Rudy Luther Toyota Scion + Automotive Concepts

Transcription

AOA Supplier Digital Network Case Study
Coordinated Efforts: Overcoming the Challenges
of Selling Accessories in the Dealership
Rudy Luther Toyota Scion
http://rltoyota.lutherauto.com/
28805 Wayzata Blvd.
Golden Valley, MN 55426
Automotive Concepts
http://www.ac-mn.com
Aftermarket Accessories
2731 Nevada Ave. N.
New Hope, MN 55427
Automotive Industry
izmocars Solutions
AddOnAuto
How One Dealership and One Aftermarket Supplier Joined Forces
to Increase In-Dealership Accessories Sales
Rudy Luther Toyota Scion and Automotive Concepts utilize a digital
platform and accessories sales process: increases dealership accessories
revenue by 300%, supplier orders by 400%, and improves customer
experience.
Snap Shot Results:
•
Rudy Luther Toyota Scion in Minnesota increases monthly
accessories sales from $30,000 to over $130,000
•
Rudy Luther Toyota Scion sells accessories to 6 in 10 buyers in
six minutes through new sales process
•
Dealer orders for Automotive Concepts increase 300% to 400%
Situation:
In today's competitive marketplace, dealers face increasing pressures to hold
gross on new vehicles. The 29 billion dollar accessories market should represent a natural opportunity for dealerships to increase profits; however, while the
majority of consumers prefer to buy accessories at dealerships, fewer than 5%
are sold in the dealership, mainly because the obstacles to successful
in-dealership accessories sales over the years have been significant - such as
having to carry cumbersome, expensive, and, by nature, extremely limited
physical inventory and the challenges of cross-department integration.
Aftermarket suppliers play a critical role in dealership accessories sales
success but have, until now, only added to the challenge, as they have been
unable to provide dealerships with a streamlined and user-friendly process for
presenting and updating catalogues and holding inventory, as well as an
integrated installation protocol.
318 Brannan Street Suite 100 San Francisco CA 94107
866.364.1035
 415.495.2955  [email protected]
28805 Wayzata Blvd.
Automotive Concepts
2731 Nevada Ave. N.
New Hope, MN 55427
Automotive Industry
izmocars Solutions
AddOnAuto
With new-vehicle sales on the rise, and innovative online tools enabling a revolution in coordination between dealerships and suppliers, the time is ripe for
dealers to not only capture a greater share of this market, but to take the
process to a new level, enabling dealerships to firmly establish accessories
sales as a profit center, without negatively affecting F&I.
Overview
Through the example of a Minnesota dealership and a leading automotive parts
supplier, this case study demonstrates how using a new digital configuration
tool and online platform can provide a better consumer experience and greater
conversion; seamless coordination between suppliers and dealerships; realtime communication on parts information, updates, and installation scheduling,
and, ultimately, increased dealer – and supplier - profits.
A Midwestern Dealership Takes on Accessories Sales
Rudy Luther Toyota Scion in Minnesota sells 250 new and 200 used vehicles per
month and, until recently, was generating a respectable $30,000 a month in
accessories sales. But, with holding profit on new vehicles a continuous
challenge demanding other robust revenue streams, $30K a month was not
good enough for General Manager Mark Beithon, who was convinced there was
far more opportunity in accessories sales than the dealership was currently
reaping. He believed that the secret was to not only institute a process change
across the dealership, but to take advantage of new digital platforms and tools
that expedited selling and increased coordination with suppliers.
The Challenges of Aftermarket Accessories Sales
Beithon confronted and took on the challenges that prevent many dealerships
from taking on this rich potential revenue stream. He knew that for many, the
ever-changing products in the aftermarket accessories industry, plus changes
in vehicle models from the factories, were too overwhelming. In a resourcechallenged environment, how could a dealership possibly keep up with the
thousands of accessories choices and iterations in the market -- not to mention
potential fit problems and varying product quality? And then there were the
installation headaches…does an installer have the right expertise for each
product? How do you coordinate with supplier installers, while also trying to
coordinate with the dealership’s own service center technicians? And, if multiple
suppliers are involved in a particular order, the problem is compounded.
