CarDekho, India’s #1 online automobile portal, in collaboration with FADA (Federation of Automobile Dealers Association) presented the Ninth Auto Summit, themed on ‘Digital Dealer – Accelerate Opportunities.’ The biennial conference underlined the standing of Digital ecosystem in today’s automobile business. The summit focused on various B2C technologies like virtual showroom and augmented reality platforms along with several B2B technologies solutions like lead management system, branding solutions, digital marketing and other cloud solutions.
The Auto Summit 2016 is one of the largest conferences that facilitate dealers and OEMs to learn and enhance their knowledge on new technologies to run their businesses efficiently. The theme this year stresses on the importance of adopting digital technologies or ‘going digital’ in the backdrop of an increasingly digital era. Close to 600 auto dealers from all over India and many OEM manufacturers attended the event.
The event unfolded with an inaugural session and a welcome address by Mr Jayant Sinha, Hon’ble Minister of State for Finance, Government of India; followed by addresses by Mr R C Bhargava, Chairman, Maruti Suzuki India, Mr Rajan Anandan, Vice President & Managing Director, Google South East Asia & India, Mr Ravi Pisharody, Vice President SIAM & ED Tata Motors, CVBU, Mr K V S Prakash Rao, President, FADA and Dr Kailash Gupta, Chairman Auto Summit 2016.
The speakers in their respective sessions to the automobile fraternity brought out the necessity of proactive presence in digital space to become imperative for a competitive edge in the digital and communication era. Digital intends to help acquire new customers and provide support in plugging leakages in order to improve productivity with efficacy.
The Ninth Auto Summit's theme was Digital Dealer along with a tagline – Accelerating Opportunities. It's primary focus was to make dealers understand the significance as well as perks of their digital presence. The event opened with auspicious Ganesh Vandana followed by welcoming honourable chief guest Mr. Jayant Sinha, Minister of State of Finance.
Kailash Gupta, Chairman, Auto Summit 2016, initiated the inaugaration of the summit and struck the chord by highlighting key points such as challenges for the current dealerships along with adding a bullet point of digitization can open end number of ways that favour their business.
According to him, dealers understand it is need of the hour, are gradually adopting digital practices such as a prominent social media presence, developing mobile application and online advertisements, in a bid to increase their customer base. Like several foreign countries, dealers in India are also adopting these digital practices without help of the OEMs. In European markets, almost 20 percent of the dealers have in-house digital team and setups, while India stands nowhere in that area and they have a long way to go.
Then Prakash Rao, President, FADA took the stage and displayed an interesting data of 3 leading dealers of the largest selling car manufacturer in the country, contribute 8-9 percent of the cars sold per year. They have the manpower of almost 15,000 whereas, for the manufacturer it is 13,000. Hence, it is difficult to comprehend the reason behind lack of support for the dealrships. As the total industry volume remains flat, there’s an urgent need of drafting new policies from the government's end to promote automobile industry.
Once the spotlight was on hassles faced by the dealers, Ravi Pisharody, Tata Motors' executive director, CMV said - "Getting a talent for a dealership is challenging. But adopting digitization practices can be a problem solver."
On seeking out a ray of hope, Padmavibhushana awardee RC Bhargava remarked upon the rapidly growing economy - “The auto industry is and has been in the fore-front of Make-In-India.”
Nikunj Sanghi, then introduced Jayant Sinha, the Minister of State for Finance, a Member of Indian Parliament and formerly an investment fund manager and management consultant.
Sinha holds an M.B.A. with distinction from the Harvard Business School, an M.S. in Energy Management & Policy from theUniversity of Pennsylvania, and a Bachelor of Technology degree with Distinction from the Indian Institute of Technology Delhi. His prior business experience includes twelve years with McKinsey & Company as a partner in the Boston and Delhi offices.
The major take away in hon'ble his address adverted towards what we've inherited and where we are headed and our country's exceptional achievement of macroeconomic stability in last 20 months. Around the world, FDI is declining and in India – it has gone up by 40 percent. He emphasized on the fact that turbulence around world, hasn’t affected us and we are the most stable economy today.
