Think Fast

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Think Fast! Insights to Help You Move Your Dealership Faster Forward

Transcript of Think Fast

Page 1: Think Fast

Think Fast!

Insights to Help You Move Your Dealership Faster Forward™

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Purpose

Insightswithout actions are meaningless.

CDK understands tomorrow’s technology and is ready to discuss your options today.

Contact your CDK Sales Representative to learn how you can turn insights into profits.

Call888.424.6342

[email protected]

Visitcdkglobal.com

Table of ContentsCustomer Experience 4

Inventory Management 7

Digital Marketing 13

Collaboration 20

Finance & Insurance (F&I) 27

Fixed Operations 32

Mobility 38

Click the green dealership icons to learn which CDK solutions can help drive your dealership Faster Forward™

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Customer Experience

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Physical vs. Virtual

An online presence is essential for providing the quick and easy

information that your customers desire. However, it won’t completely

replace your brick-and-motor store.

Customers want to test drive vehicles and view options

Customers want to gather information on vehicles from a person

Customers need to service their vehicles

82% of buyers look to a Salesperson for information during the

research process

Shoppers count on dealers to make sense of everything they’ve

read and heard during their pre-buying research process

Customer Experience

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5

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Source: McKinsey & Co, Innovating Automotive Retail: Journey Towards a Customer-centric, Multiformat Sales and Service Network, 2013Source: Google, Digital Drives Auto Shopping, November 2013Source: CapGemini, Cars Online White Paper 2014

The faster you react to market changes and customer concerns, the easier it will be to outpace your competition.

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Car-buying is Emotional

Source: Service 360 Partners, 2013

Customer Experience

Empowering Salespeople to easily complete their assigned tasks via mobile apps allows them to better service your customers.

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Customers have emotional expectations when car shopping. They want to avoid frustration and stress, while feeling excited and special.

To help your customer …

Avoid Avoid feeling frustrated Feel excited Feel special feeling stressed

Your staff should be:

A good listener Helpful Helpful Honest

Responsive A good listener Proud of their A good listener customer service

Helpful Responsive Attentive Responsive

Attentive Attentive A good listener Patient

Patient Proud of their Honest Helpful customer service

To give your customers the best possible experience, you can meet a majority of their expectations by listening well, and being helpful, responsive and attentive.

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Inventory Management

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Turn Time is the Key to Profit

Do you realize that by turning your inventory 10 days faster, you can see up to a $200,000 increase in profit?

Look what 10 days can do for your profits:

average turn time

means your inventory flips

4.05times/year

90day

average turn time

means your inventory flips

4.65times/year

80day

average turn time

means your inventory flips

5.21times/year

70day

your profit could be

$1.8million

your profit could be

$2.0million

your profit could be

$2.3million

with profit of $1,500/unit on 300 cars

Source: CDK Business Intelligence, 2014

Inventory Managment

Make the right stocking decisions for your dealership based off historical success and current market data.

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17,500,000

17,000,000

16,500,000

16,000,000

15,500,000

15,000,000

14,500,000

14,000,000

13,500,000

13,000,0002012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

How Important is Your Inventory?

According to 200 senior executives from the world’s leading automotive companies, 75% believe that managing price and supply is the key factor in maximizing profitability, up from 40% a year ago.1

With an increase in sales forecasted over the next few years, now is your chance to maximize profit before sales level off.

New Car/New Light Trucks Sales Forecast2

Inventory Managment

14,5

01,2

48

15,6

05,6

41

16,4

44,6

16

16,7

25,3

36

17,0

45,6

99

17,2

89,5

41

17,1

42,0

36

17,0

12,7

94

16,9

27,1

81

6,87

3,69

4

16,7

99,5

95

16,7

82,8

17

16,7

80,0

20

16,7

49,9

85

16,5

74,8

65

New

Car

/New

Lig

ht T

ruck

s S

ales

1Source: KPMG, Global Automotive Executive Survey, 20142Source: IHS, Industry Analysis, 2014

Dealerships that can assess market data efficiently will be the ones that will capitalize on additional sales.

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One Small Error Could Cost You

The average OEM incentive is $2,293 and typical dealerships miss at least 1 per month. That means you could be missing out on around $27,516 per year, much more than the cost of a top-of-the-line inventory tool.

Your inventory solution should deliver even more value through features like accurate market pricing and competitive intelligence.

