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Delivering a Consumer Experience Online – The 5 Key Steps 

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The next great phase of the automotive consumer experience is happening online. Your buyers are not only purchasing online, but they’re also making intelligent decisions about payment plans, researching competitors, and weighing their options. And they’re doing it all in a matter of minutes.  

The good news is—if you’re smart—you can have an important role in this journey from the very first moment using insights and data from connected technologies and solutions designed to deliver the best-in-class consumer experience.  

Delivering the digital promise of a faster, more convenient experience for your buyers is within reach for any dealer looking to modernize. And when you follow the following five key steps, that are pillars for delivering an extraordinary online experience, your future will include higher quality leads that result in higher profits and increased business.   

#1: Build a Strategy to Capture More Leads  

More of the car shopping process is indeed moving online. But capturing a virtual shopper isn’t as simple as publishing or updating your website and waiting for your next buyer to offer up their information.  

Car shoppers are leaving hints about their intentions in various ways and it’s up to intelligent data and insights to connect and decipher who and what to do with that information. According to the most recent Car Buyer Journey study from Cox Automotive, 57% of those surveyed visited a third-party site without visiting an OEM site.1  

What does this ultimately mean to your business and marketing strategy? There’s no more room to sit back and passively wait for your next buyer to hand over their information. Dealers need to build a strategy focused on taking the data and insights from third parties like Autotrader and Kelley Blue Book and turn them into actions to take. That their solutions and team can act on easily and swiftly. 

How much of a difference could those third-party listings sites possibly make? Consider this: Autotrader attracts over 29 million unique visitors each month. How many additional car shoppers would you like viewing your listings? Build a strategy around that and align your business objectives with the partners that can deliver. 

Autotrader sees 29 million unique visitors per month. 2 

#2: Measuring Quality in a Quantity Focused World 

Once you set into motion the right strategy mix of tools and digital marketing solutions needed to drive higher volume to your listings, you’ll notice that not all leads are created equal. Although quantity is typically a focus, quality should be the true measure. 

It’s no longer about how many leads you get each day, but whether those leads are quality leads comprised of ready-to-buy shoppers — and how quickly your solutions and sales teams can tell the difference.  

There’s a stark difference in leads more likely to convert vs. leads that simply clog up your sales pipeline. So, what’s the primary driving differentiator? Smart data. Take for example Cox Automotive’s vast treasure trove of first-party shopper data drives nearly twice as many purchases to dealerships than any other third-party listing site. 

Chasing a few bad leads here and there may not seem like a big deal… until you do the math. Let’s say two salespeople working on 200 bad leads per month, at 10 minutes per lead, making calls, sending emails, videos and texting. Add it up and you’ve just wasted 16 hours of their time per person, every single month. Now look at what that looks like over a calendar year and you’re looking at 192 hours – that’s close to 5 full work weeks! 

Be sure to set up metrics and have discussions with your marketing team and leaders at your dealership or within your organization to discuss why quality vs. quantity should be your goal and map out how you’ll reach that. 

#3: Connect with Digital Consumers with Powerful Personalization  

As the old saying goes… It’s not just what you say, but how you say it. Now layer in and how the message is received when it comes to marketing around any large purchase decision—especially one as big as your next car.  

Total time spent by consumers researching and shopping is 13:31 

Personalization in digital marketing matters to your car shopper. Before you even begin building your strategy, make sure you have a partner by your side willing to work just as hard to understand your unique business goals, to provide personalized solutions and give expert guidance. At Autotrader, we’re constantly innovating our consumer experience to attract and retain more qualified, ready-to-buy shoppers and deliver higher-quality leads that close. 

Every month, over 4 million unique shoppers use Kelley Blue Book® My Wallet to help them find a vehicle within their budget and determine their estimate monthly payment.2 

2 Source: Autotrader and KBB.com Google Analytics January – August 2023 

Here are some insights revealed in the annual Car Buyer Journey Study to help you with delivering an experience with personalization which ultimately increased consumer satisfaction levels even more. Consider this a check list for you and your team to strategize around how to be the one that stands out to the consumer: 

Are you leveraging your consumer data to uncover shopper insights?  

Everyone has data – first party, second party and third party – but what are you doing with that data to activate it and turn it into actions you and your team can take to drive profits? That’s the key to data, use it to personalize your interactions and show you know who the shopper is, what they want, and you are the one they should do business with.  

Are you taking it a step further and tailoring your strategy to meet the consumer’s needs? 

Data and insights should reveal actions you should take, especially when it comes to how to personalize your marketing strategy. When you do this, you’ll have the ability to tailor the experience based on what the consumer is showing you they prefer and prioritize.  

Are you utilizing the power of personalization to lessen the chance of attrition? 

With increased cross-shopping happening due to affordability hurdles many of today’s shoppers are facing, it’s important to remember you can use personalization to not only capture new shoppers to you and your brand, but also to re-conquest previous customers and retain existing ones. Make sure to stay in front of your customers, in the right way, at the right time. Remind them why you are their dealer of choice… because you KNOW them! They already like and trust you – so build off that. If you lost some clients over the past few years, reach out to them showing you still know and value them and are ready to deliver the personalized experience they both want and deserve.   