866.364.1035
28805 Wayzata Blvd.
Automotive Concepts
2731 Nevada Ave. N.
New Hope, MN 55427
Automotive Industry
izmocars Solutions
AddOnAuto
Because most aftermarket suppliers simply provide a printed folder or booklet
itemizing and listing available options for the products, along with dealer cost
and suggested retail prices – it is impossible for dealership accessories managers to keep up with the rapid industry changes. The books quickly become
outdated, meaning managers are often quoting and selling (or attempting to
sell) with the wrong pricing and the wrong products. Add to that the fact that
dealerships carry multiple books by multiple installers and re-stylers, and it was
no wonder to Beithon that the resulting customer dissatisfaction, loss of dealer
profits and commission chargeback’s made most dealerships shy away from
accessories.
With all these apparent challenges, a dealership must be very motivated to
venture into selling aftermarket accessories products at dealerships. Fortunately, Beithon was very motivated and knew that, just like car sales in the
2000s, accessories sales and the supplier process in the 2010s needed a digital
update. And, he would come to find out, with new processes and tools, the
‘challenges’ would quickly evaporate.
Suppliers Go Digital and Get Integrated
As Beithon was trying to solve accessories sales challenges at his dealership,
Minnesota-based Automotive Concepts, a leader in automotive restyling and
accessories (and the Midwest’s largest aftermarket installer), was also looking
for a way to solve the complex issues plaguing in-dealership accessories sales.
John Prosser, owner of Automotive Concepts, was looking for a process that
enabled dealerships to present accessories to customers prior to purchase in
order to eliminate the chronic problem of wrong products ordered due to misinterpretation on the dealership end – a problem that translates into significant
hassle and wasted time for the supplier/installer.
Prosser believed that many more accessories could be sold at the dealership if
a better process, one that targeted the customer at the sweet spot moment of
purchase, was instituted. He also knew that none of the above could be accomplished in the dealership with outdated and worn out printed catalogues and
price sheets.
After all, increased accessories sales at the dealership meant increased
business for Automotive Concepts … and what better place to make an accessory sale than at the dealership when the customer is still financing and ‘in love’
with the vehicle?
866.364.1035
28805 Wayzata Blvd.
So, when a digital solution and a new process presented itself – one that would
enable those customers to actually see a digital image of the vehicle they had
just purchased with Automotive Concept’s aftermarket products (with real time,
up to date pricing and relevance to that particular model) digitally attached to
the vehicle (and integrated into the customer’s monthly payment) – he leapt at
the chance to help pioneer a new coordinated process between dealers and
suppliers - one that dealers would not shy away from and that could result in
increased customer satisfaction and higher profits for both dealers and suppliers.
A New Digital PLATFORM
Enter izmocars AddOnAuto (AOA), which was already making waves in the
industry for a new digital process that was ramping up accessories sales in
dealerships. AOA incorporated three breakthrough functionalities for dealerships:
Automotive Concepts
1) Rich customer visualization/personalization tools,
3) Integration of all accessories sales workflow across the sales,
F & I and service/installation departments.
2731 Nevada Ave. N.
New Hope, MN 55427
Automotive Industry
izmocars Solutions
AddOnAuto
2) A 100% virtual inventory system,
The AOA tool enables dealership customers to pull up their exact vehicle model
(down to trim level) and interactively configure it with thousands of accessories
on the fly. Customers can richly visualize and build a custom, ‘dream’ version
of their car (i.e., with tinted windows, custom wheels, spoilers, body-side moldings, upholstery, dash kits or navigation, etc.).
Furthermore, because the inventory system is 100% virtual (providing tens of
thousands of accessories from updated OEM and aftermarket vendor databases), dealerships can present vastly more options than even a large independent chain. And AOA enables consumers to visualize trim-level accessories
configurations on the interior as well as the exterior of the vehicle.
All of this was increasing gross margins to 45% on average for dealerships
using AOA, net profit margins to 28% and accessory revenue-per-vehicle sold
to $475.
And Rudy Luther was no exception: accessories sales quickly ramped up after
Beithon literally built a whole new department around the AOA solution.
866.364.1035
“
28805 Wayzata Blvd.
Automotive Concepts
2731 Nevada Ave. N.
New Hope, MN 55427
Automotive Industry
izmocars Solutions
AddOnAuto
“
We needed to make a statement with our accessories department. AOA’s
software presentation gave us the opportunity to get the items in front of
the customer, and make it a fun and enjoyable experience for them. It’s
more about showing the options, than the hard pressure sale, and being
able to show the customer on their exact vehicle they are purchasing
makes it all the more real to them.
