Why treat the most important sales channel as non-core?

As the industry progresses towards omni-channel, primarily thinking of car sales, but also applicable to parts and increasingly services, the approach towards designing and implementing the digital channel is becoming increasingly outdated.  Our consumer research shows that the vast majority of new and used car buyers make at least partial use of the online channels provided by manufacturers and dealers at some point in their journey, even if they finally buy physically.  Half the new car buyers have settled on the brand they’re going to buy before they visit any dealer.  They’ve based that decision largely on their experiences online, including any interactions they’ve had through chat, email and phone.  As I pointed out in my blog a few weeks ago, it’s becoming increasingly difficult to attribute sales to a specific channel as we tend to look at where the contract has been finalised, rather than on the relative weight of different influences on the customer’s decision to purchase as they switched channels along the way.

If we looked at sales channels in terms of influence, it’s likely that for new and used car sales, the most significant channel is the digital one, even if the physical one tends to get the credit on the basis of deals closed.  By digital, I am not referring to the website, or even website plus some enhanced functionality to provide a trade-in value for example.  I am thinking of the whole customer experience outside of the dealership including pop-ups, temporary test-drive locations and contact centres who provide support to the customer journey through any of form of communication.  In most cases (possibly all as I’m not aware of any exceptions) all of these interactions are outsourced to agencies and specialist providers by the car manufacturers.  (Dealers are much less guilty of this, tending to use their own staff and operating contact centres in-house).

Outsourcing and non-core tend to go together hand in glove.  The Cambridge Dictionary refers to non-core as an activity “that a company does not really need or consider the most important”, yet all these non-dealer interactions are being outsourced, despite the fact that they are highly influential on the majority of car sales through the retail channel.  You might argue that it is precisely because of their impact that manufacturers choose to seek external specialist support, but that is not how they approach decisions on resourcing their engineering functions, and it is not borne out by the way in which they select their outsourcing partners for customer-facing support.  They involve their purchasing teams who run a bidding process focused primarily on cost and efficiency rather than effectiveness.

This has been brought home to me by discussions with both manufacturers and dealers involved in the various agency implementations, and in discussions I have had in parallel with Tony Patterson from Concentrix+webhelp who comes from a consumer retail background, but has been working with a number of manufacturers on digital sales channels and more recently agency.  We have found that we think alike in this area, where he talks about ‘assisted selling’ and ‘digital dealerships’ rather than using traditional call centre language like average handling time and abandonment rate.

If you look at an automotive brand contact centre as a digital dealership which has a high potential to leverage or even conclude a sale, then you would make very different decisions on the type of people that you employ and how they are measured and rewarded.  Your own staff would be more directly involved.  A car buyer who is accessing a contact centre during their purchase journey is potentially looking for the same type of support that they would get by going into a physical dealership.  They want some guidance on different specifications, on whether the specification might influence the earliest delivery date, on which finance option might suit them best.   The more engaged you can be with the customer at this stage, the more likely they will stick with you through to their final purchase decision, whether made online or in dealership.

This has implications on the type of staff employed, their qualifications and motivation.  Although there is not yet a consensus amongst dealers, some choose to resource their own contact centres with former sales executives, rather than call handlers.  Others look for the generic call handling skills, but then train them to a similar capability as their sales executives, including regulatory compliance to talk finance.  This ultimately also has a bottom-line impact on the operating cost of the contact centre – one that would have the purchasing department possibly blowing a fuse.  But purchasing do not get directly involved in setting the standards for which dealer partners to work with, the corporate identity, brand training or technology tools deployed in dealerships, beyond trying to get the best commercial terms for any external purchased goods or services.  The standards themselves for physical networks are defined by the brand and network teams, and there is then close monitoring of sales performance, including lead tracking, test drive appointments and conversion rates.  Why should the approach to the digital dealership be any different?

If manufacturers are serious about omni-channel – and in particular if they are serious about agency and the new retail responsibilities that brings – they need to change their whole approach to their #1 dealer, their digital dealer.  Focusing on how this should work – as a dealership, not merely a contact centre – will help them in their desire to increase the level of pure online sales, but also help their traditional dealer (or agent) network to deliver sales through the physical channel.