 Kelley Blue Book ® My Wallet Enhancements  

To lead more shoppers successfully through the early stages 

of the shopping funnel and into the buying funnel, 

Autotrader is adding new features to Kelley Blue Book My Wallet, 

including Payoff Quote, Credit Verification and Lease Configuration tools, 

which will allow shoppers to get more personalized, accurate payment 

and price information, resulting in richer sales-ready leads for dealers.  

#4: Deliver the Digital Retailing Experience that Drives Shoppers to Purchase  

As more of the deal becomes digital, the car buying experience will become faster and more personal for your buyers. (That’s the goal, at least.) Miss the mark at that, and your buyers will go looking for a smoother, easier experience somewhere else—and quickly!  

90% of dealers surveyed claimed digital retailing had positively impacted at least one area of their business. 

Fortunately, on-line deal building has been a bonus to businesses as 90% of dealers surveyed claimed digital retailing has positively impacted at least one area of their business. As you unlock new digital paths, each new solution should pull shoppers deeper into the purchase funnel to drive faster, smoother and even more profitable deals. 

#5: Leverage the right experts and partners to accelerate profits  

Leveraging the right partners is essential to amplify your digital presence. Be sure to align your partnerships with experts that can show with data (and results!) active in-market car shoppers are on, active and engaged on their sites. Saying it is one thing, but showing results in the form of consistently accelerated profits is another thing – the thing you should be most focused on. 

Third party sites have proven they weather the changing conditions in the marketplace. In the most recent Car Buyer Journey study, it was discovered in the data that buyers are 57% more likely to visit third party sites exclusively without having to visit the OEM sites, especially among Used buyers.  

So stay in front of consumers on third party sites because that’s where they are, and they’re entertaining different brands, different makes and models, and different types of vehicles than they might have originally intended. 

36% Higher Gross Profit Per Lead than the closest competitor 2 

It goes without saying, having the right experts and partners in your corner can make a huge difference in driving business. Enhanced dealership marketing solutions from Autotrader crush the competition resulting in higher profits than the closest competitors. It’s possible to reach farther, close faster and profit more when you lean into automation, digital retailing and solutions designed to deliver quality leads. 

For the Road Forward 

When you deliver, meet and exceed today’s consumers’ expectations by creating a more personalized shopping and buying experience, you end up with more sales-ready leads for your sales team. It’s a win-win!  

At Autotrader, we’re constantly innovating our consumer experience to attract and retain more qualified, ready-to-buy shoppers and deliver higher-quality leads that close.  

Discover how Autotrader can help you connect with today’s digital consumers and capture more leads, delivering the automotive experience that drives ready-to-buy shoppers further down the purchase path in this guide: The Difference Better Leads and Higher Profits Can Make for Your Dealership: Experience that moment when you close more leads with 36% more profit. 

Sources: 

1 2023 Car and Buyer Journey Study 

2 Comscore data, Autotrader and KBB.com traffic combined, Jan to Aug 2023 

Top Takeaways from the 2023 Car Buyer Journey Study: A Story of Normalization and Resiliency

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With the past several years keeping dealers, OEM’s and the industry on its toes…. It’s no wonder many of us were holding our breaths as the results from Cox Automotive’s 14th annual Car Buyer Journey (CBJ) study came in. However, the results and insights from the highly anticipated study nearly 3,000 respondents who purchased or leased their vehicles in the previous year made two things are clear:

First, Dealers and the automotive industry on a whole have emerged as massively resilient in 2023. Second, things appear to be normalizing. (Knock on wood.)

While ‘normal’ may be a relatively subjective term in the automotive industry, especially over the past four years with the highest inflation we’ve seen in 40 years, record profits, heavily fluctuating inventory, and the rapid shift to digitization… We might finally be at the point we can officially categorize those times as historic and move forward. The CBJ findings signified that bridge into something more level.

The data from the Car Buying Journey offers critical insights that help dealers, OEMs and or industry on a whole determine key changes in consumer buying behavior. Together, let’s look at how the changed consumer behaviors discovered are shaping the car-buying experience, vehicle ownership and digitization both now, as well as for the road forward.

Invest in the Customer Experience for the Long Haul

It’s a keeper! That’s the overall sentiment from the 2023 Car Buyer Journey Study of vehicle owners who planned to hold onto their vehicles. This was one of the more surprising results uncovered from the Car Buyer Journey (CBJ) study as it showed that ride shares and subscription models don’t quite hold the allure they did five years ago. Car ownership is not only here to stay but is increasing.

And while that means your buyers may be slow to return to your sales floor to consider a trade-in or newer model, that doesn’t mean they won’t need to hear from you. Those shifting mindsets around vehicle ownership indicate that more personal usage, more service needs and more consumers adding to their household fleet. It’s presenting you a unique opportunity to build on your relationships with your existing customer base and attract the attention of previous and potential customers.

