AM Online

Purchase funnel is 'a thing of the past'

Research data on the buying experience dominated much of the session entitled ‘The Changing Face of Car Retailing’ at the SMMT Summit.

Neel Desor, commercial planning director at Haymarket Motoring, and Robert Ellis, founder of COG Research, gave a joint presentation using answers provided by more than 200 new car customers, looking at their expectations, influences, how they influenced others and what improvements they wanted to see.

Desor suggested that the traditional idea of the ‘purchase funnel’ – the customer’s starting point with the car they have now, the one they’d like to have and a sensible choice, going through to a final decision and sale – no longer exists.

“Customers are unpredictable and what they eventually buy might not even be on the initial shortlist,” said Desor.

He split the new type of customer into three categories – speed chooser, benefit maximiser and car enthusiast.

Other findings included:

  • Advertising is the biggest trigger to getting on the customer’s shortlist
  • The deal on offer trumps the cost of ownership
  • A likable dealer is a stronger factor than brand trust
  • Trade-in price matters. People don’t like to lose money on the sale of their existing car. They would prefer a deal with a better trade-in price than a poor new price and would rather minimise the loss than maximise the gain.

The issue of test drives is a key one for the customer and the dealer, but Ellis and Desor argued that it was for confirmation, not conquest.

“It’s not the test drive that loses a sale, but the fact of not getting one if and when you want it,” said Ellis.

In their research 34% of buyers took only one test drive, 12% took three and only 5% took four or more.

Neil Packham, Manheim Retail Services sales director, presented research data from 18 car brands, including at least 60% of each of the dealer networks.

He said a professional lead management system was an excellent way to drive sales, and highlighted the cases of the three worst dealers in the research.

They had a total of 140 leads that weren’t actioned.

Packham also said persistence was the key to winning over a customer.

“You can’t contact them too much as long as it’s done in a professional way,” he argued.

David Vernon, a manager at automotive retail performance company Urban Science, looked at marketplace trends from the US.

He said it was inevitable that an increasing number of sales leads would come from the internet, but believed dealers needed to manage that effectively.

“ after an email or website enquiry, there’s an expectation that the dealer will respond within an hour and there’s a significant drop-off in conversion to sale if it’s left as long as two hours,” he explained.

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Login to comment


No comments have been made yet.