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Tuesday, 12 May 2020 21:00

Three Keys to Profitability in Digital Retailing

Written by Jason Unrau, CBT Automotive Network

Index

With the coronavirus recovery underway in most parts of the country, dealerships nationwide have had to adapt their sales structure.

In many parts of the nation, the customer base suddenly has become uneasy to cross the threshold into the store for the first time. And in areas that were able to continue selling during the pandemic response, digital retailing became the consumer’s method of choice, not to mention the only allowable method in others.

 

What dealers are bound to struggle with if digital retailing truly becomes the new norm is that it contradicts much of the strategy for sales profitability. What salespeople have been taught to do for decades to retain the highest gross profit possible is now nearly impossible. 

 

The tenets to keeping gross profit until now have been building a relationship with the customer, thorough feature-and-benefit analysis with product knowledge and controlling the narrative. In digital retailing, these tenets for a profitable sale are much more difficult.

 

Since the contact with the customer is digital, building a relationship is far less personal. What that means is that a face-to-face greeting, small talk over a coffee and responding to body language are not possible. The relationship tends to be more superficial.

 

The walkaround for a new or pre-owned vehicle is about educating about its features and benefits and reinforcing its value. That’s much more difficult without two parties participating in the process. 

 

All in all, it’s more about becoming a trusted authority on the car. If that’s not happening, the customer is less likely to relinquish control of the narrative. That’s where profitability dissipates. 

 

Digital retailing isn’t new. Internet sales managers have been integral to dealership operations for well over a decade, but it’s even different for them right now. Rather than converting an internet lead to an in-person appointment, much of the sale and delivery---if not all---have to be done without ever meeting the buyer in person. That’s tough for someone who hasn’t had to do it previously… but not impossible.
 
Known as relationship selling, one key is to continue using the strategy to build rapport with the customer without an in-person connection. It still needs to be physical, however. Looking a person in the eye helps establish trust, and while that’s easiest in person, it’s still possible virtually.


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