With the results showing that the number of buyers motivated to own more than one car is increasing, why would you let them buy from a dealer down the street when they already have a relationship with you? It’s time to hit the phones (or emails or texts!) and reach out to current and former customers to get them in for regular service and maintenance.

Going forward: Use the data within your CRM and first-party data and activate it! Reach out in their preferred method, follow up on past customers and make sure current customers know how much you appreciate their previous business. Keeping their best interests as your priority while keeping their vehicles in good working condition is part of the relationship building process. You already have their information on file, so give a personalized experience and show you know who they are, want they want, and should remain their dealer and service department of choice.

91% of respondents plan on keeping their own car for their primary mode of transportation for the next five years

Satisfaction with Shopping Journey Surged

In case no one has told you lately, you’re doing a great job. That’s according to the results from the Car Buyer Journey which indicated that overall satisfaction from the shopping journey surged in 2023 from 61% to 69% overall. With inventory levels returning to pre-pandemic levels, your buyers are returning to peruse your vehicle selection. They also enjoy more options, greater deals and incentives rolling back in, as well as more responsive communications from your sales team.

Going forward: Don’t lose this momentum! Build off the enhanced experience most dealers focused on. Keep in mind that your competition down the block is working just as hard, or harder, to get the attention of shoppers as well. If you let a lead go uncontacted for too long, they’ll find a better deal or better experience, and fast. Don’t forget – Autotrader’s technology is backed by Cox Automotive’s first-party data to deliver AI-driven insights and predictions that help you create more powerful, engaging, and personalized shopping experiences. They don’t just drive leads… they drive real results.

A Personalized, Optimized and Online Experience is King

In the past five years, shoppers took their automotive search online, and, thanks to rapid innovations, resoundingly gave feedback they enjoyed their experience. Time spent searching online went down as digitization made the process smoother and more efficient.

40 minutes was the total time saved at the dealership of purchase for mostly digital buyers vs. light buyers

Going Forward: Build on the trust and transparency established as more buyers use third-party sites than OEM sites to look for their next vehicle. Activate insights and leverage the data from third parties like Autotrader and Kelley Blue BookTM to send personalized messages to buyers. The right message, at the right time, in the right way will help you get them in the funnel faster and help you close the deal.

57% of auto-shoppers visited a third-party site without using an OEM site

Don’t Let Good Enough Be Good Enough

According to the Car Buyer Journey study, the dealership experience was reported as even better in 2023. That’s great. What’s even better than “even better”? There’s still opportunities for improvement to take those higher consumer satisfaction ratings up a notch or two. That’s because shoppers who submitted an enhanced lead before going into the dealership were even happier than the rest.

Enhanced leads make the car-buying process smoother and easier for both sides. Your buyers is happier because they get a more customized, personalized experience that is faster and more transparent, and you get a customer that has shown out the gate they are more serious. It’s a win-win for both sides and makes everyone happier throughout the deal process.

Going Forward: Be the dealership who takes customer satisfaction to the next level by encouraging enhanced lead form submissions. Take your enhanced leads and focus on creating the ultimate personalized experience for them. They gave you more information… now the ball is in your court to tailor the purchase process to what they’ve already shared with you they want, need, prefer and prioritize.

77% of shoppers who submitted an enhanced lead online reported being more satisfied with the dealership purchase experience

The Omnichannel Movement Continues its Momentum

We all know that when dealerships fully embraced digitization and consumer buying habits shifted the way the world interacted with shoppers, the industry did something unique: it

blended the online and in-person experience into the ‘omnichannel experience’. And it doesn’t look like we’re ever turning back.

Car buyers are now moving towards a mix of in-person and online steps. The key is to have different ways to buy based on the shoppers preference, then ensure that the deal carries forward no matter online or in-person. Seamlessness is the name of the game, and the modern dealers that make this the nucleus of their strategy are seeing some pretty big payoffs in both consumer satisfaction and driving profits.

Going forward: There’s still room for improvement, particularly in the financing steps of the car-buying process. Could you make digital forms easier to find for potential customers? Have you educated everyone on assisting consumers through the new omnichannel experience?

We all know that when dealerships fully embraced digitization and consumer buying habits shifted the way the world interacted with shoppers, the industry did something unique: it

blended the online and in-person experience into the ‘omnichannel experience’. And it doesn’t look like we’re ever turning back.

Car buyers are now moving towards a mix of in-person and online steps. The key is to have different ways to buy based on the shoppers preference, then ensure that the deal carries forward no matter online or in-person. Seamlessness is the name of the game, and the modern dealers that make this the nucleus of their strategy are seeing some pretty big payoffs in both consumer satisfaction and driving profits.

Going forward: There’s still room for improvement, particularly in the financing steps of the car-buying process. Could you make digital forms easier to find for potential customers? Have you educated everyone on assisting consumers through the new omnichannel experience?

81% of shoppers surveyed said digital retailing improved the overall buying experience

For the Road Forward

Understanding consumer behavior, no matter what economic or industry hurdles you may be facing, puts you in a primed position. When you center your business and marketing strategy around today’s shoppers wants, needs, preferences and prirorities, you’ll be able to deliver a next-level customer experience to not only capture their attention, but also close the deal.

