Time Ticks Away at Dealership Satisfaction

Only a few months into 2023, we’re seeing new spikes of demand return to dealerships and inventory is somehow still in flux. But when we talked to dealers about their outlook for the year, their primary focus wasn’t on the cars on the lot. Their top issue is delivering a terrific customer experience. That was chosen as the top goal five times more than managing inventory to maximize profits in our 2023 Friction Points Study.

We surveyed over 1,000 car shoppers and worked with the NADA Academy to ask dealers similar questions from their perspective to create this year’s report. As we’ve seen in previous years, there’s typically a gap between these two groups, but that gap shouldn’t be difficult to overcome if customer experience is truly the focal point.

Every Minute Counts

A stark realization sprung from our report in 2022. No matter the diligent work done by sales or the F&I office, the amount of time a customer spent to complete the transaction impacted NPS and customer satisfaction scores. And knowing this was the problem at least a year before didn’t lead to an improvement. The number of shoppers who reported a transaction taking two hours or more rose from 43% to 46% this year.

Just crossing that two-hour mark sees a 12-point drop in NPS from +54 to +42. It drops another 9 points crossing three hours and bottoms out to just +3 if the transaction takes four hours or longer. Customer satisfaction scores also drop, with the most significant fall dropping from 71% to 54% after three hours.

CDK Global also tracks shoppers monthly to gauge how easy it is to buy a car. In February, we saw a significant improvement in time expectations. Two out of three shoppers said it took the amount of time they expected or less. The shoppers who said it took more time fell from 42% in January to just 34% in February.

The needle may be moving with improved inventory, but dealers should take any gains here as possibly fleeting. Are they focusing on how they’re moving customers through the process once they enter the dealership? Are their digital tools used by shoppers before they arrive? And are they staffed properly?

Staffing in Flux

As the industry adjusted to reduced inventories, they also adjusted their staffing. Perhaps due to outside factors in hiring and retention, or the reality of fewer cars to sell, the number of sales representatives per store we surveyed fell from 17.4 before COVID-19 to 11.3 today. While it’s a remarkable drop, it didn’t impact the shopper or how much time they spent waiting on a salesperson. Most sales tasks actually saw a drop in time spent waiting, whether it was the test drive, selecting a vehicle or delivery.

The shift in staffing led to adding more F&I Managers, which our study shows was a smart choice. This crucial part of the sales process led to reduced NPS depending on how long shoppers waited. While 65% of shoppers waited between 15 and 45 minutes, the NPS score fell from +44 to +25 after the 30 minute was breached. And hitting a 45-to-60-minute wait time dropped NPS into the negatives at -22.

Staffing moves by dealers seem to directly address this friction point. While Sales representatives dropped over the past three years, F&I Managers rose from 3.1 to 4.4 per store.

Aiming Technology at the Waiting Game

Dealers looking to improve their customer experience should now see how reducing the time spent completing a purchase is crucial. So how do they reduce it? Modern retailing tools are regularly used by dealers, with 84% saying they engage some level of digital retailing. However, there’s a huge drop in how many use these tools in the store. Only 30% of dealers said they use these tools in their stores. And with so much focus on customer experience and even inventory, the use of digital retailing falls to a distant third on a dealer’s list of strategies for 2023.