Mr. Rajan Anandan, Google MD, South East Asia and India affirmed, India is changing. “t took 110 years to reach a billion people, 49 years for TV, 22 years for voice phones, Internet 14 years and smartphones almost 8 years. So, next big thing will take less than this. Around the globe, there are 7 billion people and 3 billion are connected and by 2020, 6 billion will be connected." He mentioned an interesting example of music industry, where in last 10 years – the industry has completely gone digital.
He further mentioned that in coming 15 years, computer will be smarter than humans and a driverless car is the best possible portrayal. 75 percent buyers research online while buying a car. 54 percent change their consideration after searching on internet. 33 percent year-on-year of dealership search has increased. He concluded putting forward a fact - "Consumers are a decade ahead of businesses."
Katsushi Inoue, President & CEO- Honda Cars India Ltd., overwhelmed the audience with his presence and said - “New age digital tours can be effective only if you can derive where to associate. I will conclude saying that, there will be ups and downs in business environment but together, dealerships and the manufacturers,we can certainly take the automobile industry to the next level, globally."
John K. Paul took over the podium to give a vote of thanks to his audience. "I assure you, the automobile dealers under the shadows of FADA will continue to work jointly with all stakeholders for sustainable growth and development on the auto business as a whole. ”
Amit Jain, CEO and Co-founder, CarDekho soon conquered the the stage with a couple of groundbreaking analysis and facts. Step by step, he inspired his audience to go digital and make their daily life and business more than just profit-seeking struggle. He strategically proved and compelled his audience to accept, how an online presence will meet the unspoken requirements of a dealer and after walking a mile they will be able to achieve a high standard in this domain. „The world is on Internet. Now, it's our turn to get a grip on World Wide Web and how we will mould ourselves is something that we have to determine today. One is required to be well versed with grassroots of a business as well as pros & cons of running it in a conventional way. “ said Amit Jain.
He enlightened the dealers present about a tested technology known as call tracker that says - 45% of the calls that are actually sucessful conversions, are in fact missed by the dealers. So, what one is in need of, is a system that won't let you miss the conversions. He explained about the technology step by step in which revenue is earned by a medium of a recording device that saves data of all the calls you receive, then the data is transferred to the executive.
He described the persona and possible actions of a buyer. "You need to target a customer from that point itself, the moment he approaches you to ask for a price or your advice to buy his dream vehicle. If you go Digital, he has seen what you offer before hand and then he will remember you. When you can actually reach the masses via internet, then why open a dealership at a location? When you can reach people who want to buy a vehicle, then what is the point in spending a large amount of money just to approach someone who is no different?" - said Amit Jain. He later described his organization as a charoit carrying his audience's business. He demonstrated conventional way of setting up a business as well as marketing model and wanted the people in this industry to get the best possible ROI and marketing model.
Amit Jain says that the 70% of the customer base in this domain is present online. Out of them, 40% have already decided the car they want to purchase and 80% of them will seal the deal with the first dealership they approach. He illustrated to the crowd how have an online presence that is mobile friendly, SEO-friendly, lead generation friendly and privileges of the same. „It's not just about the information and wide variety of choices that you provide. Give them a little bit more than expected; such as captivating offers and an option to grab the best deal at a location.“ As the conventional way of promotion extracts a good amount of money as Customer Acquisition Cost, generating leads costs nothing when done online. Additionally, a dealer can keep a track on every lead that he generates making digital platform 10 times cost-effective. He further said, that digitization of the business will not only help generate the business, but will improve it too; via classifieds and auctions, giving dealerships better price relaization, access to wider customer base, transparency. All of this with low amounts of working capital."
He further compared the presence of an online showroom with a existing one along with a technique that lets the dealer increase his catchment area. As the 'How to go Digital?' journey began, he depicted with an illustration the steps to do the same. Cherry on the top was introduction of a mobile application that is custom-made for the car dealerships. "Its not an app, its a vehicle towards change", he says. Dealer Mart app intelligently bifurcates a salesman's daily routine at one place with an option of generating reminders, that organizes his finicky daily routine; all without messy paper work. Its a wonder app that lets a sales executive address his customer's queries with a single click. It generates price quotes, let you download brochures, monitors daily performance, identify loopholes in sales process, with User Car Exchange on the fly. Moreover, you can facilitate the auto finance via app. All of the above add-ons come with ease of keeping a tab on the assigned targets.