All that shaking and shifting of the past few years led to digitization and innovations that have shown to be positively affecting not only the auto consumers experience, but also their satisfaction. With normalization taking center stage in this year’s Car Buyer Journey study, we’re starting to see lasting effects of a shifted narrative which are helping dealers have the success they’re after.

Autotrader and Kelley Blue Book, backed by the power of Cox Automotive, continues to be the connected partner you need in today’s times to power your business forward. Together, we’re providing the solutions and products car buyers demand, to help you get the results you need.

Want to hear more about the Car Buyer Journey Study from one of the lead senior researchers Vanessa Ton with Cox Automotive? Then register for an exclusive behind-the-scenes opportunity hosted on Automotive News.

Sources:

(1) Comscore data, Autotrader and KBB.com traffic combined 


(2) 2023 Car and Buyer Journey Study

The 10 Actions Auto Industry Buzzwords are Driving Dealers to Take in 2024

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It’s easy to wonder how (and if) the latest auto industry buzzwords will affect your business, especially after the last few years that came along with an abundance of rapid changes, pivots and firsts for almost all of us.

However, don’t expect any of these words that generated buzz to fade anytime soon as we step into 2024. Several of those trending words demand a dealer’s attention to make shifts now in how they’ll create opportunities to win customers, influence brand awareness and gain market share in the coming year.

So to help you gain a deeper understanding of what the Top 10 Automotive Industry Buzzwords are, and what they truly mean to a dealer’s business success, we asked expert Jade Terreberry, Senior Director of Strategic Planning at Autotrader and Kelley Blue Book to map out ten that should be on your radar in 2024, as well as the steps she recommends to incorporate them into your plans and strategies to drive more business.

Buzzword #1: CDP (Customer Data Platform)

The hottest acronym from the automotive industry last year, think of a CDP as one view of your customer that tells you what they’re doing, how they’re doing it and should steer your actions, marketing, and timeline to provide a personalized experience. 

Actions to Take in 2024:

  • Turn your CDP data and information into actions – that’s where the goldmine is.
  • Connect the dots inside your dealership with your sales and ops teams – use your CDP to personalize the customer experience.
  • Once your CDP has sifted through consumer, vehicle and F & I data – get a deep understanding of the lifetime value of your consumers.

Buzzword #2: AI (Artificial Intelligence)

There are so many ways to use AI, but dealers should think about how it’s being used today across your vendor partners. AI leads to big data, which can help you create more relevant experiences and gain more connectivity to existing and ideal consumers.

Actions to Take in 2024:

  • AI can help you with the end goal – to get the right car, in front of the right buyer, at the right time… in the right WAY!
  • Use AI or your vendor’s AI data to serve personalized messaging – focus on the call to action you want them to take.
  • Retargeting continues to drive brand awareness and profits – AI can help you with this.

Buzzword #3: Virtual and Physical Lot

For years you’ve heard about your virtual and physical lot. And in today’s times with consumers shopping both online and in-store, and often times back online again… what’s happening on your virtual lot is a direct indicator of what’s happening on your physical lot.

Actions to Take in 2024:

  • Make it seamless for the consumer – enable your team members to connect the deal in real time both virtually as well as physically.
  • Merchandise cars that are headed your way – especially if it’s a vehicle that will sell quickly.
  • Follow the formula of trust, triangulation and then transfer – build the trust, collect the information, personalize and connect your experience both online and in-store to drive profits.

Buzzword #4: Extended Loan Terms

With heightened interest rates and affordability being hurdles for today’s auto-shoppers, automotive loan terms have now extended past traditional norms into the 84- and 96-month range. In 2023 the average new-car loan term was 69 mo. and used-car loan was 67 mo.

Actions to Take in 2024:

  • Understand the goal and keep a consumer’s best interests in mind – explain the pros and cons of extended loan terms so that expectations have been set and it’s clear what your customer is stepping into.
  • Forecast and shift expectations and actions by modeling out revenue streams with your sales, F&I and service teams – remember the perfect storm is being set between lenders, your inventory and your customers’ typical patterns on extended terms.
  • Adjust and personalize your communications and cadence – the 72-to-90-mo. loan term customer will have a distinct timeline, equity situation and needs that call for being pro-active in customizing and strategizing your touch points and conversations differently.

Buzzword #5: CPO (Certified Pre-Owned)

In looking at the big picture of the financial efficiency of your organization to keep consumers coming back, you should be focused on CPO vehicles. They provide many protections from a consumer sentiment perspective, as well as consumer brand loyalty, retention and fixed ops perspective.

Actions to Take in 2024:

  • Have a weekly meeting with your Used Car Manager on CPOs – discuss how many are currently, in the process of, and are capable of being certified in your current and incoming inventory.
  • Determine your true cost to certify a vehicle and lifetime value predictor of your CPO customer – include upfront costs, profitability margins of CPO vs. Non-CPO, short-term and long-term revenue derived from a lifetime value client perspective.
  • OEMs are leaning into CPOs – be sure to check if yours are offering incentives or co-op dollars to certify that you might not be taking full advantage of.

