Six Ways to Keep Customers from Walking Away from a Deal
Getting a new car should be an exciting prospect. New technology! More comfort! That new-car smell! Owning a new car can certainly be exciting, but for many, the process of buying is not. The purchase process can feel complicated and overwhelming, leading the deal to fall apart. Using data from our 2018 study on recent post-purchase or in-market car shoppers, CDK has identified six different sticking points for consumers and recommendations for how dealers can adjust their processes to mitigate them.
1. Negotiated Price of the Car
Negotiating a purchase is not a common practice in most retail situations today. While some might enjoy it, many find it stressful and might feel doubtful about the price they paid. In our study, 80 percent of shoppers said they want to do more of the purchase process online so they can avoid negotiating in-store. This is especially true for the younger generation. In a separate CDK study polling Millennials, seven in 10 said they would prefer a fixed price across the dealer’s information channels and more than half said they’d like to do away with the negotiation process altogether. Consistent pricing builds trust with customers. It reassures them that no matter what path they take to purchase, they don’t have to worry about missed savings. How can you take action? Include tools on your website that allow customers to start the negotiation process online.
2. Transparency of Finance
Financing a vehicle can be the longest and most tedious part of the car-buying process. Waiting on the availability of the finance advisor, going back and forth on the rate, and waiting for approval makes customers feel like they’re being given the run around. Committing to a $20,000+ purchase is no small decision and customers can feel particularly vulnerable. More than half of shoppers said they would prefer to make finance decisions online. Selecting a loan from a list of banks was particularly high for the 18-24 year and 55+ age groups. Making these decisions on the dealer’s website provides transparency and allows customers to take their time to evaluate choices in the comfort of their own home. As some respondents pointed out, it can also save the embarrassment of being denied a loan, a quick way to sour a deal. How can you take action? Provide finance pricing online. Not only does this benefit the customer, but it allows dealers to choose which finance options to promote.
3. Negotiation of Other Products
Negotiation of add-on products and services often occurs during the finance process and can further alienate price-sensitive customers. Our research showed that shoppers valued choosing a service package, warranty and accessories online even more than choosing a loan. To avoid coming off as “pushy,” moving choices like choosing a warranty online allows the customer to consider their options, make an informed decision and gain the satisfaction of protecting their purchase. Additionally, giving shoppers an opportunity to add accessories to their purchase are a great way to make additional profit from an online shopper. In fact, 70 percent of customers said they would add vehicle accessories online. That percentage was even higher for millennials who like to customize their cars. How can you take action? Add service packages, warranties, accessories and other “add-ons” to online menus.
4. Value of Trade-In
Ah the trade-in, where the current owner sees the vehicle that took them on an epic road trip and carried their first-born safely home, and a potential buyer sees dings, stains and high mileage. Reaching an agreement on the value of the trade-in can often be the most difficult part of the deal for both the customer and the dealer.Eighty-five percent of Millennials said the attitude of a salesperson can positively influence them to choose a dealership and 95 percent said that a bad attitude would drive them away. Our study on reviews also revealed that the salesperson is often the difference between a five- star and one-star rating, Staff should focus on the on-the-lot experience – the ability to test drive the car is a major reason shoppers will continue to come to a dealership. Customers want a product expert and guide that can effectively demonstrate the vehicle features while helping them find the vehicle that best suits their needs. The staff also play a role online. It’s important that the dealer website has ways for customers to get questions answered quickly without calling the store. How can you take action? Training dealership staff to focus on the in-store experience is one of the most effective ways to build strong relationships with customers. Even before a customer steps foot on your lot, providing text message options and online chat tools can help connect shoppers with staff.
6. The Dealership Sales Process
Each element we’ve discussed contributes to the overall sales process. Consumers are no longer putting up with the three-plus hour in-store experience. When asked about their overall experience at dealerships, a majority of both Millennials and Gen-X said they had a negative experience. In the current age of retail, dealers need to have a shopping process that transitions from online to in-store seamlessly. If the option was available, 80 percent of shoppers said they would use online tools the next time they shop for a car. However, 78 percent said they still want to go in-store to complete the purchase of their vehicle. Both matter – which means dealers and the decisions that they make in creating positive customer experiences also matter. Dealers need to think about how their process makes it easy, convenient and enjoyable for a customer to buy a car.
How can you take action? Provide online shopping tools that seamlessly integrate with the in-store experience. Keeping your customers from walking away from a deal doesn’t have to be challenging. By addressing these six major points of contention, dealers can stay competitive in an ever-changing industry.