Amit concluded his session by giving away 5 key points that will ensure a success in the digital world.
A panel discussion took place on a very important question - where are the leads?
Mr. Umang Kumar, President at Cardekho.com; Delna Avari, Head of Marketing and Communications at Tata Administrative Services; Yashish Dahiya, CEO and Founder of Policy Bazaar; Siddharth Puri, Tairu Digital Media were the key speakers in this session. "Performance Marketing is basically lead generation linked with sales," said Nitin Himansinka, MD, Karini Group.
A handy discussion was carried forward on this agenda and Umang explained the concept of lead management funnel, it is initiating a lead, then generating a lead to the most critical piece of dealership and follow-up. "What determines your entire ROI from digital leads will be the entire funnel and the dealership interaction and follow-up, followed by test drive and finally the booking yielding into a retail. It's not just about negotiating on the cost of leads, it's about the value you are able to extract from those leads", says Umang.
How does a dealer actually manage leads better? How do you improve the measurement and ROI of the digital leads by levering technology?
Amit covered this a little bit but what an appropriate team structure is about and I'm going to be discussing this with Nitin and the others to get maximum ROI from leads and what's the incentive structure you should put in place to achieve this.
Umang raised a question for Delna.
"My First question for Delnas for you is, you've been one of the first company to adapt to retailing to digital leads. How have you seen the car buyer habits evolve?"
"Do I need to do digital? That time is gone! We all know for the longest that the way car buyers are coming in, we have enough statistics to show that 60-70% of the research is actually happening online before a person is even walking in. For Tata Motors, when we started this journey in 2012, when we partnered with Cardekho.com, the reason we partnered with Cardekho is that we used to buy leads. That was not enough! Every conversation was about cost-per-lead. It is all about actually, what do you do with a lead? It used to be very difficult for us to attribute because everyone is searching in the online space and it used to take seven weeks to culminate on an average. So, even if you have done a good job of branding and they are searching, and maybe they didn't get the right information or maybe the dealer information was not accurate of the impression of the dealer was not upto the mark, they change their decision. So, these are somethings that I wanted to get started as to what is happening with our leads and you? There is a lot of work that is happening with what the manufacturers are doing but a lot of the onus is actually on the dealerships because more and more people are saying, my relationship is beyond the car and with the dealer. I leave you with that thought Umang." said Delna.
Umang: "Nitin you have worked in an active proponent in digital leads over a last few years, what have been your experiences with your dealership with digital?"
Nitin: "When we started out, the biggest problem was there was no mode to measure anything. So, the problem is that if you don't know how to measure, you don't know how effective it is. We had all forms of leads which were coming in and it would get distributed the way it used to be. Now what we have done is we have constituted a team who only deals with leads that come via the online medium from websites like Cardekho and we have been able to track that in more detail. If you breakdown a dealership's basic process, it is to generate leads and the surprising part is most of the dealerships don't track their leads. And we have systems where someone is doing an entry on a database management system and the sales team is connected with what is actually being updated that is being done by a third party. That is where the dealer connect is and that is where the disconnect is as people are unable to understand how digital leads work because they have not seen the effectiveness at the dealership level. So, what we have done is have a team seperately only doing this so we can actually see what is the conversion rate."
Umang: "Yashish moving on to you with the same query. Someone who manages half a million digital leads, has over 1000 people interacting with customers on leads, what are your experiences and how do you see it evolve over the years?"