$27,516+Money you’re

missing out on from OEM incentives

per year

Source: NADA Data, 2014

Inventory Managment

Calculate and syndicate incentives and rebates automatically, so you can be confident in your pricing.

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Inventory Intelligence

Source: Agile Innovation Advisors, 2013Source: NADA Data 2013

Inventory Managment

New Car Managers need to know what customers want, stock the right vehicles, gain insight into competitors’ pricing, and be able to react quickly to market changes.

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In 2013, New Car profit dropped nearly 50% to $69 per new vehicle retailed.

In 2013, sales of new cars and light trucks went up 7.5% from the previous year.

50%

Profit of New Car

retail sales dropped

New car and light

truck sales increased

7.5%

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The Used Car Drought is Over

Dealerships are selling 5M more new vehicles per year than they did in 2009. This excess of new cars will create significant opportunities to source used cars. You need to be pickier about your inventory.

New Car Sales

16,000,000

14,000,000

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

2009 2010 2011 2012 2013

15,5

24,8

00

14,4

41,8

00

12,7

34,2

00

11,5

54,5

00

10,4

01,7

00

Source: NADA Data, 2014

Inventory Managment

The Used Car drought is over … having the ability to selectively make the right stocking decisions is critical.

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Digital Marketing

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Audience Targeting and Audience Management: The Key to Online Marketing and Sales Success

75%of shopping research is

done online1

60 vs.6of the

TOP

10 Targeting an audience and managing their

experience will result in more sales, and currently, 60% of online-influenced sales are from a

targeted audience3

40 %

1Source: Google/Millward Brown Digital, Influential Experiences, 20142Source: Google/Millward Brown Digital, Vehicle Shopper Path to Purchase study, 20133Source: CDK Business Intelligence, 2014

Digital Marketing

Ensure that your advertising is working for you by presenting your potential audience with the vehicles that are of interest to them.

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research sources for

auto shoppers are digital2

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More is Better

Optimizing multi-channel campaigns in real time – based on shopper engagement and downstream metrics – can lead to more sales.

To produce a sale, it takes 62 visitors from paid search or 19 visitors from ads on premium properties, but it only takes 13 visitors who have touched multiple channels.

62 19 13

Source: Automotive Moneyball – CDK Digital Marketing – July, 2014

Digital Marketing

Consistent branding and messaging is the key to getting your audience to recognize and remember you as the dealership to do business with.

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paid search visitors

premium ad visitors

multi-channel visitors

To make a sale, it takes

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Customers Love to Search and Research

Shoppers spend 70% of their online research time on dealer sites, OEM sites and research portals170%

Shoppers who visit both a dealer website and Edmunds.com are 4 times more likely to convert to a purchase than the average website visitor24x

1Source: Polk/AutoTrader, Automotive Buyer Influence Study, 20132Source: CDK/Edmunds cross-tier research study, 2014

Digital Marketing

Provide potential customers with the information they need to help them make informed decisions.

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Now You’re Getting Personal

Dealers can leverage audience intent to deliver a personalized, relevant experience.

Platforms such as Amazon, Spotify, Netflix, Yelp and Facebook use intelligent, predictive algorithms to match people with things they want.

Source: AdWeek, I Have Seen the Future of Advertising, 2014

Digital Marketing

Guide your audience to your dealership by segmenting the right information to the right customers.

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Don’t I Know You?Get to know your customers better. They come in 3 main categories:

Source: Agile Innovation Advisors, 2013

Digital Marketing

Knowing your customers will help you provide the right information to them at the right time in the buying process.

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Budget Conscious Group

(18% of your customers)

• Worst credit scores of the 3 groups

• Most do not consider themselves to be very knowledgeable about auto financing

• They have trust issues with auto financing information provided by dealerships

• They take a long time to complete the transaction and are not happy about it

Hassle Free Experiencers

(47% of your customers)

• Good/excellent credit scores

• They do their research and know about auto financing

• They trust dealership auto financing information

• They complete the transaction very fast and are very happy with it

Price Conscious Shoppers

(35% of your customers)

• Good/excellent credit scores

• They do not consider themselves to be very knowledgeable about auto financing

• They are a little less likely to trust dealership auto financing information than Hassle Free Experiencers

• They complete the transaction quickly and are relatively happy with it

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Build Trust Early and Often

Over 70% of vehicle shoppers are comfortable doing their own research about financing a vehicle, but 75% are willing to seek financing advice from your dealership. Gain their trust and customers are more likely to return to your dealership.

