AutoPoint Blog

New Study Says Dealerships Do Better with Technology

Posted by Hilary Biggart Tuesday, December 01, 2015

Auto dealerships are traditional places. While vehicles change and become more and more complex every year, the processes dealerships use to sell, service, and title those vehicles has remained much the same for decades. Paper inspection checklists, handwritten price quotes, and dot matrix printers dominate the dealership landscape. And so what? Your tried and true tools have always worked for you, right?

Not according to a new study from J.D. Power. The study found that auto dealers who accept and implement cutting-edge technology deliver a better sales experience than their traditional counterparts. The results apply to both premium and non-premium brands alike. The study claims dealerships who resist technology run the risk of being left behind by competitors. So if you’ve been holding onto your handwritten quotes and analog inspections, thinking you’re doing just fine, you might want to think again.

The J.D. Power study identified several key factors driving dealerships’ technology integration:

Young drivers are a crucial sales demographic.

The average vehicle age has reached an all-time high of 11.5 years (IHS Automotive). Yet despite these longer lifespans, vehicle sales are at a 10-year high (Bloomberg). Cars, trucks, and SUVs are flying off the lots and into the hands of . . . young people.

The J.D. Power study claims Generation Y, also known as millennials, is the “single most impactful generation” when it comes to auto sales. They account for 29% of new vehicle sales, and more than anything, this generation demands technological competence. They buy numerous goods and services online and they trust words on a screen more than anything your salespeople can say.

If you want to engage these young drivers and claim their business before a more tech-savvy competitor gets there first, you need the right tools.

Tablets improve the sales experience.

Tablets are the perfect dealership tools for millennial engagement. They do everything from present your inventory to streamline your service processes. The J.D. Power study found that dealerships who use tablets during the sales process to present pricing, display vehicle details, and record customer preferences saw a 16% increase in customer satisfaction.

Dealerships who didn’t use tablets not only delivered a less satisfying sales experience—they also had a negative impact depending on how they presented pricing. The study found dealerships who gave customers handwritten price quotes negatively impacted customer satisfaction, as opposed to alternative presentations.

Especially for millennial customers, handwritten price quotes play into the pushy sales image dealerships have been fighting for years. Modern drivers are simply more likely to trust a screen than a salesperson.

F&I products look better on a screen.

The extended warranty lives on. J.D. Power found millennial drivers are just as interested in vehicle protection plans as their parents. However, they want their options presented digitally. The study found that, in general, customers had a more satisfying sales experience when they were given the option of buying prepaid maintenance plans, extended warranties, and hazard protection than when they didn’t hear these offers. And customers had an even better experience when their F&I advisor presented these plans on a desktop computer or tablet.

Printouts, handwritten quotes, verbal descriptions—the screen has them all beat. Similar to digital price quotes, millennials see screens as objectively trustworthy sources. F&I products look more appealing when a tablet recommends them.

Electronic communication eases sales pressure.

According to J.D. Power, the five most important customer satisfaction KPIs involve making the customer feel comfortable. If you can give your customers a safe, low-pressure, empowering sales environment where they feel in control of their own experience, you’ll have a huge advantage over your competition. And technology is perfectly positioned to help you do this.

Tablets and desktops automatically diffuse the sales situation. Customers feel they have all the information they need in front of them, and they don’t have to worry about salespeople withholding vital details in the name of making a deal. These practices improve the customer’s sales experience as well as increase loyalty, making it more likely your customers will choose you for this new vehicle and their next.

Technology is not replacing people. You still need a stellar sales staff and good buying incentives on your side. But with the right technology in hand, you stand to put yourself far ahead of the competition—especially over the next 3-5 years, as things like tablets and apps become even more expected. Conversely, if you resist the digital wave, you risk being trounced by more tech-savvy challengers.

In our next blog, we’ll go over specific ways you can use the information from the J.D. Power study, and today’s innovative technology tools, to improve your dealership’s sales and service processes and increase customer loyalty and retention. Stay tuned!


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