The push for better customer experiences unites OEMs and dealers

Andrew Kuntze Upstart Auto Retail title card

By Andrew Kuntze, Manager of Implementation

When navigating the complex relationship between OEMs and dealerships, one thing both sides can agree on is that consistent, transparent, and streamlined customer experience is the top priority. And I’ve heard from many OEMs that online car-buying capabilities are the cornerstone of exceptional experiences for today’s customers who value tech-assisted shopping. 

OEMs want to feel more in control of customer experiences, pricing, and inventory. And they often incentivize dealers who upgrade their stores, be it showroom upgrades or better websites. Preferred providers are selected by OEMs based on rigorous vetting and standards. So when you work with that tool and vendor, you have confidence that it’s a great choice.

Why do OEMs including Honda, Kia, Lexus, Mitsubishi, Subaru of America, Toyota, and Volkswagen prefer Upstart Auto Retail? Because it’s a platform with the functionality, flexibility, integrations, and capability—with proven results—to help achieve their customer experience aspirations.

OEMs are focused on:

  • Avoiding inventory frustrations
  • Evolving from lead-gen to online car buying 
  • Speeding up the process
  • Improving consistency and transparency
  • Digitizing and simplifying F&I
  • Expanding nationwide sales

I believe digital retail is one of the most lucrative investments a dealer can make. As OEMs push for more emphasis on customer experience, digital retail answers the call, backed up by additional benefits to employees, managers, and business metrics.

Avoiding inventory frustrations

OEMs understand how frustrating it is for customers to navigate inventory shortages. Out of stock vehicles, markups, and long waits for factory orders have negative effects on customer satisfaction and loyalty. 

The inventory shortage might be letting up a bit, but there’s still a gap between what dealers want and what OEMs can deliver. And even once production resumes normal capacity, OEMs have indicated they’re not looking to go back to giving dealers 100+ days worth of inventory

Instead, they’ll try to strike a balance—not as low as the 1-5 day stock at the height of the shortage, but perhaps a 60-day supply. To succeed with this refreshed approach, dealers must have a seamless, integrated, and efficient sales process that gets customers through the deal quickly. 

Four Honda trim options are presented at the stage in the build and price process where customers select their make, model, and trim. On the right of the page, an image of the selected vehicle and trim is spotlit.

OEMs will also lean on dealers to continue to embrace in-transit and VIN-less deals. These kinds of deals, facilitated by digitals retail tools, help further optimize inventory so dealers have exactly the stock they need, nothing more and nothing less. 

Evolving from lead-gen to online car-buying 

Gone are the days of a simple lead-capture form that connects a customer to a salesperson. Now and in the future, end-to-end online car buying is becoming more central to the way the auto retail industry operates. OEMs can see that as more customers utilize online car-buying, their satisfaction rises. 

I’ve seen dealers have great success when they set up their website so it’s stacking high-intent deals, not just leads. When a customer hits your website, they should be able to do everything online if they want to. That includes getting chatting with sales, getting a trade-in offer, applying for financing, and even closing out F&I, contracts, and delivery. One dealer using Upstart Auto Retail is now able to complete 67% of its deals remotely

For now, the power to run an all-online deal still lies with dealers. OEMs have expressed interest in launching Tier 1 end-to-end car buying particularly for EVs. Now is the time to strengthen your position with OEMs by optimizing your online deal capabilities to capture the most digital customers. 

Speeding up the process

One way to significantly improve customer experiences is by reducing the time each transaction takes. OEMs and dealers alike know that cutting down the average 3-hour deal duration makes strides towards a more modern journey. Digital retail comes to the rescue. 

For instance, certain dealers using Upstart Auto Retail have experienced 86% faster sales and 90 minutes saved per deal. Those reductions not only make for happier customers. They allow dealerships to handle more deals and open up more opportunities, which can lift total revenue and salesperson earnings. 

Improving consistency and transparency

From my time working at OEMs, I know how much they value consistency and transparency for their customers. The price a customer sees online would ideally be the same one they see at the dealership. And when they get down to details, the customer wants to be aware of anything that ups the price—fees, taxes, add-ons, and the like.

Upstart Auto Retail pricing customization and protection plan menus

In fact, OEMs, customers, and even the FTC have all joined in a similar conclusion: car-buying transparency is crucial. It can set a strong tone of brand experience that carries throughout ownership. Trust and transparency in the transaction can make customers more likely to come back for service and for their next car. 

Digitizing and simplifying F&I

Waiting on F&I is one of the top frustrations for car buyers, especially millennials and Gen Z. OEMs care about the holistic customer experience and brand sentiment, which can be negatively affected by a frustrating experience in the finance office. While OEMs don’t have much say in the matter beyond their captive lenders, they can encourage dealers to make the process simpler with digital solutions. 

What if F&I could be easier, faster, and more profitable? That’s where digital F&I comes in. Whether handled by the traditional finance office or a single-point-of-contact salesperson, this digital retail feature gives the full experience in a digital setting. 

Managers can desk, structure, negotiate, and approve deals right from the app. Customers can apply for credit, choose a loan, and even pick from a self-serve menu of add-on products and packages. And the finance office can collect documents and signatures there, too. 

Expanding nationwide sales

Online car buying allows a dealer to easily open up its market geo nationwide, instead of only competing locally and regionally. For OEMs, that means customers in out-of-stock regions can still buy from their brand. It also means a customer faced with no inventory at their local dealership can easily source their preferred model across the country—and avoid having to choose a different OEM locally, instead. 

For OEMs, tapping into the revenue streams of online car buyers and nationwide customers willing to ship or travel to their dream car is a path to profits and future-proofing. The same benefits add to your dealership’s profits and broader brand awareness. For customers, it’s a way to expand their selection and easily acquire their perfect car, whether it’s down the street or across the country. 

Digital retail unlocks the gate between dealerships and the nationwide car-buying public already tapped by various startups. It offers a consistent brand experience whether the customer purchases down the street or on the other coast, another benefit for OEMs. 

Keeping up with the OEMs

To keep pace with the top-line initiatives of OEMs, I think you’ll be wise to place customer experience at the top of your own priority list. Speed, efficiency, personalization, and digitization in the buying journey will be crucial. 

My unique experience on both sides of the equation—in-house at OEMs and vendors, as well as on the floor at local dealerships—gives me critical insight into the careful balance of the dealer/OEM relationship. Following the tips above, you’re likely to stand out to OEMs as they dish out incentives and plan for the future of auto retail distribution. 

For more on this topic, I also dive into OEM/dealer expectations in a recent webinar with Driving Sales: Turn casual shoppers into high-intent buyers

 


About Andrew Kuntze
Experienced working with car dealerships and at OEMs (Kia, Mazda), Manager of Implementation Andrew Kuntze helps dealers launch optimal online digital car-buying experiences. His work in customer service, marketing, sales, and management means he knows how to drive dealership revenue at every turn. He resides in Austin, TX, with his wife Kristen and three dogs, where he fills his free time with sports, computers, animal rescues—and of course, all things automotive. 

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