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This is the 3rd in a series of 6 articles that will outline the SPoC roadmap:
- Part 1: What is SPoC?
- Part 2: The Beach
- Part 3: Prework Part 1
- Part 4: Prework Part 2
- Part 5: Burn the Boats Part 1
- Part 6: Burn the Boats Part 2
Setting Expectations and Goals: The Beach
What do I mean by knowing where the beach is? As with the adaptation of any new process if there is not a clear, well-defined goal and objective, you’re sailing in a boat without a rudder or sail, and likely never going to land the boat on the right beach.
Welcome back, in today’s article I will address how to decide what the goals and objectives are with a transition to SPoC and what the end goal can look like. The objective of this section is to present a complete understanding of what SPoC can achieve. Remember, there are varying degrees of application for SPoC, and this is a journey that has several intersections that you may choose to pause at before continuing to your next stop sign.
So, the first question should be “Why” SPoC? What is the core reason to transition a dealership to Single Point of Contact?
These 8 advantages listed here are not in any chronological order, some may have more value to you than others however, what I have spent my professional automotive career on has been approaching processes from the consumer’s point first, these topics are derived from this philosophy.
1. Give the guest what they want.
The primary reason for a transition to SPoC is founded on the understanding that it is what the guest wants. In focus groups and through my experience in dealerships the guest has stated clearly, they just do not see any value in being moved around from one person to another. They hate it. Let’s meet their expectations and stop moving the guest around and focus on increasing CSI and 5-star reviews and revenue.
2. Hiring.
We all know how hard it is to find and retain good people. Part of the problem is so few candidates are interested in joining a sales team in a dealership, based frequently on their personal experiences or the reputation that our industry has. When candidates learn that they do not have to negotiate and can serve their guests through the entire transaction while earning a very respectable income by becoming a Customer Experience Manager (CEM), it is far more attractive. Prospective candidates will consider a career in the automotive industry when they may never have before. Once they are on board they rarely leave.
3. Employee satisfaction and retention.
As we are all aware, finding and keeping great team members is a challenge. When you transition to SPoC (thoroughly) the role of the salesperson changes dramatically. The salesperson’s skill level is elevated to a true professional consultative role allowing them to take sincere pride in what they do and receive compensation commensurate to their efforts. TRG likes to use the term Customer Experience Manager (CEM) for this new role. When the CEM can be a true professional consultant for their guest and increase their income, tenure and retention increases, resulting in a big win for the dealership and team.
4. Build a bench.
It goes without saying that when all the advantages of SPoC are adopted, dealerships have a bench of solid team members, many ready to move into a leadership role. This allows dealers to be well-prepared for growth
5. Speed and efficiencies.
We will discuss the organizational and structural changes required for SPoC in the next email, however for now know that everything moves quicker with SPoC. A simple explanation is the absence of the F&I office back-up that happens far too often, paralyzing the sales team while they entertain their guest waiting for the F&I producers to become available. With the right organizational structure and good lateral support, CEMs should be producing 20-plus units a month with 1.5 to 1.75 products per transaction.
6. Leadership.
Single point of contact, when married to Negotiation Free Sales (NFS) allows for the management team to become true leaders, coaches, and mentors to their teams. When they are busy desking deals all day, it is very difficult to find the time to coach their teams and develop personally.
7. Reduce the cost of sale.
SPoC suggests that there is no finance team. During the transition to SPoC we typically take the F&I producers’ income and shift a portion of this to the sales team. Please note this is not a reason to reduce your team’s income. When the F&I position goes away, and the sales team presents the menu they are compensated for their efforts. More about this in the compensation planning discussion later.
8. Guest retention.
It is very common to hear a guest say, “When do I have to go into that office in the back?” When they discover that they already have, they’re so enthusiastic they just want to tell everyone and are eager to return for their next vehicle. One of our clients report a 78% percent owner loyalty base driven by a laser-focused effort on guest satisfaction.
There is a debate over whether it is possible to embrace SPoC with a traditional 10-step sales process where negotiations exist on the purchasing of a vehicle. It is not my intention to emphatically state that this is not possible to do.
What I will state is that based on the feedback from TRG’s clients and consumers alike, it is significantly easier to execute SPoC when the negotiations on the vehicle are eliminated as in a Negotiation Free Sales (NFS) environment. This statement is not meant to be self-serving, please allow me to share the observations from clients and consumers so you can decide.
“In my opinion it is significantly more advantageous to layer in Single Point of Contact on top of a Negotiation Free Selling business philosophy.” — John W.
In a sales process where negotiations are required to finalize a transaction, at a minimum the process takes 2.5X longer and typically requires sales management involvement, resulting in a reduction in the advantages of SPoC that we talked about in our previous email.
Additionally, and perhaps most importantly, when the guest is required to negotiate on the selling price of the vehicle they want to purchase, what then would prevent them from attempting to negotiate on the selling price of the ancillary products being offered or the interest rate? This adds a level of complexity to the SPoC environment that is just not needed. Again, can this work? Sure. It simply depends on how many of the advantages of SPoC are desired.
While I may be a little controversial with my comments why stop now? It is time to close your Variable Operations BDC. Your guest has moved way past the need for a BDC. Today’s guest has already concluded what they want to buy, where they want to buy it and are seeking validation of their thoughts. They are not looking to make an appointment to come in and meet with a sales manager.
Get out of the guest’s way and let them buy the vehicle they have spent the last 15 to 19 hours researching. In the event a guest has not done all this research, your CEMs can manage these guests just fine. TRG is committed to the development of the Digital Retail specialist supported by Single Point of Contact.
I hope this information has helped you determine if a transition to Single Point of Contact is right for your dealership or to what degree you would like to start. If you’re interested in getting started now, give me a call or send me an email to get started on your SPoC journey.
In our next article, we’ll get into the “Pre-Work” involved in transitioning to Single Point of Contact selling.
Mike Anderson
The Rikess Group LLC
404-805-5009
For more information, visit our website at www.therikessgroup.com or Schedule a Consultation.
