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Focus on customers not facilities, says ICDP

The look of a volume brand dealer’s showroom does not play an important role in a customer’s decision to purchase a car, according to research from the International Car Distribution Programme.

Its qualitative study with customers of C-segment cars who switched brands with their last purchase suggests that dealers investing millions of pounds to meet and, in some cases exceed, carmakers’ standards are wasting their money.

The outside appearance does play a role in the selection of dealerships to be visited but, says the ICDP: “The dealership should just be bright and attractive.”

The vital element, customers say, is how they are treated by the dealership.

ICDP identified four desires:

1. Customers want to be acknowledged but not over-powered when they arrive
2. Customers want time to explore the cars, which should be readily accessible
3. Customers want sales staff to show dedication and commitment and to spend time with them but not be intrusive or pushy
4. Customers particularly did not like sales staff who discredited the competition or were condescending.

These four points give credibility to the arguments of carmakers like Toyota for showroom ‘meeter-greeters’.

Toyota added this requirement to its showroom standards seven years ago and retailers say it can work well.

Some have adopted it in their non-Toyota showrooms.

ICDP found that test drives really matter.

Customers who weren’t offered one said it was like “not being allowed to try on a pair of shoes”.

While price, finance and trade-in terms are clearly important, they were not frequently mentioned by customers.

The internet is important; it is nearly always the first point of reference – usually the manufacturer’s site first followed by independent test results and comparison sites.

The study also identified two principal types of customer. Relevant set customers carry out a moderate amount of research.

Once they have worked out what they want, they tend to make a purchase as soon as a ‘good’ dealer offer has been made.

ICDP says: “What might surprise dealers and manufacturers is that these customers are often ready to switch brand even quite late in the purchase process.”

The other main type is the relevant price customer. They decide what car they want quite quickly and are then thorough in pursuing the best available price from multiple dealer offers.

“There are straightforward lessons for dealers and manufacturers,” says ICDP. “Be less fixated with the detail and splendour of facilities and be more fixated with meeting customers’ reasonable (and differing) needs.”

#AM_ART_SPLIT# Another report from ICDP challenges the belief that UK dealers face higher standards than their main European counterparts.

Its findings on aftersales standards show that equipment costs are actually higher in Germany for premium and Asian brands, although volume brand requirements are higher in the UK.

Average equipment cost for premium brands in the UK is just over £40,000 per site, although the highest is £70,000; for volume brands it is around £25,000 (peak is £50,000).

Asian brands are £12,000 (peak: £15,000).

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