As the nationwide lockdown is lifted, restrictions are eased, and the auto retail landscape begins its slow climb back to a more normal state, dealers will be challenged with how to turn stock faster and more efficiently.
At CarGurus, we understand how difficult the past year has been and we’ve gathered key learnings on behalf of our dealer partners for how to adjust your business practices in the aftermath of crisis and position your dealership for future success.
Adapt to changing buyer preferences and behaviours
Throughout the Covid crisis and recent lockdowns, prospective buyers have increasingly turned to digital tools and resources for safer car buying.
According to CarGurus’ Consumer Sentiment Study from November, a fully digital vehicle purchase has become a more desirable option to many buyers, but it’s still not the preference for most.
While 63% of buyers say they’re open to the idea – compared to 42% before the pandemic – only 31% say they would prefer to buy online.
Certain parts of the buying process have more appeal digitally: buyers are more likely to prefer online price negotiation (56%) and online financing (35%).
Now is the time to appeal to every buyer, regardless of their preferred means of transaction.
The coming weeks and months will be a pivotal time to address this divide between those who prefer digital buying tools and those who are eager to return to more traditional retail habits.
Make sure to lay the foundation now for a strong digital retail offering now by bringing more parts of the purchase process online, such as financing, so that you can maximise sales during this ongoing period of transition.
Don’t just focus on the retail aspect of your digital presence, though.
Optimise your website across both desktop and mobile, maintain a strong digital presence – including reviews, pricing info, and contactless services – and continue to be as transparent as possible.
Allocate your marketing budget where it will have the greatest impact
Many car dealers see the benefits of digital and how it helps them reach more qualified customers quickly and efficiently.
As the world adjusts to the new normal, now is the time to look more carefully at who your buyers are and what resonates most with them.
As attitudes are changing, buyer behaviours might be different than you're used to and could warrant changes in your sales or marketing tactics.
Use buyer data to design new strategies. For instance, mobile is an increasingly important channel for connecting with consumers.
59% of car buyers, and 83% of millennials² report using their mobile at the dealership. The most common activities include checking specs and shopping competitors. Is your mobile advertising strategy addressing these behaviours?
In addition, with the transparency online research offers, buyers can confidently narrow down their consideration sets of dealers before ever stepping on a forecourt.
As a result, car buyers typically only contact dealers they’re seriously considering—so dealers need to catch their attention early.
According to our 2021 Buyer Insight Report, the average buyer visits only two sellers before purchase.2.
Digital enables you to target your advertising efforts more accurately and improve online tracking so that you can spread your marketing spend more efficiently.
The more efficient and targeted you can be, the greater the advantage.
Capitalise on pent-up demand through thoughtful lead management
Even during the recent forced closures of dealerships, many buyers continued to research and look for their new cars online.
Now that dealerships are reopening, those shoppers are ready to start visiting forecourts and making enquiries.
The key to capitalising on this pent-up demand will be handling the leads effectively by replying quickly and following up frequently.
Most buyers (86%) say that they wait until they are at least somewhat certain the vehicle is a good fit before submitting a lead through a car shopping site and about half (45%) wait until they are very or extremely certain.2
This underscores the importance of lead management, as the majority of lead submitters are serious buyers who have narrowed their consideration set down and are closer to purchase.
Technology makes lead management easier and more streamlined. For example, chatbots can be used to provide personalised responses to common questions outside of business hours.
Similarly, email automation allows for nurture campaigns that move buyers down the sales funnel.
With the right approach, execution, and tracking, dealers small and large will be able to better capture and convert more leads into car sales.
Light at the end of the tunnel
While there is still a long road to recovery ahead, it is clear that car buyers will be returning to market soon.
The future of car buying might look a little different, but dealers who are willing to embrace a digital-first, efficient, and targeted approach will be well-positioned to reconnect with buyers and maximise ROI.
Author: Wendy Harris, senior vice-president of sales and UK managing director at CarGurus and PistonHeads
CarGurus UK Consumer Sentiment Study, November 2020, N=502
2 CarGurus 2021 Buyer Insight Study, Q4 2020, N=1,508