The business of selling cars has changed and achieving a high-quality, personalised, ongoing interaction with the customer has never been more important for winning and retaining business. It is proving to be a key differentiator for many vehicle brands and dealers.
If the deals are becoming more transparent and customers are able to compare and contrast online more effectively than ever, dealers must also look at other ways to stand out and make the customer’s entire experience more enticing.
The future could be all about adding value to the deal, whether that means incentives or simply the ease of transacting.
Gerald Grimes, managing director at Hitachi Capital Consumer Finance, said: “Buy Now Pay Later finance options are a fantastic way for dealers to stand out from the crowd by attracting consumers who wouldn’t necessarily have the capital to purchase a vehicle upfront.
“The idea is to use promotional credit in the same way that the retail sector does to increase footfall and close more sales; which helps dealers to boost their profits.”
Grimes believes this type of promotion will become more common in the car market and has already delivered a sales boost for early adopters, such as Vertu Motors, of more than 11%.
The UK’s largest dealer groups are already taking other actions. Pendragon’s policy is to enable consumers to choose any of its stock and have the car delivered to their most local outlet in the group.
Lookers’ Charles Hurst division introduced a transparent fixed price policy for used cars to remove the haggling element.
“It came about because people told us they didn’t like haggling, so we took that away – and it’s worked,” said operations director Colin McNab. “We back it up with our price promise to give people confidence to come to buy and know they have got a good deal.”
Buyer confidence is an area of focus for Arnold Clark Automobiles too. In October 2016 it introduced 7.9% APR fixed rate finance on all its used car stock “for consistency and transparency with customers”, said managing director Eddie Hawthorne.
The stock is marketed with a ‘Best Deal Guarantee’ which promises to refund the difference if a cash buyer finds the same car cheaper at another franchised dealer group, or to refund double the difference if the customer is on Arnold Clark’s finance.
“Our customers won’t find a cheaper used car anywhere else, we’re confident about that. Because we know our deals are the best, we have a no-haggle policy,” said Hawthorne.
The group also tempts propective buyers in for test-drives through regular giveaway campaigns. Its Drive The Night Away event in April 2016 offered a hotel stay for two to every test-driver, and resulted in 4,380 car sales.
Of course, adding value to the deal is nothing new to the industry. Focused tactics such as free service plans or MOTs for life are already in some group armouries.
Dealers such as Mitchells in Cheshire and Robin Appleyard in Yorkshire offer a free weekly wash and vac as a way to enhance the relationship with the customer. It keeps the business in the customer’s mind, and occasionally can help the service department to spot any reconditioning work.
Paul Inness, international strategy director at CDK Global, said: “Dealers need to think about the before, during and after. It’s not just about how they act when the customer turns up to buy.”
The before is more critical than ever. Make it easy for the customer to conduct as much of their purchase journey on their own terms as they wish, and give them early signs of confidence and competence.
Tim Routledge, chief experience officer at Experience Insight, said: “Our research shows price is not the only driver. People are ready to pay more money for the kind of relationship and the right kind of service and that only comes with the right kind of human contact, by being authentic.”
Tim Smith, group strategy director at GForces, said: “Provide value and transparency with integrated reviews. Allow them to research funding options specific to your stock, without redirecting them to somebody else’s website. Create dynamic, virtual tours that show the interior and exterior of each vehicle in exquisite detail, complete with interactive highlights.
“If you don’t give them a reason to go elsewhere, then it’s far less likely they will. Does your offering and marketing deliver on every level a connected consumer expects?”
A GForces client saw a 20% increase in new website visitors following changes suggested by a content audit. For another, embracing a multi-channel marketing campaign resulted in a 50% increase in website visits – with a 43% increase in converted leads.
Inness believes the future includes personalisation of digital content, and websites adapted in terms of layout and content based on a customer’s digital personality.
He said: “I think the approach will be for the dealer’s website to display only the models that a customer is interested in along with tailored finance packages and customer reviews related to those models from that dealership. It makes the customer feel it’s all about them and that is the key.”
Online reviews in the dealer space still have some way to go, compared with those in the travel and leisure sectors.
Mark Lange, chief marketing officer at Reputation.com thinks most dealerships that have already adopted reviews don’t focus on increasing the volume and quantity of the content to make it worthwhile.
Considering that a typical franchised dealership could be selling more than 700 new and used cars annually, displaying two sentence reviews or ratings from a couple of dozen buyers falls short of creating a real sense of trust.
“Other people’s experiences are highly credible to consumers and search engines rank dealer locations based on volume of reviews. Reviews that are recent, accurate and abundant make the difference between making sales and losing business,” Lange said.
The messages and offers need to be consistent when a customer does turn up at the showroom. The sales team needs to be aware of behaviours that could compromise the sale. Experience Insight calls them ‘tripping points’ and has researched when they occur and how to avoid them.
Routledge explains: “Anything that deviates away from the expectation someone has can damage the relationship and make it less likely to get to the point where they buy the product or service. They can be tiny but they can really build to make the customer feel that the purchase isn’t the right thing for them to do.”
Tripping points can be as simple as not having enough parking spaces for customers or not offering them a cup of coffee.
More detailed research carried out with Honda identified a large tripping point occurred when a customer had to fill out a finance application form.
To improve the experience the salesmen now stand with the customer and help them to fill it out. This, combined with other changes, has resulted in a 30% improvement in sales over four years.
Are existing customers more valuable than new ones?
Paul Inness (pictured) believes dealers should worry less about attracting new customers and focus more on the ones they already have.
“If you think about the retention process; consumers are loyal to a brand but when it comes to the ownership experience they are loyal to a dealer. What dealers can do well is make sure that their ownership experience is exceptional.
“There’s a thrill to buying a car,” he added, “but service and maintenance is a necessity so that process needs to be as painless, smooth and stress-free as possible. Those interaction points will define whether they come back to you.”
Inness recommends that dealers embrace technology to handle the organisational side of their operation, allowing the people to focus on interaction and rapport building.
He said: “The best dealers blend people, process and technology together. They’ve got clear process for managing customer arrivals, the staff is fully trained and they use technology to help execute that.”
Matt De Prez