The evolution of the consumer car buying journey.
To retain and grow market-share Australian car dealerships need to consider ways that they can better engage and add value to customers at all points in their journey from consideration to advocacy.
The traditional path-to-purchase is changing. In the past, prospective car buyers would dedicate a reasonable chunk of time to visiting a number of dealerships, discussing their needs with salespeople, test-driving different vehicles, comparing prices and features and then after some consideration making their decision on the best make, model, price and dealer. This process could take weekends, weeks or even months.
Nowadays more than 90% of prospective buyers are researching vehicles online – here they might look at the manufacturers’ site, seek the opinions of friends, family and colleagues via social media and seek the opinions of people they don’t even know via blogs and online forums. As part of this process they might use price comparison websites to help determine what they can get for their budgets. From here they’re likely to arrive at the dealership with a firm stance on what vehicle they want along with how much they’re prepared to pay – with compelling arguments as to why they won’t pay more. They’re also likely to be more ready to do the deal on the spot – perhaps at the first dealer they visit.
This empowerment of buyers in the sales process is driving change in the automotive industry. Europe, China and the US are already in the thick of it with prestige car companies like BMW, Mercedes and Audi opening brand/visionary stores not dissimilar to Apple or Samsung stores. At these stores people can interact and be entertained with the model, configure cars to their own specs, share their creations via social media and get brand/product gurus to answer their specific questions. In addition to this, in the US companies like Costco with huge databases and negotiating clout are acting as middlemen between their customers and the car buying process. This is where a Costco automotive rep does the deal on behalf of their customers and the customer might never even meet the dealer!
Fortunately Australia is some time away from the more significant global changes taking place so Australian dealers have the opportunity to nudge forward and refine their current customer marketing activities today – so they’re better placed when more significant changes hit.
For dealers the objective has to be on understanding and staying relevant to the needs of changing customers, all with a renewed focus on retaining and growing their market share within their defined PMA. Here are a few suggestions:
- We know that 90% of customers are researching online, so the first opportunity is to fully optimise the digital experience that prospective customers have with you, whether it be via desktop, mobile or tablet so once they make contact you have enough engagement tactics to keep them in a conversation. Your website should become an expert in nudging customers through those first few steps from consideration to evaluation – and best of all it’s working for you 24/7. Consider all the tools and tactics you could build into your website that are relevant to the needs of the prospective customer . Your content should set you apart from other dealers so that you’re better remembered by both prospective buyers and by Google – Google is constantly checking both the uniqueness and relevancy of your content. The more local it is, the better you’ll be positioned in local searches and the better your chances of engaging with locals at the ‘consideration’ phase of the purchase cycle.
- Experience and logic both tell us that the conversion rates by online and offline visitors within your PMA are likely to be better than those outside, plus those within are more likely to service with you and more likely to refer you to friends and family in the local area for the simple reasons that the experience was good and you’re conveniently located. Therefore focusing marketing dollars on online and offline acquisition channels within your PMA is likely to deliver a much greater return than investing elsewhere. Think outside the square; consider different ways to build awareness in the local community and to become the local expert. Promote this fact using low cost channels such as community events, partner alliances, local press and business networking organisations in addition to using adwords and other local online media such as the couriers. Also challenge the traditional purchase process and determine ways to make this more friendly and empowering for customers – move beyond the desk!
- A focus also needs to be on building relationships with new customers, retaining existing customers and potentially winning back those in your local area that have left you. This is where analysing data to understand your customers is important as it helps to pinpoint where they are in their relationship with their vehicle and with your dealership, and helps to determine the kinds of personalised strategies and tactics that can be utilised at key moments in their own customer journey to unlock value and to drive loyalty.
Like every business, return on marketing investment is of primary importance so processes and systems need to be put in place to enable you to test, track, analyse and continually optimise your customer marketing programs towards the best performing channels and tactics and the most responsive audience segments.
McKinsey & Company Research. Innovating automotive retail: Journey towards a customer-centric, multiformat sales and service network – Feb 2014, http://www.luxurydaily.com/mercedes-targets-young-affluents-via-digital-showroom-experience, http://europe.autonews.com/article/20130314/ANE/130309959/audi-bmw-mercedes-look-for-edge-with-virtual-showrooms