DrivingSales Presidents Club Key Takeaways: The Next Chapter in Car Buying
Hello, again — and welcome to the last installment of my 3-part DrivingSales President’s Club blog series; highlighting this year’s “Most Valuable Insight” competition. The last presentation I’ll be going over today is by Kevin Filan, VP of Customer/Industry Marketing & Events at Cox Automotive. In his April 1st presentation, Filan expanded on his theory that the landscape of dealership sales is being altered by ever-changing customer experience preferences.
According to Filan, the current shopping process plays out like so: Research → Test Drive → Deal Structuring → Pricing → Financing → Service. This process has been trained on and engrained in dealerships across the country for years. Many dealers feel like they’re “doing it right” because this way of selling has been extremely successful in the past.
The struggle is, data is showing that while this may be how the industry wants to continue to sell, the customer is starting to demand a different way. Progressive dealers looking to gain market share would be smart to pay attention to what kind of customer experience creates the best close and retention percentages.
This study commissioned by Cox Automotive lined up almost exactly with what a similar study from DrivingSales made clear. People will buy more and buy more often when allowed to shop the way they want.
The study analyzed a number of different sources: 13 expert interviews, 9 lead user ethnographies (or consumer types), focus groups with 40 new and used car buyers and quantitative surveys among 4,002 vehicle buyers and intenders. Out of the 4,002 consumers, only 17 were actually satisfied with the car buying process; and 66% were much more likely to buy from a dealership with their preferred experience. Needless to say, the statistics fully supported Filan’s theory. Here are the 3 major conclusions Filan came away with from the study:
Test Drives Aren’t Going Away
Although test-drives are part of the standard car buying process, Filan criticizes that they’re still a crucial factor in decision making. In fact, 88% of consumers would not purchase a vehicle without test-driving it first. What consumers DON’T want is to be pressured immediately after test-driving. 67% of surveyed consumers agreed that car buying is a big decision and consumers want time to mull over the details.
Online Deal Structuring is Ideal
You very rarely find buyers who are completely okay with buying at sticker price – and the data proves it! 56% of the consumers surveyed said they preferred to negotiate – which again, is a usual part of the car buying process. What don’t consumers like? Negotiating half the day in your showroom. After about 90 minutes at the dealership, buyers become inpatient and exasperated; leading to an unhappy customer. Data from the study has actually shown that 58% of consumers would be more likely to buy if they were offered online deal structuring – and 45% of those customers wanted to be anonymous throughout the entire process. In fact, only a miniscule 14% actually want to structure a deal on the lot.
So, Why Should Dealers Care?
It’s simple, really! According to Cox Automotive’s survey, 72% of buyers would be willing to visit dealerships more often if the buying process was improved. 53% of buyers even said they would buy more often if this were the case.
Given the current data, here are some of the improvements your dealership can make now:
- Don’t pressure customers after they test-drive. That will just push them away.
- Offer a system that allows consumers to negotiate deals online (perhaps anonymously). People don’t want to spend too much time in the dealership.
- Be trustworthy! This is a point that wasn’t previously made, but there’s no doubt that you want your guys to be as genuine as humanly possible. Even being offered the lowest price possible, data shows that 70% of people will simply walk away if they feel like they can’t trust the dealership.
Interested in learning more stats? Let’s chat! Give me a call at 800.873.3117 now and just ask for Stephanie!