After record setting car prices, the Consumer Price Index from Jan. '22 to Jan. '23 reported an 11.6% decrease in used car prices. Learn why that...
Reducing Effort is the New Value Builder: Part 1
A new currency has risen to the top of what consumers expect – reduced effort. Today’s consumer has no willingness for things that are harder than they need to be.
I read a customer review/comment/question on social media recently. The customer was working to buy a Lexus from what most in the industry could guess to be a successful and progressive brand and dealer. Here is what they said:
So, if you’re reading this you are likely a car person and you’ve already started to ask yourself, “could this happen at my store?” For some of you the answer is a clear NO and for others, well you are kind of chuckling and asking what’s wrong with what the Lexus dealer did?
Customers have always been in control of their buying journey and we’ve always worked hard to gain that control by our processes. We built processes that were about building value but not wasting time, building gross and of course protecting our profit lines with things like protection packages, nitrogen in tires, doc fees, and F&I. We liked the idea that we needed to “slow them down” so we could keep control and put them through our processes. But times have changed.
The advent of the internet and specifically Google have changed consumer behavior. The internet posed new possibilities that would “save” everyone's time. Google launched a web browser and it showed the time it took them to get us the 17M results to our search question. Amazon said we could order a book and not have to leave our home and evolved into a company that now delivers us just about anything in two or less days. We became addicted to speed and things moving fast for us when we make a purchase.
While the consumer marketplace has not abandoned its love of speed, we have seen a new currency rise to the top of what consumers expect – the word “easy” comes to mind, simple, and for sure, “reduced effort.” Today’s consumer has no willingness for things that are mindlessly harder than they need to be. At Quantum5 we call it being “frictionless” and whether it’s our training or our technology design, we focus on making it easy.
While there are great dealers working tirelessly to ensure their customers find it easy to do business with them – there are still even more doing what we they have always done. When I talk to salespeople about their appointment process, I tell them about the importance of having the vehicle cleaned and parked up front when the customer arrives and more times than not, I hear them say that management doesn’t want to waste the time in case the customer does not show. When I ask managers about providing a customer an F&I product overview online prior to them coming in for delivery and the answer, most times, is that F&I wouldn’t want to answer questions without having the customer in the office.
There are ways to add value to the customer’s experience by reducing the effort for them to accomplish their goal. People have always paid for convenience, and they have paid for things that were time saving and they will pay to have it go easier. The time has come to shake our old habits and bring the new value they want – to make it easier for them. It’s time to write out your process on the whiteboard and work with the team to cut out the things that make life harder for the customer and the dealership. You only need to remember one thing – if you refuse you will lose. Customers have the power and just as this person described – they will walk and start over when you make them extend more effort than value. We need to remember that the next dealership is just a click away on a smart phone. If you make me miserable while you finish my trade value – guess what, I could be entering information in the CarMax site or Carvana site and get an instant offer and check the same day!
So, the easy question is, “what do you do about it?” Stay tuned for Part 2 of Reduced Effort is the New Value Building.