Sonic Automotive is trying to change the way its industry conducts business. A Fortune 500 company and member of the Russell 2000 Index, Sonic is among the largest automotive retailers in the United States. With its One Sonic-One Experience (OSOE) sales process, the company is looking to revolutionize the dealer model. “We are very excited to deliver the One Sonic-One Experience initiative to our guests,” President and Co-Founder Scott Smith says. 

Sonic Automotive was launched as a public company in November 1997 with 20 stores, representing 15 brands and several hundred employees. Today, it operates 107 dealerships spread across 14 states and 25 major metropolitan markets.

Its dealerships provide comprehensive services including sales of both new and used cars and light trucks, sales of replacement parts, performance of vehicle maintenance, warranty, paint and collision repair services, and arrangement of extended warranty contracts, financing and insurance for the company’s customers.

Sonic is working to reinvent the dealer experience from the bottom up through the OSOE approach. OSOE is designed to change the process of car buying by making it more like a retail experience than purchasing a home. By removing haggling and sales pressure and providing quick checkout, minimal documentation and extensive support, Sonic believes OSOE can be a model that will change the face of the industry.  

At a Premium 

The goal of OSOE is to create a premium car-buying experience. Although that doesn’t necessarily mean higher cost, it does mean the creation of a more trustworthy sales process and removal of high-pressure upselling.

Part of Sonic’s plan is to change the way it advertises and brands the Sonic experience. The company aims to create TV commercials that tout “1.A.D.” – after traditional dealership. All OSOE dealerships will be branded as “Sonic dealerships” to convey that they provide a consistent experience.

OSOE dealerships will include open space and touchscreen displays that can provide customers with information on OSOE. Customers will have the freedom to look around the showroom and conduct their own research online at in-store kiosks. 

“Our new guest experience puts the guest in charge,” Smith says. “Our guests will find upgraded Sonic Automotive sub-branded facilities that support our manufacturer partner brands.” 

Crucial Technology

Investments in technology have been critical for Sonic to bring OSOE to reality. Of particular importance is the Sonic Inventory Management System (SIMS), which allows Sonic to centrally manage inventory on lots, as well as the sales price.

The SIMS investment allows Sonic to remove haggling and inventory selection from the local sales manager’s hands. It also makes the sales process quicker and easier. 

Sonic also invested in CRM tools and app development. Its OSOE dealers have software engineers that can make adjustments to technology based on sales floor requirements. Sonic can also centrally manage customer service and used car acquisition and sales thanks to its technology investments. All told, Sonic has spent five years and nearly $150 million on the development of OSOE.

“Guests will find state-of-the-art technologies, paperless environments and helpful associates that are paid to execute and deliver an experience unparalleled in the auto retail industry,” Smith says.

Pricing Strategy 

Fixed pricing is a key part of the OSOE strategy. Sonic lists its final, already-reduced prices online, and its proprietary pricing algorithm can adjust pricing at a central level on a daily basis and in real time. Training for the salesforce helps resist moves toward traditional haggling.

The fixed pricing strategy has been combined with technology to result in 60-minute start-to-finish transactions. In fact, Sonic indicates that some transactions have taken only 30 minutes. 

The human factor is also critical. OSOE stores employ salespeople who have consumer retail selling experience outside the automotive industry. Instead of being paid on commission, personnel are paid a fixed salary and have performance incentives that can be based on customizable metrics and management objectives.

“Our goal is to allow the guest to control the process and move at their pace so that once the vehicle has been selected our team can go to work using these processes and technologies to get our guest on the road in their new vehicle,” Smith says.

In development since 2007, Sonic started implementation of OSOE in the second half of 2014. Sonic believes it has made significant strides by investing in changing its dealership-level culture and creating a new shopping and buying customer experience. “Our investment in these initiatives will not only benefit the new, pre-owned and finance and insurance (F&I) revenue streams, but will also enhance our highly profitable fixed operations business,” Smith says. 

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