20% of consumers finance their vehicle purchases outside the dealership. A possible reason for this is 85% of consumers do not use your dealership website to learn about auto financing.

75%of vehicle shoppers are willing to seek financing

advice from your dealership

85%of consumers do not use your website to

learn about financing

Source: Agile Innovation Advisors, 2013

Digital Marketing

Throughout your customers’ research phase, provide information on the financing options you offer and their benefits.

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Collaboration

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What’s Your Name? What’s Your Name? What’s Your Name?

Dealerships ask customers to provide their information an average of 3.2 times

3.2x

Source: Google, Consumer Survey, 2014

Collaboration

Integration of your phone system, CRM, desking and menu solutions is critical to minimizing having to ask customers for their information over and over.

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Email is Out … Phone Leads are Back In

Phone leads are up 46% vs. Internet leads over the past 2 years. Phone calls have recently skyrocketed, while form leads have been relatively flat.

46%

Source: Automotive News, 2014

Collaboration

Investment in a robust, multi-functional phone system is more critical than ever to your dealership’s success.

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Phone Leads

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You Don’t Know What You’re Missing

Customers are doing most of their research online. They even click-to-call from their mobile phones to set appointments. These “sure things” are the most important calls to take … 16% of calls are missed.

of calls are missed

16%

Source: Marchex, Mobile Consumers are Calling, 2014

of dealerships don’t have insights into the

amount of missed calls

45%

A call reporting system that alerts you when calls are not being answered can help improve your CSI and increase sales.

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Collaboration

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Setting the Appointment is Critical … One and Done

In a survey of more than 1,000 dealers, the number of customer visits to the dealership for a vehicle purchase dropped from 5 visits to just 1.

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The number of customer visits to the dealership

is down to just

Source: Service 360 Report, 2013

Top 3 critical connections for phone calls: 1) Routing the customer to the right person (who is available), 2) The ability to easily view their customer profile, and 3) Pulling customer information directly from the call into the related task.

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Collaboration

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The Answer May be in Your Pocket

Texting is quickly becoming the new way to contact customers.

of Sales Reps text customers at least

once per day

60%

Source: CDK Business Intelligence, 2013

Collaboration

Give your employees texting capabilities with your dealership phone number instead of their personal cell phone numbers.

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Finance & Insurance (F&I)

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Holding Pattern

According to F&I employees, the main causes (almost 60%) of “held offerings” are paperwork errors, such as missing forms, misalignments, improper calculations or missing signatures.

Source: CDK Business Intelligence, 2014

Finance & Insurance

Align your desking and menu solutions electronically in order to reduce errors and provide a faster, positive experience for your customers.

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of “held offerings” are paperwork errors60%

almost

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Take off the Blindfold and Hit the Mark

8 out of 9 F&I Managers say they want a better way to gather accurate, complete information for assessing a customer’s auto financing needs. Bad information leads to miscommunication about interest rates, terms and payoff amounts. Having accurate information from the start will streamline the transaction.

Source: Service 360 Partners, 2013

Having the ability to recalculate pricing in seconds based on your customers’ desires is essential in speeding up the process, helping them make faster decisions.

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Finance & Insurance

8 out of 9 F&I Managers want a better way to gather accurate and complete information

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of dealers lose gross profit due to a re-sign

67%

Get it Right the First Time

67% of dealers lose gross profit due to a re-sign, which could cause lower CSI and increase the risk of losing customers for repeat Parts and Service business.

Source: Electronic Signature & Records Association, 2014

Finance & Insurance

Ensure your contracting process has documents linked together so nothing is forgotten.

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Cobbled Credit Workflows Cost Big Money

The average dealership spends $182,754 per year to comply with federal mandates governing employment, business operations, vehicle financing, sales, marketing, and vehicle repair and maintenance.

Source: Wards Auto, 2014

Finance & Insurance

An investment this big should give your employees a unified, straightforward process that saves time and helps reduce errors.

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The amount the average dealership spends per year to comply with federal mandates

$182,754

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Fixed Operations

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The Chosen Ones

Your dealership can only determine the equity position on 47% of Service customers, because those customers purchased their vehicle from your dealership. The other 53% did not buy their vehicle from your dealership, which means you lack equity insight on more than half your customers.

Source: Pearl Technologies, 2014

Fixed Operations

An ideal equity solution reviews nearly 100% of your customers, rather than only the ones who purchased from your dealership.