Buzzword #6: Hybrid Retailing

It’s essential to have a seamless experience both online and offline. Every piece of a consumer’s information, no matter how they entered your ecosystem, should bridge to give you a singular consumer profile. This keeps the deal moving and improves the consumer’s experience.

Actions to Take in 2024:

  • Ensure your teams are connecting the dots both online and offline – train them how to access information already collected and how to pick up where the consumer left off.
  • Plan for the fully automated future of ecommerce – it’s not a light switch, so make your 5 or 10 yr business plan on how you’ll move in that direction step by step.
  • Test your online to offline experience – be sure the entire team is clear on how to keep the deal moving no matter how or where the consumer chooses to complete the deal.

Buzzword #7: Distance Retailing

One of the areas where you can find the most immediate incrementality for your business from a variable ops perspective is distance retailing. Selling outside your market is now possible with consumers increasingly expanding their search radius to get the right car at the right price.

Actions to Take in 2024:

  • Consumers what a car with the packages, trim and pricing and are willing to travel for it – ensure you have a plan and the right people (ex. drivers) to capture those out of radius shoppers with delivery and a seamless online experience.
  • The total addressable market in your own backyard for you to gain or retain service and fixed ops business has expanded – consumers who bought outside of market are there for you to capture or recapture.
  • Test a few deals to target an extended radius if you’re not currently doing this – give a 30 day trial to measure how it changes or will change your business for incremental revenue growth.

Buzzword #8: Revenue Stream Shifts

What revenue has looked like for the last few years is going to be very different going forward. Strategize for growth and shift based on how and where your revenue is coming in from today in each of your departments, and forecast based on increased use of technology.

Actions to Take in 2024:

  • Get a clear picture of what your existing revenue streams are – this will change monthly and give you a clear indicator of where you’re winning and where you need to improve.
  • Plan for the foreseeable value and equity situation – with extended loan terms and increased car values we’ve seen, how this will affect your business (and your customers!) for the next 5 – 9 years and how will you overcome this challenge.
  • Break your new, used and CPO sales and revenue down monthly – understand the different age groups or types of cars that are truly driving your sales and revenue.

Buzzword #9: OEM Direct to Consumer

It’s clear that you’re the expert for the OEM. Sure, there will be specific lines, makes or models OEMs will build and release for an automated channel because it helps with allocation and efficiency. But there’s still a big role for the dealership and revenue streams that you’ve likely never had before to capture as ecommerce expands.

Actions to Take in 2024:

  • Get a bigger understanding of how your OEM is forward thinking – once you know this, strategize how your role plays within and alongside it to maximize potential.
  • Strive to be the partner of choice – develop frequent and consistent messaging to your team on what makes you, and will continue to make you the premiere partner alongside your OEM
  • OEM certifications make you a gold standard – expand your expert and master technicians, as well as your certified salespeople that are critical to your brand.

Buzzword #10: New Roles within Modern Dealerships

One of the most important things to plan for as your dealership moves forward is making sure you have team members who are focused on user experience, consumer experiences, hybrid and distance retailing and eCommerce. Understand and plan how those roles currently do and will fit into your dealership as technology and eCommerce experiences and demands grow.

Actions to Take in 2024:

  • Align and set pay plans clearly based on goals and priorities – bring and buy your entire staff into a clear direction you’re headed towards and changes you’ll make together.
  • Connect streams of business, roles and accountability for eCommerce and in-store sales – makes sure there is a clear understanding that it’s not a me vs. them mentality when it comes to inventory and that the bottom line and customer satisfaction is a unified goal.
  • Train and recruit the right people for the right roles – these new roles call for specialization to fast-track successful outcomes.

For the road forward

Your recommendation is to take three of the buzzwords above each day and spend about 10 minutes planning and strategizing around them – you must plan your work and you must work your plan. And whether that’s meeting with your teams and holding them accountable for the steps and actions you’ve mapped out, or seeing where you’re stacking up against the measurements you’ve set, these buzzwords can help you both grow and revolutionize how you do business both now, and well into the future.

Autotrader provides you with qualified leads for people who want cars. We have the data that connects and activates your data, and we have the shoppers. Driving quality leads that have the highest gross profit on average industry wide, we’re here for The Deal Doers.

Cox Automotive has the most connected and comprehensive view of the automotive industry and offers unmatched data and insights into consumer behavior, automotive trends and operational best practices. Whatever your goals, we can help you get there faster to stay a step ahead and successful in today’s marketplace.

Would you like access to all of the buzzwords above and actions to take mapped out in an easy-to-read and share format? Find it on the new infographic.

eBook: How to Increase Your Digital Presence to Drive Sales

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It’s here… The new eBook from Autotrader, Dealer.com and Esntial Commerce. 

In today’s times, it’s no longer enough to just collect data and use digital retailing tools. It’s time to make a step-by-step plan to activate and leverage them to empower your sales, retain customers and increase new business for the digital future. 

With a future of no third-party cookies on the near horizon, layered with a shifted consumer preference of completing more of the purchase process online… It’s no wonder why many auto dealers are struggling with how to stay a step ahead! 