However, while the experts at izmocars were keenly aware that the AOA
platform had solved many of the critical issues of dealership accessories sales,
the aftermarket supplier/installer issue remained a nagging one, even for those
dealerships, like Rudy Luther Toyota Scion, who were proving to be accessories sale
champions. So, with the input of suppliers like Automotive Concepts, AOA developed a
platform for the aftermarket industry that was able to bring aftermarket suppliers, re-stylers, installers and dealers together to better coordinate parts catalog,
pricing, ordering and installation.
The platform enabled dealers to say goodbye to those outdated, dog-eared
catalogues lying around the showroom, and suppliers to maintain their parts
catalog in real-time and in living color, with up to the minute updates of parts,
pricing and images for their dealers. Meanwhile, dealers were able to use one
catalog database to offer a variety of products from various suppliers to their
customers, resulting in a much more efficient and effective accessories sales
process.
Dealership and Supplier Coordinate Efforts: Digitally
Working with Automotive Concepts and Rudy Luther Toyota’s other suppliers,
Beithon added AOA’s Supplier Digital Network to his accessories process.
Now, Beithon had the advantage of not having to maintain a complex accessories catalogue and of receiving automatic updates of parts and pricing from
suppliers. Plus, AOA’s digital catalog, together with visual configuration, was
not only facilitating more accessories sales but was maintaining high customer
satisfaction and zero loss of profits or commission chargebacks. Finally,
Beithon was able to seamlessly coordinate installation scheduling with the
suppliers and run all installations on a coordinated schedule that included the
Rudy Luther service department.
On the supplier side, according to Prosser, Automotive Concepts was now able
to more easily and efficiently maintain and update their dealer clients’ catalogues– simply adding their own parts and packages and making them available to their dealers with one click.
866.364.1035
In addition, Prosser found it much easier to maintain multiple price lists for their
dealers providing discounts on volume based purchases – and to facilitate
installation more efficiently through the Digital Supplier Network online scheduling tool.
28805 Wayzata Blvd.
Automotive Concepts
2731 Nevada Ave. N.
New Hope, MN 55427
Automotive Industry
izmocars Solutions
AddOnAuto
Said Prosser: “The process was seamless between dealers and installers
from initial sale of the accessory to ordering of parts to scheduling the installation work to finally delivering the work.”
Training and Sales Process
Both Prosser and Beithon say that training and cross-dealership process are
critical elements to the success of the Supplier Digital Network.
In addition to having a dedicated accessories area in his dealership with plasma
screens where consumers can configure and reconfigure accessories on the
vehicle they’re purchasing, Beithon realized that to be fully successful, he
needed to get buy in from all team members in the dealership, not just the Fixed
Ops department. Although he hired a dedicated accessories manager, he saw
the sales department as being a vital part of the process, and made sure that
the accessories area was easily accessible to the showroom sales team so they
could guide customers to a six-minute presentation from the accessories manager.
Beithon also knew that, in certain instances, his parts reps and service advisors
were in a position to influence the sale of accessories. His parts counter staff
could sell over-the-counter, and service advisors could direct traffic to accessories sales staff or a dedicated area for presentation. To solidify this crossdepartment cooperation, and in consultation with AOA’s dedicated trainer, he
established a pay plan that incentivized team members across departments.
With the AOA platform, the entire dealership was able to speak in ‘one voice’ on
accessories products. AOA training further aided Beithon in establishing a
unified sales process with all team members.
“Hands on training from AOA for the entire staff of the dealership brings everyone on the same platform and ensures that the retail consumer is finally being
presented the products they actually want,” said Prosser. “Plus, the training on
the order handling process eliminates the ‘Hassle Factor’ commonly found in
ordering parts – so now, there is no hassle for the dealer, no hassle for the
supplier and, importantly, no hassle for the consumer!”
866.364.1035
Furthermore, with the help of the Supplier Digital Network and the AOA
platform, Beithon was able to create a dedicated department to handle all the
internal work related to getting the items installed for the customer.
