The congrats messages on my two year anniversary are starting to fill my Linked-In mailbox. I released Automotive Compliance in a Digital World around this time in 2018. One of the consistent themes in the book is that dealer sales and F&I processes are in an evolutionary transformation from analog to digital. An underlying suggestion in the book is that this evolution began more than 25 years ago when I worked on a project at a major captive to move from paper contracts to laser-printed forms.
Today’s reality, though, is that consumers are being bombarded and conditioned with messages from the likes of fast food companies offering online shopping and delivery, to our doctors conducting assessments via video conferencing.
An unspoken truth is that sometimes a drastic, calamitic action has to sideswipe a process to speed up the evolutionary process. The calamity known as COVID-19 is acting as an agent of revolutionary change in not only dealer sales processes, but in almost every aspect of our lives.
The Dawn of the Digital Retailing Business Model
You are a witness to the dawn of the digital retailing age. There are a lot of moving pieces in today’s digital process, and some vendors have successful solutions to many of those pieces.
Many dealers continue to use the “Road to the Sale” model to sell and deliver a vehicle. Each step has its own set of processes and compliance requirements. Vendors are working to digitize each step on the road to the sale. These vendors still primarily rely upon the consumer traveling to the dealership to initiate and conclude the vehicle sale.
Today’s reality, though, is that consumers are being bombarded and conditioned with messages from the likes of fast food companies offering online shopping and delivery, to our doctors conducting assessments via video conferencing. This may change once the pandemic slows, but it may not.
Some dealers are testing an approach in reaction to the prevalent stay at home orders and seeing some encouraging results. I spoke with a few such dealers and compiled their processes.
The Digital Road to the Remote Sale
These dealers have historically been near the bleeding edge of digital processes, and are probably better positioned than many to implement the “Digital Road to the Remote Sale.” One dealer reports that to his surprise, even some of the more seasoned sales people are embracing this new process, citing the example of a senior citizen sales person who sold two cars in one day shortly after implementing this option.
To be sure – I am not suggesting that 100% of future sales will use a remote sale option. I am not even predicting that a majority of future sales will be via remote delivery. Heck, it could be like the electric vehicle option – attractive to some people, but limited in actual useage.
This digital road relies heavily on video conferencing capability. These dealers are using a mixture of Facetime, Skype, Go To Meeting, and Zoom. It is also susceptible to fraud, identity theft, and Safeguards risks.
The new process looks something like this.
1. Attract the Lead
The dealer still advertises via the usual methods, and generates a number of leads from these channels. When the customer submits a lead, the assigned salesperson or BDC employee contacts the customer to set an appointment. If the customer is hesitant to come to the dealership, then a remote sale appointment is secured.
2. Present the Vehicle
The first option in presenting the vehicle is to demonstrate the features and benefits for a chosen vehicle via a video conferencing service. Consumers who are brand loyal, or are already sold on a particular model, may select this option. Other consumers are like my six-foot-tall friend who told me, “I have to test drive the vehicle to make sure I fit.”
For a touchless test drive, the salesperson goes to the customer. The vehicle is sanitized, then the steering wheel and seats are wrapped in plastic. The salesperson (wearing disposable gloves) parks the vehicle in the driveway, leaves the keys in the cupholder along with a spare pair of rubber gloves, exits the vehicle and stands at least six feet away. She then calls the customer to come out and take a test drive and waits for the customer to return. Another dealer I spoke with is considering using a Borrowed Car Agreement for the test drive.
If possible, the salesperson conducts a touchless appraisal on the potential trade in, noting the general condition of the interior and exterior without opening or getting into the car.
After the test drive, the salesperson returns to the dealership and all the plastic and rubber are properly disposed of and the vehicle is sanitized.
3. Gather Credit Application
The salesperson resumes the sales and negotiation process only after returning to the store as if the consumer were in the dealership. The sales manager generates and emails a first pencil, using the dealer’s standard rate and sight unseen trade allowance.
When the customer wants a more specific payment quote, the F&I manager sends a link to the customer to enter the credit application information using a secured transmission source. Before sharing any further information, a manager sets up a video conferencing session and has the customer successfully answer the out of wallet questions. Do not move forward with the transaction until you can get a successful clearance of both out of wallet questions and Red Flags.
4. Consummate the Deal
With credit information in hand, negotiate the deal to agreement as if the customer were in the showroom. The salesperson emails the final pencil to the customer for signature and return. The first and final pencil do not contain non-public, personal information and do not have a requirement to safeguard the document.
5. Share Voluntary Protection Products
Some F&I managers believe they cannot sell voluntary protection products to remote delivery customers. The dealer I spoke with about this process says his F&I managers who have embraced this it are averaging three products per remote sale. The F&I managers who have not embraced the process continue to strike out on product sales. This dealer insists that if an F&I manager conducts a menu presentation via video conferencing as he or she would face to face, the customer will likely purchase products.
He conducts the menu process from beginning to end using a video conferencing service, using the word tracks for a standard close. After the menu presentation, a separate set of out of wallet questions are asked and confirmation is retained in the deal.
6. e-Contracting, e-Signing, e-Notary
Here is where the processes have disparate solutions. At last count, a consumer can sign up to 100 times for a standard retail financed deal. Getting all of those signatures on eDocs requires a bit of research and perseverance. The dealers I spoke with leverage RouteOne, Dealertrack, and their finance sources for e-contracting. They generate other e-docs through their DMS where available.
A huge assist to help minimize some of the fraud risk is potentially on the horizon – e-notary services are currently permitted in 36 states. Would it be possible to e-contract through RouteOne, Dealertrack, or your finance source, then have the remaining documents e-notarized?
Until then, a secured document transmission service such as Google Docs may be helpful.
Arrange for the delivery of the vehicle. This may be the opportunity to obtain the wet signature on any remaining documents that require it.
Out of area deliveries already carry a high risk of identity theft. Word is some fruadsters have started circulating world maps of the current COV19 outbreak coverages with suspicious links. Never lose sight of the nefarious people in this world who think nothing of relieving you of your inventory. Asking the out of wallet questions two times, leveraging video conferencing softwares, properly clearing Red Flags, and confirming identities and signatures whenever possible are prudent practices.
Transmitting non-public personal information without using encrypted tranmissions (i.e., credit apps, driver’s licenses) is a huge Safeguards risk. Contemplate using a secured document transmission source such as Google Docs to receive this information from the consumer.
Acceptance of down payment information over unsecured channels suchs as fax, e-fax, e-mail, and text is also a Safeguards risk. Again, Google Docs to the potential rescue.
Until we resume to normalcy, stay safe, good luck, and good selling.
Gil Van Over is the Executive Director of Automotive Compliance Education (ACE), the Founder and President of gvo3 & Associates, and author of Automotive Compliance in a Digital World.
Originally posted on F&I and Showroom