Yashish: "When we started out we used to essentially get these leads and pass them out to insurance companies. Now, we have something called a stamping system. A stamping system like a gating system like children going to class 2 have to go via class 1, similarly, there are five to six steps. A customer could be interested which means they could be if the call lasts more than 30 seconds or if he calls in the second time, all the aforementioned are signs of interest and then we call someone a prospect. A prospect is somebody who has agreed to purchase. He has not purchased but committed of purchasing on a particular day. The third step is called booking when a prospect has initiated a purchase. In the insurance world, a lot of cancellations happen post payment also, so the funnel continues post booking all the way to insurance. The point I'm making is there is a up or out at every stage, a time limit after which a lead has to move out. In our industry the sales cycle is about three weeks and in the dealership industry is about two and a half months. So, in your industry, lead management is far more important than in our industry. Unlike a travel plan, leads managed by us or the dealership require far more interaction and follow-ups."
Umang: "Siddharth, what are some of the best practices that you have seen in past few years, considering you provide leads to pretty much every sector in the country?"
Siddharth: "Adding to Yashish, on internet, a consumer will be searching on google but that does not translate into purchase of a vehicle right now and within that conversion cycle of two and a half months, what we have interestingly analysed, irrespective of the industry is that the concentration cycle filling out to lead is actually double. Which means if you talk about insurance where the sales cycle is three weeks, you can easily take customers have been considering of buying an insurance from six to eight weeks ago. This does not translate that the prospect is actually buying a product. He/She is just contemplating whether I need the product or not. So, there is one step which is called intent. So, how in your lead management process do you get ready for that and converting a lead into a sale becomes very very critical."
Umang: "Ashish you were talking about an individual who maximised on conversions happening through warm leads. Can you elaborate on that?"
Yashish: "So, we have been getting conversion of about 6-8% wheras this individual was able to achieve 12% on a regular basis and he has a very small structure. For us, we had leads over 45 days old, which overall being handled by a team. Now, this person was following up and converting leads six months old as well. And he never went overboard or irritated the customer to acquire a sale. So, overall, you have to find a balance between conversion and leads where you could be using references as well from warm leads."
Umang: "Delna, you were saying attribution was a problem earlier. How would you say the market over digital leads has evolved?"
Delna: "Earlier, dealerships were not considering leads coming online as it was way below 1 % of the total number of prospects walking in. So, on the whole what happened was digital leads were overtaken by other mediums such as newspaper ads etc. as digital leads take a while longer than other media. And you had to go through with certain steps with select delaers who actually did it. So, they put a seperate team who were only following up on digital leads. They knew it was a longer time frame. They then started witnessing success. Today, about 25% of the leads are originating via digital media and we are today able to attribute it. And you have seperate teams who are actually focussing on it. Now, we have moved away from cost per lead and now we focus on cost-per-acquistion. So, the model we are working with, even with Cardekho the compensation is based on acquistion. What I have seen is that qualified leads have fallen. So, the number of leads coming in has fallen almost 17 – 18 %, but our retail has gone up 200%. Which means the work we are doing in the middle of qualifying leads and putting the ones which are not upto the mark and saving resources in terms of the qualified sales person getting warm or hot leads to close the prospect is better with a different team dedicated on follow-ups etc. By doing so, costs have come down 77%."
Umang: "Nitin, on the same point, you are a believer of digital from the start, on the same leads, you have seen progress from 5 – 13 %, so what happened?"
Nitin: "A lot of people who want to start their digital journey after this, the biggest problem is that it does not happen overnight. Like Yashish said, a lead conversion would take 40 – 45 days now takes about two and a half months, when you start to get those leads in, you have to be patient as it builds up over time. As an example, the 1000 leads received from Cardekho, out of them, 301 leads are still live. It would take about six to eight months for the process to kick in and then you start getting regular conversions. As sales guys, they want to see all the hot leads and convert them and pass off groups of warm and cold leads, though they may be warm now, they could become hot leads later. If you keep mining that data over a period of time, obviously the conversion goes up. Compared to a policy bazaar, dealers don't get so many leads. So, following up on such leads takes about three months to close them."
Umang: "Yashish, on the same note, what have you seen on seggregation of leads, because the automotive industry is thinking of an enquiry, test drive and booking etc. In terms of digital, it becomes a raw enquiry or a hot lead etc, so any thoughts on that?"
