As the race to electric vehicles heats up, dealerships must rethink their entire business models or risk stalling at the starting line, say retailing experts.
Hossein Hassani, vice-president of EV Ecosystem at General Motors of Canada, speaking at Automotive News Canada’s Retail Forum: Dealer Discussions, called the switch to EVs “the most consequential transformation in the auto industry since its inception.”
It means dealerships have to revise their pay structure, find new ways to stay engaged with consumers and immerse their sales staff in the EV culture, experts on the Oct. 6 panel discussion said.
Dan Broderick, CEO of western Canada-based Capital Auto Group of dealerships, said it’s critical for dealerships and the industry to move beyond the monthly sales model to a long-term play focused on tomorrow’s sales as much as today’s.
“I think as an industry, we have to get away from that 30-day mindset, that zero-to-30 as fast as you can and back to zero,” he said. “As soon as you shift that mindset from the 30-day business cycle, it allows you to begin contemplating structures, compensation plans and communication strategies to better meet some of those needs.”
Jeff Williams, CEO of Absolute Results, which trains sales staff in North America and Europe, said dealerships must change the roles of sales representatives and focus on product education and product experience.
'FUTURE PROOF' YOUR TEAM
“Now, in order for that to happen, and to futureproof your sales team, there has to be a shift of culture from a pure sales culture to more of a customer experience culture,” he said.
That requires changing how sales staff are compensated, he said, since commissions are likely to be fewer and farther between. He noted in Europe, where countries have shifted far more towards EVs than North America, sales processes to conquest customers — those coming from another brand — take on average 4.6 visits to the dealership, compared with two visits for customers staying within the brand.
Williams advocates paying staff based on different key performance indicators (KPIs), that reflect how well the customer is treated even when a sale isn’t completed that day. “Until you change how people are rewarded, you’ll never have that culture change in the store.”
Hassani said General Motors is focusing on training all staff in dealerships, from the receptionist to the sales person to the finance manager, on electric vehicles.
'PEOPLE WILL HAVE QUESTIONS'
“As we move past the early adopters and into that mainstream customer, customers are going to be on the fence,” he said. "Those people will have questions, and any staff member they are likely to interact with are experts who can provide “quality interactions.”
Omira Janmohamed, GM Canada’s manager of EV readiness, said communicating with customers throughout a lengthy order delay is critical, as customers may have more than one vehicle reserved, opting to see which vehicle arrives first.
She said GM is preparing dealerships for the expected drop in service revenue — since EVs require less maintenance — through training staff to provide “service-lane excellence” to make their stores the service provider of choice for customers of EVs and internal combustion vehicles alike.
Hassani recommends, as product becomes available, that dealers immerse staff in the EV experience through long-term demo loans. “I’m not talking about taking out a demo for a couple of days… We’re talking about living with an EV for months at a time to experience the user experience of home charging, public charging, road-trip charging, all of that.”
All four experts say the tipping point of price parity between internal combustion and electric is closer than many think, and will accelerate the market’s shift to EVs. Janmohamed pointed to next year’s launch of the Chevy Equinox EV, expected to start at $35,000, as an example.
