Becky's blog

A Watershed Moment for the Auto Sales Industry

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TrueCar is ramping up the stakes in the battle for auto sales supremacy. In a recent announcement, it was revealed that TrueCar has entered into a partnership with Sam’s Club, bringing customers access to discounts from the online pricing website’s network of more than ten thousand authorized dealerships.

The collaboration, which will operate in a manner similar to TrueCar’s partnership with USAA, represents a bold move that will put Sam’s Club in head-to-head competition with the Costco Auto Program – a wildly successful, members-only service launched in the 80s by the wholesale giant. Up to this point, Costco’s rule in the direct auto sales market has gone unchallenged. The TrueCar-Sam’s Club partnership has changed that.
According to an official press release, the Sam’s Club auto program will also give used car purchasers a three-day return policy and access to a Buyer’s Bonus which will front customers as much as $2000 for car repair and service.

The Changing Face of the Auto Sales Industry
This announcement is a watershed moment for the automotive sales industry. Standing amid the convergence of online tech and traditional car sales are the brick and mortar establishments that still rely on word of mouth and walk-in customers to keep their doors open. How will this impact business for them? The answer to that question is obvious. And it just may cause legions of dealers to reexamine how they do business in the 21st century.
Without a doubt, the auto sales landscape has undergone dramatic upheaval in recent times – and announcements like the TrueCar-Sam’s Club partnership continue to affect changes that may soon render the industry unrecognizable. By all accounts, customers are flocking in droves to online platforms as a way of performing research and finding the best deals around.
The bad news is, these types of services are cutting deep into the profit margins of non-participating dealerships. The good news is, there’s still a chance for those dealerships to remain competitive, even in the light of such widespread disruption.
What Dealerships Can Do to Adapt
Charles Kettering, the famous American inventor and businessman, once said, “The world hates change, yet it is the only thing that has brought progress.” These are quite possibly the most accurate words ever spoken when it comes to describing the resistance exhibited by traditional auto dealers to enacting change. They also cut to the heart of why adopting change so is vital to remaining competitive in today’s vastly altered industry.

  • Have the vision to look beyond the status quo. Often, businesses do what they do for no other reason than “that’s the way it’s always been done.” Seldom do they go to the effort of reexamining their methodologies to determine if there is anything that can be done better. A willingness to do so is imperative if an auto dealership is to survive.

  • Use the Internet more smartly. Revamping existing websites from informational platforms to transactional platforms can capture customers who are simply browsing and who would otherwise not visit a given dealership.

  • Commit to improved relations by meeting customers on their terms. Implement dealership-wide change that focuses on determining a customer’s creditworthiness early in the game. This can cut extensive approval times dramatically and creates an atmosphere of collaboration that earns lifelong customers.

  • Invest in Finance and Insurance training. Even the greatest athletes in the world never stop training. Those dedicated to longevity and continued peak performance are always seeking out ways to better their game. Auto sales professionals are no different – and considering how quickly things change, it’s even more imperative that they brush up on techniques geared at maximizing profit and minimizing customer losses. F&I online training courses are a good alternative to paying the travel costs associated with sending dealership staff to seminars.

Perspective is everything. Some see headlines pronouncing the new era of online auto sales as a death knell. Others see it as an opportunity to adjust their trajectory. How dealerships react to disruptive change will determine if they’ll be among those left standing when the smoke clears. The Internet has forever changed the way that business is done. The time has come to embrace that change.