Yashish: "We have a fairly sophisticated model and we look at about 27 parameters and the moment a lead comes in, it gets a lead score. That lead score, statistically, 97% of the leads, over the past few years, predicts pretty much what that lead is going to get – basis historical data ofcourse. Now, what we do is, whenever a person comes in, for the first two to three months, because they are not trained and insurance sales is not a very easy sales process, they do not get high-quality leads for the first three months, but we never tell an agent what the lead score is however, every agent basis the premium he has done in the previous month and not what the lead score is. So, if somebody did Rs four lakhs premium in the last month, he is going to get Rs four lakh worth of leads. When you think about it, its not that straight forward to implement, but it runs day in day out. There is one more point I wanted to mention is that Delna mentioned, we went to the exact process that led to our changeover to digital. We used to pass on enquiries to all the insurance companies and they started segregating with regards to amount of insurance, cities etc. Eventually we were left with only 16% leads going to them. It basically made no sense. So, in 2011, we just stopped the lead business altogether. And that is why we have an in-house call centre and we started doing all the sales ourselves. Initially it was tough, but in the next four months, it incorporated a lot of learning for us. Ofcourse there is a lead score model etc., I totally agree that it may just lead to 70% of your business by 70% of leads, but the point is how do you value those 70%. And there is the rest happening from other people also, so, its a difficult topic, but cost per acquisition takes the responsibility away from the buyer is what I think."
Umang: "Siddharth, what are the best practices you have seen to improve conversion ratios?"
Siddharth: "The journey, behaviour or in short the concentration cycle of the consumer is very important to understand. What we started to realise three or four years ago is that it was the peak of push SMS marketing, cold call marketing etc, so, by default the consumer would give a 'cold' shoulder. Even till date, that is a very important loophole everyone needs to work on. One needs to understand that calling up and asking if someone filled in their detail for a car's test drive, may not entice a positive response. One needs to be sensitive towards what time of the day are you calling the lead. You also need to be sensitive towards the profile of the consumer. That is very critical. So, understanding the loophole where the consumer says that I did not submit a form, post which when we looked further into the problem and started to work with brands directly, that is when things turned around."
Umang: "How do you generate leads? Future trends? Specfic to auto industry..?"
Siddharth: "China has a system – partnered with cab company(Didi Kuaidi) that enabled auto companies to gauge what kind of a person or lead would it be. And for which segment. Cab driver asks the passenger if he/she would want to visit the Ford dealership which is on their way. Delivering the prospect right at the dealership."
Delna: "40 % of digital leads is via mobile platform. Keeping a good relationship with a lead. Way you post your ads. Lot more of programatic buying. Happening on the OEM site. Lot of intellgent buying. Kind of leads coming in are better. Not the same ad is going to everyone for the same product."
Nitin: "Customers are more informed. More specific questions. Ask for more comparisons. Intent to purchase is higher. Gauge customers intent very closely."
Another very stimulating discussion took place on a topic, and this time it was moderated by Mr. Amit Jain.
DIGITALIZATION OF DEALERSHIP IS THE FUTURE?
Vidyasagar Baliyara: "What adwords are and how they work? Adwords is a google tool. Best customers is who has the technology. Do you think they will take a look at a print ad in today's world. They will use google search. That's where Google Adwords help."
Vikas Jain, Hyundai Motors: "How do you digital contributing to numbers? Clearly that is the future. Big change is the young population and how they have adapted to digital. Capable of multi-tasking. They are always online and we need to adapt ourselves. All of us need to digitise for future customers. Look at the best deal over smartphone and tap on it."
Mr BS Jong, Hyundai Motors: "How digitalisation is happening at hyundai? At HMI, we are studying how to adapt to digital marketing and develop it. Customer leads through digital marketing. Customer leads is okay, most important thing is how to follow-up with the right intent. If you cannot follow-up with the right way. Digital market is the way future."
K chandrashekhar, Dealer: "Your thoughts on digitization? It is the only way you can survive in future."
Nalin, Cardekho: "Your thoughts? Digitalisation is not just the future but present as well. I'll represent the dealers today. Have apprehension – if they go more into digital, they are losing control over their consumers. Is that true? Personally feel that the more you digitalise. More transparent. More control of the system."
Amit: "More of partnership as cardekho cannot survive on its own. We are bridging the gap. Already seeing some top dealers goinng digital. Sales go better."
