How has the customer journey evolved in the past decade?
The days of customers beginning their journey in your showroom are long gone – but what have they already done before crossing your threshold?
E-commerce has had a pretty substantial presence in the car industry ever since it started its rise to prominence in the 1990s. After all, a car is, to many people, their second most substantial purchase after a house, and to those living in the rental sector, it’s often their single most expensive asset.
It’s no surprise then, that the amount of time spent researching a car purchase online is growing ever greater. According to research from eBay Motors, the average UK car buyer spends over 40 days from beginning their search for a new car to making the final commitment, while 2020 data from Auto Trader showed that 59% of car buyers did all of their pre-purchase checks online.
The upsell opportunities are more in areas like paint protection, accessories, service packages – they add very little to their monthly repayment but are good for business.
While the 41% of customers who prefer an entirely physical sale might make the car market sound in rude health compared with the beleaguered high street though, that’s not the case. When you factor out the number of customers who are either brand-loyal and always return to the same dealership (your dream customer) or those who buy lower-priced used cars, usually driven by a simple equation of price and suitability for need, there aren’t a lot of buyers left to go at.
And of those that do walk freely into your dealership, remember this: the vast majority of them know exactly what they want already.
James Baggott, CEO, founder and editor of Car Dealer magazine, said: “You can still get good conversions from walk-in customers, but the reality is that all of the information they need when choosing a car is there at their fingertips. By the time you meet them in the showroom, there’s a high chance that they know exactly what they want and how much they want to pay for it.
“You might be able to convince them into a higher trim level or even the next model up, but it’s rare. The upsell opportunities are more in areas like paint protection, accessories, service packages – the things they may not have thought of that in terms of a deal add very little to their monthly repayment but are good for business and make them feel good, too.”
His thoughts are echoed by Jack Woodgate, Founding Director of electric car resource JustGoEv. He said: “We’ve created an online platform that generally caters for people who are already a long way down the purchase funnel. The very fact they’re there shows us that they are looking to buy an electric or hybrid car as their next vehicle. Customers like that are generally well-geared towards e-commerce and won’t turn up at the dealership until they’re ready to do the deal and maybe even drive away the same day.
“For sales staff, new or used, that creates a high pressure situation as it reduces the time to seal the deal. As a former sales manager myself, I know how critical those closing moments with the customer are. The difference is that they know exactly what they want to buy, so your upselling opportunities are generally really limited. With EVs, there are new challenges for dealers, too, as aftersales opportunities are limited. Servicing is quicker and cheaper as there are fewer moving parts, there’s no oil, no fuel system.
“That makes aftersales opportunities such as tyres, brakes, safety checks etc much more important, while accessories and paint and interior protection are the way to enhance the deal at the point-of sale. These are things that will be even more critical in the future as car sales staff have reduced exposure to customers.”
Perhaps the biggest threat to understanding the customer journey though, is the massive growth in direct-to-your-door car sales, which have shot up more recently, especially through lockdown. The likes of Carzam, Cazoo, and British Car Auctions-offshoot Cinch are all promising hassle-free online car purchasing that makes buying a new car as easy as shopping on Amazon Prime (other online retailers are available!), even going as far as next-day delivery on approved used cars.
Carzam has gone one further, offering an online buying service as well, taking away one of the main reasons for a customer to turn up at a dealer to finalise a deal. If they don’t have a part-exchange to tie-in to the deal, then that’s another contact opportunity gone.
So, make the most of your walk-ins. Even if that customer does know exactly what they want already, conduct the walk around with them, explain why maintenance and servicing are important to them, and keep the conversation personal. And it’s never too early to talk about protecting their investment …..
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