A decade ago, it wasn’t uncommon for a car salesman to spend 6-8 hours with a single customer. They would show the customer 3-4 vehicles, answer broad questions regarding the make, model, and basic amenities, and guide them through a very choreographed sales process.
Fast forward to today, and the sales model has completely changed. People spend approximately an average of 2 hours at a dealership when they go to make a purchase.
Because of the internet.
The Internet Changed the Process
Years ago, the sales process consisted of 5 clear and defined steps:
Enter → Research → Dealer Visit → Decision → Ownership
It was a very linear path and oftentimes, the research was done simultaneously as the dealers visit, when the salesman would inform the customer on vehicle stipulations and the differences between makes and models.
Nowadays, the process is much more fluent and the research is done independently by the consumer. There is a self-serve mindset that allows the customer to receive instant information about the vehicles they research and compare.
This is due to the rise of mobile devices.
Over ⅔ of auto shopping is done on mobile devices because the consumer is always shopping. The average American touches their phone screen 3,000 times in one day, meaning the ability to look at cars and conduct research can happen all day. Anytime, anyplace.
The internet provides an immense amount of transparency when it comes to cars and MSRP pricing, so there is less haggling and negotiating and customers know that if a dealership won’t give them the price they found online, they can go somewhere else. It’s a Buyer’s World, instead of a Seller’s World.
Old selling tactics won’t work in today’s car-buying society. So both consumers and dealerships need to understand how this process has changed and how the system works to be effective for everyone.
How Has the Sales Process Changed?
Consumers start with more information
Thanks to the internet, auto shoppers start the process with more information than ever before. In fact, 42% of customers know the make and model of the vehicle they want to purchase before even setting foot into a dealership. 32% know the dealership from which they are going to purchase a vehicle. This means dealerships have gotten more competitive in their advertising because they aren’t just selling cars anymore – they’re selling their services, their sales team, and their dealership as a whole.
Because users know more information before even starting the initial research step, the urgency to buy has increased.
2. Consumers look for maximum transparency
During the research portion of the car-buying experience (that is now a constant, ongoing process thanks to the “always shopping” mentality), people are visiting an average of 12 auto touch-points before making a final decision – and this doesn’t include advertisements seen on social media or online.
Because consumers are spending more time researching and conducting more thorough research on auto websites and 3rd-party platforms, it’s important that a website provides the most information possible – including pricing.
80% of buyers are looking at prices first during their research process.
Most websites only provide approximately 40% transparency and consumers are being more selective about which dealership they use. So it’s crucial to auto dealerships that their website be top notch (and mobile responsive) in order to compete with other dealerships in their area.
3. Consumers need validation when choosing a dealership
Inventory variety and vehicle pricing make up for 50% of why a consumer chooses a specific dealership when going to make a purchase. And one of the most important factors is knowing they aren’t getting ripped off.
Consumers need price validation.
This is critical for locking down customers and creating loyalty in your buyers. Everyone wants to know they are getting a good deal. When a consumer is at a dealership, it’s likely they are looking at the same vehicle online, whether it’s on a manufacturer’s website or a competitor’s website to make sure they are getting the best deal possible. And they aren’t afraid to go elsewhere if a dealership won’t match the price. Make sure your sales team is providing a coherent and comprehensive experience – your online information must match what is being presented in person.
Dealerships need to be aware of how they reach out to potential customers during the early stages of the process, because that will ultimately affect their decision to make a purchase or not. Consumers want to be contacted in a way that is most convenient and comfortable for them – if they reach out via text, email, or Facebook, respond to them using the same method of communication. This puts the consumer in control, which is vital in converting a lead into a customer. They choose the method of communication – it’s the dealership’s job to present the right information at the right time.
4. Consumers visit fewer dealerships and take fewer test-drives
The decision process is one that consumers make quickly after completing their own thorough research.
In fact, on average, Americans contact 3.1 dealerships, physically go visit 2.1 dealerships and only 1.6 test drives before deciding which car to buy. Because they already know the make, model, and dealership before going to purchase a car. This ties back into the first step of the new sales model, making sure you are selling the actual dealership instead of just cars. Make your dealership appealing and trustworthy and the sales will come. Have a positive online experience that offers full transparency and the sales will come. Provide your users with all the information required to make an informed decision, and the sales will come. See a pattern?
Because consumers are doing most of their car-buying process before even setting foot into a dealership, it’s important that dealerships offer a pressure-free environment and deliver a simple, fast purchase experience. All while providing full transparency.
It’s simply a matter of how consumers are purchasing vehicles and how dealerships are adapting to those changes and how the sales process as a whole is changing to fit the needs of consumers.
Dealerships are competing more avidly with local competitors and now, they’re even competing with interaction-free car-buying experiences.
How has this shift affected the way you buy or sell a car?