Hold the Scone. This Is What Customers Really Want At Your Dealership
A beautiful showroom and fresh pastries certainly aren’t going to lose a dealer points with their customers. It’s just that they apparently won’t score them any, either.
Although a DealerRater survey found that consumers are largely satisfied with their dealership experience, the two biggest complaints continue to be price negotiation and intimidating interactions with salespeople.
Transparency in negotiation and the quality of in-person interactions are more important than ever — especially since neither are part of the frictionless, fast and impersonal shopping experiences that modern consumers prefer these days. And, for dealers, matching this level of ease is no longer merely optional.
So what should dealers do to address the concerns? Sales experts stress several starting points.
Minimize Negotiation
Modern shoppers have little experience haggling in everyday life and are intimidated by negotiation. They are, however, very comfortable running price comparisons online — so dealers should digitally front-load as much of the price reduction process as they can.
“Hard bargaining has gone the way of the abacus in most economic spheres,” writes Ben Christopher in a Pricenomics article, noting that negotiating for a vehicle is historically tied to the largely lost art of bargaining for horses.
Christopher noted that even the few other areas of life that involve negotiation — calling to cancel a cable subscription or purchasing a house, for example — are usually handled indirectly by an intermediary, making car negotiation all the more uncomfortable for consumers.
How loathed is the practice? Just Google it. The first page of returns reads like an angry Yelp review, including articles like “Car Negotiating Secrets for People Who Hate Haggling” and sprinkled with words like “dread” and “stressful.”
“[T]he process of haggling for a car sticks around like a vestigial tail,” Christopher wrote. “What makes the car sale unique? And why, in the age of consumer protection regulations and online retail, won’t this economic anachronism go away?”
Embrace Digital Sales
Nobody doubts that your employees are great. Seriously, why would any customer not enjoy their experience working with them? Again, this one mostly comes down to a case of “it’s not you, it’s me.”
As with the observations around negotiation, modern customers simply don’t want another human involved in their shopping process — especially when they can handle that entirely on their phones, as is the case in almost every other phase of their life.
In fact, market research firm Root & Associates and CDK found that 86 percent of consumers would choose a dealership that offered an option to get the car digitally over one without that capability. Yet the same survey found that only 35 percent of dealership managers said they were likely or very likely to offer online retail on their sites.
Dealers certainly aren’t alone in this challenge. Digital influences up to 75 percent of consumers’ pre-store visits, yet is leveraged in only 46 percent of in-store shopping experiences, according to a report from Boston Retail Partners and Windstream Enterprise.
Stem Turnover
Improving transparency in consumer experiences could also be affected by high turnover rates in auto industry jobs. A NADA workforce study in 2017 showed an average three-year employee retention rate of just 45 percent in the retail automotive industry, with annualized turnover topping 80 percent for non-luxury brands.
Because of such employee churn, new salespeople might not get enough time to fully familiarize themselves with the vehicles on your lot. In turn, customers walk away from interactions with those newly hired employees feeling that they don’t have enough understanding of all the technology features and perks your vehicles have to offer.
High turnover also costs your dealership money. Based on the workforce study mentioned above, Hireology calculated that a 70 percent turnover rate among sales staff could cost a dealership $46,900 in a year.
Decreasing turnover and increasing your salespeople’s understanding of your products will result in a big payoff. Not only will you be able to move more vehicles, but your customers will walk away feeling well-prepared to get the most out of their new vehicle.
Don’t Push
Changing sales attitudes and tactics might be another place to start reshaping the customer experience. Car-buying expert and advisor Ashly Knapp said that transparency is key.
“Pressure sells cars, and a lot of people push that,” Knapp said.
But that won’t work with modern consumers, who are used to making spending decisions on their own terms, said Valerie Coleman, head of sales and automotive business development at person-to-person sales app 5miles.
“Poor customer service experiences or a perceived lack of transparency will drive customers elsewhere,” Coleman said.
Embrace Diversity
Knapp said it’s important to help customers feel comfortable with your staff — which is why dealerships should double down on diversity.
“At the dealership, you want to demonstrate that you have a variety of people working there,” Knapp said, adding that dealers should keep in mind that many, if not most, car decisions are made by women.
“Get some women on the front line,” Knapp said. “Create trust automatically.”
Show Off Your Team
Knapp suggested that dealer websites include an up-to-date “About” page with current staff photos to show potential customers who they’re dealing with — from salespeople to mechanics to managers.
Doing this helps potential customers feel like they know your staff before they even arrive, giving you an edge with a customer choosing between your dealership and a competitor.
Embrace Technology
Customers are increasingly seeking digital experiences when it comes to car shopping, especially favoring mobile devices for research and even buying. In fact, only 2 percent of Millennials reported not using a search engine during their car shopping process, according to Root & Associate’s research. In addition, about 45 percent are already using their smartphone or tablet to research their next car purchase, according to autotrader.com.
In other words, staying ahead of the digital curve will keep you in the front of potential customers’ minds — and getting onto their phone screens is a great place to start.