But modernizing your marketing and business strategy doesn’t have to be as complicated as it may seem.  

Find out the new ways to connect with and activate your customer data in order to drive profits not just now, but for many years to come. The new speed of retail is here, and shoppers expect a streamlined, digital experience. Find out how inside our newest eBook. 

ACCESS NOW

By taking a deeper look at the importance of not just collecting data, but learning how to effectively interpret and activate your data, you’ll discover the step-by-step to increase your digital presence to get more deals done. 

Download your copy now. 

The 3 Ways Today’s Auto Dealers Should Reinvent their Digital Future

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After taking in the results to Cox Automotive’s annual 2022 Car Buyer Journey Study, it was clear that the impacts of digitalization were not only being felt by today’s consumers, but should ring a loud sounding bell for dealerships and OEMs alike to reexamine and reinvent how they do business online.  

Some of the results from the over 10,000 auto shoppers surveyed were a surprise, while others were something our industry had predicted to see continue to trend. But whether a surprise or a given, the undercurrent sentiment of today’s consumers’ wants, needs and preferences all pointed to 3 specifics things.  

Together, let’s take a different look at your business and marketing plans, and consider the 3 ways successful auto dealers are reshaping their current and future digital strategies to stay profitable and stand out to their ideal customer as the one to do business with. 

#1:  Online research – An opportunity to capture and recapture 

With inventory shortages being a headline last year in our industry, it probably isn’t a surprise that auto shoppers had to spend more time online researching when it came to purchasing their car.  

Thankfully, inventory challenges have started to ease, but we’re still seeing fluctuations within the industry. Some dealerships still have little to no inventory, while on the other hand others with a flip of a switch suddenly had a full lot at the end of last year. And still, many dealers are struggling to keep a consistent inventory of cars that have the packages and features their consumers actually want.  

One other important thing to note is that the number of vehicles available, especially new vehicles, is still much lower compared to this time just a few years ago. For that reason, cross-shopping activity has grown within the last year and brand defection is happening at heightened rates.    

This presents an opportunity to gain and stand out to new customers, especially if competitors aren’t putting the needed focus and investment into retaining their customers.   

  64% of buyers considered both new and used vehicles, 

which is up significantly from 55% in 2021  

Today’s auto shopping experience has become less about finding the perfect vehicle, and more about finding any vehicle that ticks some of the boxes and fits within a consumer’s budget with increased interest rates and reduced manufacturer incentives.    

It’s time to reset your CRM 

Seeing that consumers showed less loyalty to dealerships and brands in 2022, especially new vehicle buyers, moving forward this will be an important segment of car buyers dealers should focus on and win-back. Staying alongside and in-front of them will take on an even more important role at the dealership over the next few years. 

Traditional cadence vs. Needed cadence: Take the time within your CRM system to really look at what cadence and automations you currently have set up. Timelines have shifted due to inventory fluctuations, interest rates and doing more of the deal online – so the old ways of mapping things out in 7 day, 10 day, 30 day, 60 day, 90 day and so on may no longer be relevant.    

You’ll have to set different timelines and different funnels depending on the shopper’s or previous customer’s situation, and you should be fast-tracking and educating the ones that are actively communicating with you what the possibilities are.   

Lease Customers: In your CRM, don’t just rely on the OEMs automated lease notifications to your customers. It’s important to elevate your spotlight on these customers. They might need a different interval and set of communications based on if your brand isn’t really offering attractive lease incentives or if you know that you’ll probably still be facing some inventory challenges when that customer comes off lease. Remember, many lease customers were originally captured due to the attractive pricing, or having a new car every few years that is worry free.  

Activate your CRM by reaching out to them well ahead of the normal curve, say 9 months before, educating them on the situation now, what they’d most likely face, and remind them of the advantages your brand and dealership offers. That way if they’d like to stay in a lease – great! You can pre-order a car or ensure one will be available for them. Or… if they want to buy but need help planning for financing options – you can help facilitate and ensure you keep them as a lifetime value client.   

Remember – there is extreme financial value in lifetime value clients, and you don’t want to lose their loyalty or have them cross-shopping if you can be proactive with your CRM and stay alongside and in front of those clients.  

Content influences vehicle choice 

Let’s face it, customers are less likely to find their first-choice vehicle, so they do have to look for alternatives. With more cross-shopping, consumers are more reliant on content to help influence their vehicle selection.   

69% of new car buyers who changed their mind 

during shopping cited content as the most important factor 

for learning about other brands and vehicles   

For example, a Honda loyalist may be searching for a Honda Accord. If Honda currently has a lean inventory level, a Honda loyalist may have to cross-shop. Let’s say online content appears for a Hyundai Sonata during their research. They would have to gain more familiarity of the other brand, make and model, and determine if a Sonata is the right choice.   

This is why content is crucial to cross shopping. You should be frequently evaluating not just how you show up to your current customers or consumers that already know about your brand, but also the frequency and way you show up to your competitors’ customers. Make sure you know the wants, needs and preferences of today’s auto shoppers, and tailor your content accordingly. 

