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A Manitoba dealer group has developed its own system for fully digitized sales done completely online by the customer, eliminating mountains of paperwork and “revolutionizing” the finance and insurance business.
And when the system is made available to other dealers across Canada later this fall it will leapfrog established industry leaders, beating them to market with a fully integrated digital sales system.
Birchwood Automotive Group of Winnipeg says its Simplify system has proven since 2013 it can significantly increase gross profits per vehicle sold.
Birchwood developed the system with long time digital services supplier, Vancouver-based IA-SAL.
While digital technology has become part of the Business Office in most dealerships, for the most part digital tools stick to their respective functions.
So the current operating procedure for most dealerships still entails lots of data re-entry in the presence of the customer, tailored F&I product offerings that have to be done manually and with printouts, and lots more paperwork requiring in-person signatures.
F&I integration
The product will revolutionize the industry, says Michael Rawluk, Birchwood CEO. “We’re basically going to leapfrog the (digital sale) development that has been going on in the U.S. … we will accomplish what Sonic has been trying to accomplish [only] we’re going to accomplish it first.”
The Simplify system fully digitizes sales completely online, including pursuing and selecting relevant F&I products, and full credit approval.
Birchwood made the strategic decision in 2012 to develop the system on its own.
“We wanted to increase F&I profits, improve customer engagement and transparency, streamline processes and improve compliance,” said Rawluk. “We could only do that through software development and working with our main strategic partners and suppliers on integration.”
IA-SAL, a long-time F&I supplier to Birchwood, agreed to integrate with the new system and support its development. Other strategic partners include RouteOne, ScotiaBank, and CarProof. IA-SAL saw the integrated system produce surprising F&I sales results at Birchwood and approached the group about taking the product to other dealers. The two partners then formed a separate company to modify and market the product, now called Simplify.
Luc Samson
Currently two dealerships are testing the system: Park Avenue Honda in Brossard, Quebec, and Classic Honda in Mississauga. IA-SAL will lead the project as it rolls out, says Rawluk.
Luc Samson, VP Sales, IA-SAL, notes the rapid consolidation of dealerships of late has exacerbated the problem of digital integration in the F&I office where one group may have as many as six different DMS systems. He says Simplify can be integrated into any DMS.
“But at the end of the day we will be able to gather all the information in the same system,” said Samson. “This is my promise to the industry: to provide the dealer network with digital technology that will give them the ability to do the whole deal in one system.”
Tablets, e-signatures
The system allows customers to follow a transaction, or even drive the process on a separate screen or tablet from the one used by dealership personnel.
If for example, a customer wants to know what an extended warranty would add to the monthly payment, says Rawluk, the customer can simply request the change on the tablet, and the system would automatically reach into the warranty company, pull the rates, and complete the calculation.
“So you get rid of all that clunky manual stuff, or the FSM working behind the screen,” Rawluk says.
He adds the customer can also go through the menu at home, and continue the digital process as far as they want to take it.
“All the contracts and paperwork are automatically generated, and we have full e-signature in our group,” says Rawluk.
Paperless workflow
“It’s transformed our entire dealer group to a paperless workflow. When the customer signs on a pad, contracts are automatically sent to them by email, just like the Apple Store.”
Samson adds that accuracy and compliance are also increased: “If one signature is missing, it won’t allow you to deliver the vehicle.”
Because Manitoba now allows e-signatures for contracts, a fully online sale is possible. Rawluk notes, however, that the group insists they meet customers in person at some point, out of concerns about compliance and identity theft.
New flexibilities
It’s one thing to have digital F&I tech, another to use it to its fullest potential, says one service provider.
“New technology puts the control in the [customer’s] hands. Some dealers understand that and will benefit from it; others will be challenged by it,” says Alan Bird, CEO of SCI Marketplace, which offers both CRM and credit portal platforms.
Bird believes technology such as tablets, mobile apps, secured links and other digital solutions can be used to push what used to happen in the business office “further upstream.”
There is no “one-point-in-time solution,” he said. “F&I products need to be available when the buyer is ready to look at them; that might mean upstream or in the business office.”
Bird said customized F&I presentations based on data technology harnessing what you already know of the customer, and a strategy of asking the right questions, will better match products to each customer to improve profits and customer satisfaction; basically, less products offered with higher take rates.
Merger of roles
At the Birchwood Group, the combination of integration and a customer friendly digital road map means sales staff help customers deeper into the process, and into traditional Business Office territory.
“You could sit with your sales person and go through the entire process, start to finish. So we’re really talking about the merger of roles. It also gives the customer the option to start the transaction online, and go to the end if they want to, but at any time they can come to the dealership and pass the baton to the salesperson to carry it to the end.”
With Birchwood customers “in control” they can also easily choose to “not select” any F&I products on the online menu.
Rawluk realizes many in the industry think this is a deal breaker, but Birchwood contacts “non-takers” with a follow-up phone call or email.
And the numbers speak for themselves: “We’re up approximately $1,000 on F&I gross profit per vehicle since 2013.”
Canadian dealer group rolling out 100% online sales goal
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