28805 Wayzata Blvd.
Said Beithon: “Having one contact person that knows each vehicle and the
accessories that need to get installed helps streamline the process. This
means the Accessory Manager can focus on specific processes and can
analyze how they work for the department in addition to doing a good job at
follow-through on appointments for installation.”
Results
Automotive Concepts:
Since joining AOA’s Supplier Digital Network two months ago, accessories sales
from dealer orders have increased 300% to 400%.
Automotive Concepts
Rudy Luther Toyota Scion:
Before AOA
After AOA
Percentage
Increase
Accessories Revenue
$30,000 per month
$130,000 per month
333%
Average accessories
revenue-per-vehicle
$120
$500
317%
1 in 10
6 in10
500%
OEM Product Sales
$15,000 to $18,000
$50,000 to $75,000
233% to 317%
Aftermarket Product Sales
$10,000 to $15,000
$50,000 to $60,000
300% to 400%
2731 Nevada Ave. N.
New Hope, MN 55427
New vehicles purchasing
Automotive Industry
izmocars Solutions
AddOnAuto
“Selling accessories with AOA is a great way to increase profit within the entire
dealership. Customers benefit with added protection, more satisfaction with
their vehicle’s appearance and increased re-sale value; and the dealership has
potential to make profit in the Sales, Service, and Parts Departments.”
Mark Beithon,
General Manager, Rudy Luther Toyota Scion
866.364.1035
28805 Wayzata Blvd.
Automotive Concepts
BEST PRACTICES OF ACCESSORIES SALES CHAMPIONS
1.
Understand your accessories market: i.e. which accessories are more
likely to be popular with your specific customer base. Use that information
to develop your sales strategy.
2.
Identify / adopt an online tool that can configure the exact vehicle (down to
year, make, model, interior and exterior color) with accessories on the fly,
so customers can immediately and richly visualize the enhancements.
3.
Take advantage of any “wait time” after the purchase has been negotiated
and finance is being arranged to let the customer digitally configure their
new vehicle with accessories.
4.
Dealers are more likely to sell genuine OEM accessories, but aftermarket
accessories can play an important role in supporting your OEM sales and
prices, by filling in the gaps on fast-moving accessories not offered by the
OEM (e.g. window tints, upholstery, etc.)
5.
Interior accessories and electronics are critical to your accessories
profitability, so make sure the tool you choose has interior, as well as
exterior, visualization capabilities.
6.
Ease the financial pain for customers by calculating the enhancements
into the overall financing and monthly payment, along with providing the
upfront price.
7.
Ensure that the accessories sales, financing, and installation process is
seamlessly coordinated across the entire dealership, facilitating the efforts
of everyone involved (the customer – the sales, F&I, service and parts
departments – management). Your accessories sales efforts will crash
and burn quickly if any member of the value chain has a bad experience.
2731 Nevada Ave. N.
New Hope, MN 55427
Automotive Industry
izmocars Solutions
AddOnAuto
866.364.1035
AOA SUPPLIER DIGITAL NETWORK FEATURES AND BENEFITS
•
Creates a digital network between 3rd party suppliers and installers
28805 Wayzata Blvd.
Automotive Concepts
•
Automates dealers’ digital accessories catalog and creates a vibrant
virtual accessories showroom
•
Allows dealers to sell OEM and Aftermarket accessories without the
hassle of maintaining a parts catalog, and includes automatic cost
updates from multiple suppliers
•
Makes it possible for dealers to easily leverage 3rd party suppliers and
installers to provide better mix of products for engaging and effective
presentations
•
Ensures the correct product mix (i.e. the right, available accessories for
the customer’s vehicle choice) for a fulfilling shopping experience
•
Easily facilitates quality installation and high service levels, which equal
complete customer satisfaction
•
Streamlines co-ordination of accessory sales across all departments
•
Enables sales to take advantage of any “wait time” after the purchase has
been negotiated and financing is being arranged to let the customer
digitally configure their new vehicle with accessories
•
Instantly re-calculate financing/payments to reflect addition of accessories
as consumer virtually adds accessories.
2731 Nevada Ave. N.
New Hope, MN 55427
Automotive Industry
izmocars Solutions
AddOnAuto
866.364.1035

Rudy Luther Toyota Scion + Automotive Concepts

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