VidyaSagar: "Future is here, future is now! We have to embrace the change. You won't lose control. Customer decides what they will be deciding for communcation. Study reveals that b/w May 2013 – 14, no of smartphones session went 30% increase. But no session timing has dropped. Has internet all the time with them. Second largest smartphone market in the world. No longer a choice. It is more of adaptation."
Nalin: "Embrace the change leading to something positive. Consumer is shopping 24X7. Inherent challenges of not having 100% test drive ratio. Observed real solutions. Trying to address manually with little or no success. So, digital works."
Vikas Jain: "If you adopt technology, you will get solutions. Agree with Nalin."
Nalin: "Key focus/issues and problems where digital can make a big difference. BS Jong: My 27 years of experience and through my experience, as a dealer technology is important. Who will follow-up and who will check. Issue is quality manpower that has improved but will improve further. Else utilisation is not complete. Making of technology. After that who will handle. Key people working with you is very important. Quality Manpower is most important else technology will not be fully utilised."
Nalin: "Why does it happen there are problems. Can digital improve this?"
BS Jong: "Customer enquiries are enough of not? Should we digitalise the organisation and improve quality of manpower who can follow-up."
Chandra shekhar: "Process execution is also important. Key parameters – manpower, technology, and execution. No of enquries through digitalisation can improve. Nalin: Amit, Lot of techs are explained. Is the tech available or adopted or can it be used today by dealers?"
Amit Jain: "Not adopt to it right away. First prepare your base. People sell cars. Trained manpower to use technology. Digital does not work until people are not trained on it. If you are not measuring, you cannot improve at every step. Sagar, how come google helps catch consumers."
Vidya Sagar: "Tech in itself cannot solve problems. People are important. Improve customer experience."
Nalin: "To dealers – If an ad is release by the manufacturer or communlatively by dealers. Will 100% calls be answered and taken care of? No. Industry has started working with various OEMS and dealers on tech solutions. From a particular ad can get entire detail of the call and recorded as an audit mechnaism. How would you control this? Can't do it manually. This is where technology comes into play. Amit?"
Amit: "Technology has to go a long way, but it has come a long way. Spending on a lot of money will be needed. Do not invest digital until your manpower is ready. Nalin: Vikas, on latest trends on adoption. Profitable business? To understand things are evolving at a phenomenal speed. We have to change technologies, tools available and train manpower for it. Whats holding on in adopting them? Issues will remain till we develop the road map for adopting technology and start discussing the future. Same for profitablility. Start measuring everything to the brass. You need technology and every employee to record data. Google talks everything about analytics. Retail world is completely controlled by analytics. Skeptisism to adoption to new technology. Change with your environment changing around you."
Rakesh Batra, Partner at EY along with the panelists Sharad Verma and Rajan Pental discussed the problems faced by the dealers to go digital, digitization and lastly, the customer experience through digital intervention. The highlight was that pre-owned car business is a potential for a profitable business for dealerships. Finance, leasing and dealer desk does play an important role in all these channels. When it came to digitization, the pace of the evolution has increased and more virtual showrooms, online partnerships are coming up.
The next question in motion was - Why do we actually need a dealer sales executive when all the tasks can be performed through the online channel? The obvious answer to this one was that a dealership requires a transaction specialist as well as losgistics personnel. "In today's world, digital to more profitability. Digital plays very imp role while eveolving a business. Digital has to be culture in your organisation else after sales will get affected along with sales. Not only lead management, the way today's generation is engaging, it is very important for people," said Sawhney. Another point of view was presented by Rajan Anandan that customer is knowledgeable and this industry has to get ready for the eveolving ecosystem.
The conference came to an end with an address given by Vignesh, Director of FADA Dealers saying - "In terms of profitiability, digitisation has improved a lot. And evolution of the dealership is happening. Getting closer to the customer. Shelf life has increased. Generally, we need to have higher soft space or online space."
A lesson is to be learnt from the emerging markets, solve the problems that were left unsolved and the need to increase the know-how of the manpower before there is any sort of digitization that happens.
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