Videos: There have been significant shifts over the last 2 years. And it’s not surprising to see online videos move up in the rankings, now in the top 3. In particular, we found online test drive videos from an expert to be significantly more influential. Content like a test drive video allows consumers to engage in immersive digital experiences, especially as the purchase process moves more online.   

Testimonials: Consumer ratings and reviews remain at the top of the list as well. Gen Z and Millennial buyers like to see and hear what others think, and let that help shape their interest and opinion. Remember, in an “Amazon” world we’re used to leaning on what another consumer experiences after the purchase, and you should be frequently highlighting this is your digital content. 

 

#2 – Car shoppers prefer online purchasing – have options  

In today’s digital world, it also probably doesn’t come as a shock that there is continued growth in consumer preference for completing most, or all, of the auto purchase experience online with the dealer or retailer. 

 68% Say they will do most or all 

of their vehicle purchase process online in the future

80% Think it’s a good or great idea 

to buy entirely online  

Where they are vs. where they want to be: Today, shoppers continue to show enthusiasm towards doing more parts of their shopping journey online, and they are still indicating that they want to do even more online in the future.   

68% of shoppers say they would do most, or all of their purchase process online in the future, which is higher than ever before. But even more important to note is that 4-in-5 consumers think it’s a good or great idea to buy entirely online. It’s time for you, as well as our industry, to prepare to meet consumers where they are today and where they plan to be in the future, which is online.  

Look at what digital retailing capabilities you have today and map out which ones you will need to adopt over the next few years. And remember, just because you build a “Field of Dreams” does not mean the consumer will just naturally come. You have to make sure that your marketing strategy includes educating and demonstrating to the consumer you have the capabilities they want and are willing to show them how to use them. 

Highlight the benefits of online car shopping: The good news is that transacting digitally is a win-win for both consumers and dealers. The benefits recognized by consumers are largely time spent on a whole purchasing a car and pricing.   

But it’s important to remember that although consumers recognize time saved at the dealership and overall efficiency as the top benefits of digital retailing, it’s still a newer process for them. Buying a $25 item online is quite different than buying a $40,000 car in their mind.  

So be sure to highlight that the differences aren’t as big as they think and that purchasing a vehicle online has the same benefits they’re looking for in their other digital interactions: seamlessness, less friction, saving time and better price transparency.  

A better car- buying experience and higher customer satisfaction: Digital retailing can and should lead to a better buying experience overall for the consumer, and you should be making sure your customer knows this with your marketing strategy as well as in-store experience.   

A recent Cox Automotive study compared “Mostly Digital” buyers (those who did at least 50% of their purchase process online) to “Light Digital” buyers (those who did 20% or less of their purchase process online). The results found that “Mostly Digital” buyers are more likely to be satisfied with price, time spent, and overall experience.  

Most importantly, it uncovered that “Mostly Digital” buyers tend to be more loyal to the dealership and brand. So make sure that your strategy includes options and optimizations for these customers as the segment will only continue to grow. 

Bridging the online experience into an in-person dealership experience should not only include a strategy, but at this point be a consistent pillar of focus on how you do business. Make sure the experience online seamlessly blends into that same amazing experience they get in-person, and that they everyone is able to pick-up the deal wherever it was left online.  

#3 – Connect and reimagine your dealership’s digital retailing capabilities 

Consumers recognize the benefits of digital retailing… and it’s safe to say that dealers do too.   

In the annual Car Buyer Journey study, we asked dealers what they’ve been doing with their digital retailing solutions since 2020, Many of them remain happy with their investments, with 87% saying that digital retailing has had a positive impact in at least one area of their business – time, ease and efficiency being the top areas, but also sales, profit and their relationships with their customers.   

H3: A closer look and self-audit: All dealers evaluate how they would rank the top reported positive impacts listed on the graphic above, especially noting the consumer and dealer advantages of: time spent on deal, ease of completing the deal, staff efficiency, and customer relationships. 

If you were to have your new sales staff, or some of the other newer staff, run a 360-degree audit for you going through all the steps of the online purchase your dealership offers using what digital retailing tools you have, how would they report back to you on time spent, ease, efficiency, and the relationship / experience on a whole?   

How to audit your dealership’s online car-buying process: 

– Have your sales staff initiate a purchase process and time how long it takes from beginning to end. 

– Ask them to note what was hard to do, and what was easy to do online. 

– Make sure to ask them to be aware if they were retargeted at all when visiting other sites, if you have those capabilities enabled.   

 – Have them test the ease or uncover any bottlenecks you might not be aware exist during the end-to-end purchase process: research, discovery, scheduling a test drive, financing, etc. 

– Ask them to do part of it online and see if one of your existing sales staff knew exactly where to pick up in-store – rate congruency and if the experiences matched. 

 – Remember, the advantage of having newer employees complete this audit is they still have a bit of a zoomed-out lens and will spot things that the older staff are just “used to” as a way of doing business. Lean on them to give suggestions and offer examples that work on other sites. 

