as into the future by switching to Auto/Mate DMS. We have several bundled packages that include our Auto/Mate DMS product combined with other DealerSocket products to support you.

Thank you for partnering with DealerSocket. I hope you know how much we value and appreciate your loyalty, partnership, and your business.

I wish you, your families, and your team members health in these unprecedented times.

Sejal Pietrzak
CEO and President
DealerSocket
sejal@dealersocket.com

 

Details regarding our COVID-19 relief package:

We’re excited to announce that Steve Zadoorian and Dave Druzynski have both taken on new, expanded roles at DealerSocket! In their new positions, Steve and Dave will ensure that DealerSocket and Auto/Mate customers and employees continue to benefit from an emphasis on customer support and company culture.

Steve Zadoorian

Steve Zadoorian has been named Senior VP Operations and Customer Care at DealerSocket. In his new role, Steve will lead the Installations and Customer Support teams for both DealerSocket and Auto/Mate. Under Steve’s leadership, Auto/Mate achieved a customer retention rate above 95 percent and has received multiple consecutive DrivingSales Dealer Satisfaction awards. Steve’s commitment to customer satisfaction has also helped to build Auto/Mate’s Net Promoter Score (NPS) to +59, a score that’s nearly double the software industry average of +31.

“My first goal is to integrate the support service teams so we have a common process; and also make sure we have a well-integrated and cohesive implementation process for new clients,” said Steve. “I look forward to bringing our teams and best practices together and ensuring that our customers remain highly satisfied.

Dave Druzynski has been named Vice President, People and Culture at DealerSocket.

Dave Druzynski

In his new role, Dave will oversee the development of company culture and employee satisfaction. Under Dave’s leadership, Auto/Mate has received ten consecutive “Best Place to Work” awards by the Albany Business Review, and nine consecutive “Top Workplaces” awards by The Times Union.

“Employee happiness has always been a high priority at Auto/Mate and I am thrilled to work with the DealerSocket team who shares that same belief. Rather than just have one company’s culture consume the other, we plan to identify the best aspects of both cultures and merge them together as one team,” said Dave.

Dave and Steve will continue to operate from DealerSocket’s Albany, NY office.

With threat actors working overtime, DealerSocket’s head of information security offers three tips to keep your dealership’s and your customers’ data protected.

By Gregory Arroyo

Greg Tatum has a warning for dealerships everywhere: Cyber threat actors are working overtime. Noting a definite uptick in suspicious activity since COVID-19 hit Europe in late February, he adds:

“Threat actors are actively searching for new targets through a number of different mediums. Things like social media platforms are a very popular target for information gathering that can be used in an attack.”

Tatum serves as DealerSocket’s head of information security. He joined DealerSocket nearly four years ago from a security services firm that works with companies in much more sensitive environments than automotive. I’m talking about healthcare and government contractors, sectors that see billions of attacks each year. So, yeah, we have the right guy on the job.

“DealerSocket spends a considerable amount of effort protecting our customers’ data,” he notes. “It’s part of what we do just to make sure our customers’ customers’ data is protected.”

Tatum isn’t the only one sounding the alarm. The FBI issued its own warning on March 20, noting that scammers are leveraging the COVID-19 pandemic to steal money, personal information, or both.

 

 

Just last week, the National Automobile Dealers Association reported that attackers are now putting up COVID-19-related websites that prompt visitors to download an application to receive COVID-19 updates. But you don’t need to download the app, as the site installs a malicious binary file as you contemplate whether you should.

The attack method uses AZORult, software that originated in Russia approximately four years ago to steal data and infect the breached computer with malware.

Tatum also alerted me to a new phishing campaign that pretends to be from a local hospital notifying recipients that they have been exposed to the Coronavirus and they need to be tested.

But it’s not just phishing and ransomware attacks. Business email compromise, or BEC, is also on the rise. That’s when a cyberthief breaks into a legitimate corporate email account and impersonates an employee to get the business, its partners, or other employees to send money or sensitive data to the attacker.

“In this climate we live in today, this is part of business,” Tatum says. “This is part of what we have to deal with as consumers of technology.”

Tatum, by the way, is available to help. He advises DealerSocket customers to contact their Customer Success Managers to get connected. In the meantime, he offers the following four tips to safeguard your organization and your customers’ data:

1. Stay Committed to General Security Awareness

The following is general security etiquette your teams should employ:

2. Separate Work and Personal Data

Use company-issued computers and mobile devices for work purposes only. If you don’t have a company-issued device, be sure to check your company’s policies about using personal devices to access your organization’s data or networks.

Additionally, consider creating separate user accounts. Never use your work email for personal reasons or vice-versa. This segregation helps the company maintain the confidentiality of the data it collects and helps you maintain your privacy.

3. Secure Your Home Network

Update your router’s username and password immediately and use a strong, unique password. And never use the same password for your network and your router. Note that most routers ship with default login credentials that are public knowledge.

4. Don’t Forget About Physical Security

The comfort of your own home is no reason to forget about physical security. Simple acts like keeping doors locked and not leaving mobile devices unattended in a vehicle are non-technical ways to improve security.

Gregory Arroyo is the former editor of “F&I and Showroom” and “Auto Dealer Today” magazines. He now serves as senior manager of strategic content for DealerSocket. Email him at garroyo@dealersocket.com.