How to Increase Your Dealership Sales and Profitability
Despite the digital disruption and new ways to research and shop online, the dealer is still an integral piece of the sales process. Consumers may do the majority of their research online, but they still want to head into a dealership to take that test drive. This means there is plenty of opportunity to influence shoppers across their entire purchase journey – from initial online research to critical point when they step onto the lot.
McKinsey & Company conducted research on how car consumers shop and what they expect from a dealership. Key findings included:
- 85% of customers still use the dealer touch points, but 1 in 4 customers is not satisfied with his dealer experience in the car buying process.
- More than 80% of customers take test-drives during the car buying process, underscoring the continuing strategic importance of dealers.
- More than one-third of customers would consider buying a car online.
- Over 80% of new-car and almost 100% of used-car customers now begin their journey online, meaning that dealers have lost their role as the primary source of information as well as their power over the information shared and their ability to influence the customer.
- Almost 90% of customers use dealer web sites or OEM web sites in the early steps of their decision making journey.
These statistics clearly indicate a need to be more digitally present throughout the purchase journey. Consumers follow different purchase journeys and use a variety of channels to gather information on their prospective vehicle purchase. An increasing percentage of these channels are online. This is especially true among millennials, who use social sites, blogging forums, OEM and dealer web sites, and online review forums to gather information and compare offers. In fact according to McKinsey, close to 90% of millennials use online sources for vehicle research.
During this initial stage of research, make sure you have established a strong digital presence to encourage engagement with your brand. Dealer websites should include lots of content, informational videos, interactive tools, strong SEO, and be optimized for mobile. Engage with consumers on social media. Encourage current customers to leave online reviews. Create YouTube showcasing your inventory and staff. The key is getting found online to be sure your dealership is considered as consumers move along their purchase path.
Dealerships must also get data savvy to target prospective consumers with the right message across whichever channel they may be using. This begins with knowing who your prospects are.
Start with the internal data you have and append your records with additional demographic insights or specialized sources of auto data such as the following:
Internal data includes anything sitting in a data warehouse, CRM system, or other sources that have not been integrated into your marketing database. Examples of internal data include customer service records, transactional data, credit card purchases, or email.
Data providers aggregate and source these data sets to compile additional consumer insights such as age, gender, and income. Look for a data aggregator who uses multiple sources of data including public records, phone directories, U.S. Census data, consumer surveys and other proprietary sources.
Example of the types of consumer data selects that can be appended to your database include Date of Birth, Home Ownership, Occupation, Gender, Donors, Estimated Income, Age, Telephone Number, Ethnicity, Credit Card, Hobbies, Language Spoken, Purchase Behavior, Lifestyle Interests, Presence of Children, and Investments.
VIN Auto Data
Specialized VIN databases can really boost your acquisition strategies with information on a consumer’s current vehicle Type (car, SUV, truck, van), make and model, year, vehicle history, credit score range, and garage data.
With accurate information on your prospects, you can be sure you are targeting just the right person with rich, right time contact. And in doing so, ensure you are driving more prospects into your dealership.
However, when a prospect finally walks onto your lot, your work is far from over. Of course, this is nothing new for dealerships but there are measures that can be taken to facilitate the sale. Most customers will always want to physically experience the vehicle before purchase as it is typically one of their largest investments. They also frequently seek expert advice on optional equipment and further services (such as insurance and financing options) as well as detailed information that is either not available or not conclusively answered online.
The McKinsey survey shows that over 40% of customers rank product expertise as the most important element of a dealer consultation. “As customers increasingly collect general information online, dealers are ever more being viewed as an advanced ‘second-level support’ for questions and doubts that neither the online configurator, the OEM website, nor the various car forums or third-party Web sites are sufficiently able to clarify. Market research shows that the need for further consultation after an online search is higher for cars than for most other consumer products, such as electronics or even pharmaceuticals. On top of this, advice on additional services around a car purchase will become increasingly important, whether financing options, insurance solutions, new features, or updates that can be sold to the customer during the lifetime of the car.”
From the beginning of the purchase journey to the moment a prospect steps onto a lot, dealers need to be sure they are providing superior customer experiences at every touch point. Dealers who can blend digital strategies with offline experiences at the dealership will attract more prospects, sell more vehicles, gain more repeat service revenue, and substantially increase dealership sales and profitability.
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