Sonic Sees Big Wins with Consumer-Centric Initiative

April 1, 2015
steve@automotive.ventures

Sonic Automotive continues to make good progress with their consumer-centric initiative called “One Sonic-One Experience”. But they’ve slowed down their initial aggressive roll-out plans to take a more measured approach.

As reported earlier, Sonic is aiming to “reinvent the sales process” and get consumers in and out of the showroom in 45 minutes or less. The company has been working on this initiative since 2007, and is ultimately aimed at a very customer-centric buying process. They hope that the Sonic-One Experience will be a significant consideration in the consumer’s dealership selection vs. their competition.

The level of investment by Sonic up to this point has been significant – they claim to have invested more than $45.0 million over the last 4 years.

When the $250 million-plus initiative is fully implemented, Sonic is aiming for completion of a vehicle purchase in 45 minutes or less with no haggling on price – under the guidance of a single iPad-armed employee taking care of the customer from beginning to end. Sonic’s bet: The approach will eliminate the pain points typically felt by car buyers and thereby make the company’s stores a preferred place to shop.

Sonic leaders originally expected to roll out the concept across all of the company’s 101 stores in 2015 and 2016. But recent testing has tempered their aggressiveness, and they’ve reset roll-out expectations downward.

Automotive News reports that the “One Sonic-One Experience” is now live at all five Sonic stores in the Charlotte pilot market, and market share against local same-brand dealerships is rising at three of them.

Because of lessons learned in the Charlotte stores, Sonic plans to roll out the approach to other markets in phases, instead of all at once.

This spring (as soon as May) Sonic will start expanding the initiative to their second market, Chattanooga. The first step will be introducing new customer relationship management (CRM) and showroom tools to its stores in that geography. Sonic feels that adapting to a new CRM can be disruptive to a dealership’s operations, so it’s better to teach employees how to use the new software system before they switch entirely over to the new approach.

Having said that, the Chattanooga stores won’t adopt the new customer experience process until Sonic is 100% comfortable with market share and profitability gains in Charlotte. They hope to have a better indicator of the positive movement of these metrics by May of this year.

In February, Town and Country Toyota’s local market share was 22 percent, up from 14 percent a year earlier. It also rose sharply from 16 percent in January when Sonic abandoned a new store website that had been malfunctioning since an October launch.

In addition to the Toyota store, market share also is up at Sonic’s Infiniti and Cadillac stores in Charlotte. Share at the company’s two Ford stores, the last of the Charlotte stores to convert, is down year over year. The company has attributed the decline at the Ford stores to the “newness” of the initiative and to new hungry management at local rivals.

While market share numbers are up at the Toyota stores, profitability is apparently not as strong. The company reports there’s still work to do to improve profit margins.

But transaction times are improving. The Toyota store is now averaging under one hour. The other stores are averaging one hour to an hour and 20 minutes.

Sonic has recalibrated their expected timeline to roll out the initiative across all of their stores, and is instead looking at a three-year time horizon to get to 100% penetration of all 101 stores.