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Your dealership lacks equity insight on more

than half of your service customers

53%

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The Importance of Knowing What is Important

In a survey of automotive executives, 80% said that a ‘Quality Service Experience’ was an ‘extremely important’ or ‘very important’ factor in consumers’ purchasing decisions.

Source: KPMG, Global Automotive Executive Survey, 2014

Fixed Operations

Your dealership as a whole is being evaluated; poor service in the Sales department or Service department will greatly affect your profits for the entire dealership.

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of automotive executives feel that quality service

is a top priority

80%

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The More They Know …

Customers want truth and honesty from vehicle service centers. 81% of drivers agree that quality service is more important than price. Providing them more information about repairs can help.

Source: Service 360 Partners, 2013Source: Google+ Sterling Driver Insights Study, 2013

Fixed Operations

Providing the information via tablets allows your employees to become more helpful and effective.

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1 2 3 4 5

of drivers agree that quality service is more important than price

81%

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of drivers continue online research

even after shop visits

62%

Savvy Drivers Fact-check Throughout

Consumers do their research before bringing their vehicles in for service. Even after shop visits, 62% of drivers continue online research for price comparison and confirmation of Technician advice.

Source: Google+ Sterling Driver Insights Study, 2013

Fixed Operations

Having personalized information readily available for your customers gives them confidence that you will provide a professional, hassle-free experience now and in the future.

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Every Opportunity Could Turn into a Lifetime Customer

Consumers are keeping their cars longer – due to better quality vehicles and fallout from the recent recession – and dealerships are not being utilized for servicing these vehicles. 50% of dealership Service vehicles are less than 4 years old, but the average age of passenger vehicles on the road is over 11 years old.

Source: Service e360 Partners, 2013

Fixed Operations

The experience is critical. Ensure you are utilizing technology to maximize the check in and check out process.

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of dealership Service vehicles are less than 4 years old

50%

Average age of passenger vehicles on the road

11years

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Mobility

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The Agility of Mobility Brings Stability

Tablet and smartphone traffic have nearly exceeded desktop traffic to the CDK network.3

1Source: Nielsen, 20142Source: Google: Mobile Path to Purchase, 20133Source: CDK Business Intelligence, 2014

Mobility

The right mobile digital advertising strategy can help maximize your online efforts.

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of mobile auto searches lead to a purchase

50%

Your audience is mobile. Your digital strategy should be too. Today, an average American owns 4 digital devices and spends 60 hours per week consuming content on them.1

In addition, more than 50% of mobile auto searches lead to a purchase.2

The average American:owns digital 4 devices

spends hoursper weekusing them

60

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Further Down the Mobile Rabbit Hole

91% of consumers say access to content any way they want is important.1

Consumers are 3 times more likely to be influenced by good reviews on tablets and mobile.2

When looking at new vehicle sales of a popular brand in a single month … dealerships with an average star rating of 4 or more stars sold 47% more vehicles than dealers with an average star rating of 3.5 or less.3

1Source: Salesforce Mobile Behavior Report, 20142Source: JumpstartAuto.com, 20133Source: CDK Business Intelligence, 2014

Mobility

Your reputation needs to be monitored and managed to ensure customers see you in the best light.

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Dealerships rated with 4+ stars sell

more vehicles47%

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Simplify

Use large images, large fonts and few words to convey one simple message that supports your digital marketing strategy. Remember, less is more.

This Works This Doesn’t Work• Simple, clear, concise message • Too many words• Large and clear fonts • Too many font sizes• Fonts contrast with background • Fonts are too small• Easy-to-read font types • Hard to read on background

Source: CDK Business Intelligence, 2014

Mobility

Yes, it’s that easy … keep it simple.

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Mobile Payments are Here to Stay

Source: Statista, 2014

Mobility

Customers expect it … provide them easy secure payment options.

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800

600

400

200

02010 2011 2012 2013 2014 2015 2016 2017

52.9

Ann

ual t

rans

actio

n vo

lum

e

101.1 163.1 235.4 325.2 431.1 563.4 721.4

The value of mobile payment transactions globally will top $325 billion for 2014, almost a 100% increase since 2012.

Global mobile payment transaction volume from 2010 to 2017 (in billion U.S. dollars)

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For more information about how CDK can help move your dealership Faster Forward, contact us today.

Call888.424.6342

[email protected]

Visitcdkglobal.com

1950 Hassell Rd. | Hoffman Estates, IL 60169-6308 © 2015 CDK Global, LLC / CDK Global is a trademark of CDK Global, LLC.