 By consistently doing this 360-degree online audit monthly, or quarterly, and looking at your competitors in these same categories, you’ll have a proactive strategy to capture more of your ideal customers’ attention online. You’ll also be able to funnel them faster through the deal increasing satisfaction and improving your odds of gaining or retaining the sale. 

Additionally, you’ll be able to form a blueprint of the capabilities of your current online digital retailing tools and strategize the tools you’ll need to add in order to provide the full eCommerce experience in the future. According to our research, when it comes to deal-making capabilities, consumers have high expectations of what they can accomplish on dealer websites in terms of digital retailing milestones. So make sure yours are mapped out and easy to find.    

Know what your customer wants, needs and prefers digitally: In today’s times, you need to know your customer, know your business, know the experience you offer your customer, and make sure that your digital retailing tools are working for you!  

This should be aligned with your business and regional goals. For example, a dealership in rural Iowa will have different consumers than that of Laguna Beach, California.  Take a deeper look at what your customers and consumers want when it comes to an omnichannel and an ecommerce experience. Then make sure you build and work around what their preferences are today, as well as plan to build it for the future when it comes to your digital retailing and online capabilities. 

New car pre-order: Dealers and OEMs should also be focused on a consumer’s interest in, and increasing appetite for, new car pre-order. By reevaluating how your brand and dealership not only handle it but promote and educate around it online during the entire car buyer journey, you can reinvent your marketing strategy to include this growing capability and demand. 

With today’s continued fluctuating inventory, coupled with the rise in consumers saying they want to and are willing to complete new car pre-order now, and in the future, it should be a larger focus of your online and digital retailing strategy for years to come. But remember, this is still “new” to many consumers, and you must educate and assure them of the benefits, as well as show them how it’s successfully done online. 

For the road forward 

By understanding what today’s car shoppers’ wants, needs and prefers are, you’ll be able to strategize and capitalize on the digital opportunity for growth. It’s time for dealerships to re-examine their marketing and business strategy to connect and extend their capabilities to attract in-market auto shoppers as well as retain their existing customers. 

By implementing the 3 ways listed above into your strategy, you will not only have reimagined a more profitable way to run and operate your business, but you will be aligned with where consumers are headed currently and in the future. 

Autotrader provides you with qualified leads for people that want cars. We have the data, and we have the shoppers. We know what they want, and our goal is to match them with our dealer partners, driving quality leads and delivering a 35% higher gross profit on average. We connect you with customers virtually, to move shoppers to you, so that you can focus on building and letting your brand shine. 

Cox Automotive has the most connected and comprehensive view of the automotive industry and offers unmatched data and insights into consumer behavior, automotive trends, and operational best practices. Whatever your goals, we can help you get there faster and to stay a step ahead and successful in today’s marketplace.  

Vehicle Recalls: Why Consumers Don’t Take Action and What Dealerships Can Do about It 

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We all know how important vehicle recalls are for consumers. Correcting faults ranging from software problems that can cause a car to stall unexpectedly, to leaks that can cause a fire, to general safety concerns, you would think vehicle owners would be lined up the minute a recall was issued. 

However, despite the huge number of recalled vehicles on our roads in the US, only a relatively small percentage of consumers actually bring their vehicles in to get the recall work completed and car repaired.  

Some recalls include millions of vehicles, while others include only a dozen or so, but every recall should be considered equally as important to both vehicle owners and your dealership’s service center.   

Why should it be equally as important? Because every recall also offers opportunities for your dealership and service center. Opportunities like optimizing revenue possibilities, improved customer satisfaction, attracting new customers, and loyalty retention for life-time value clients.   

The reasons why most consumers don’t jump on vehicle recall work 

Due to the vast array of recalls, and the large spectrum of minor (recommended to have repaired) to major (do not drive), consumers are left with many questions.  And these questions and concerns can, and do, stand in the way of them taking quick action. 

Questions such as: 

  • Can I still drive the car? 
  • Is the recall issue really dangerous, or is this a small thing I can have fixed in the future? 
  • Will it cost me money to fix it? 
  • How long will it take to fix it, and will I have to wait for hours or days? 
  • Will I get a loaner car? 
  • What happens if they break something while completing the work? 
  • Will there be another recall after I get it fixed? 
  • Will they try to sell me on other repair work while I’m there? 

And so on… Recall work has proven to be a confusing process to most consumers.  

But as a trusted service center that’s focused on educating existing and prospective clients, you can make it very clear in your messaging that your dealership is here to help vehicle owners. Here are a few suggestions to not only capture recall work and help consumers understand what is involved, but ways to give them the nudge to have it fixed sooner than later: 

  • Be specific on how long the repair will take.  
  • Highlight the experience that they should expect to have by choosing your dealership and/or service center, such as a free vacuum and wash. 
  • Ensure the consumer that your service department is set up to swiftly handle this recall work, as well as their unique needs, when they do come in. 

Opportunities for your service center 

Although it is ultimately a consumer’s responsibility to bring the car into a service center for the recall work, you can do your part by making sure you have a strategy in place for your fixed operations and service department to drive the recall and warranty work straight into your service lane. 

There are many opportunities that recalls present your dealership, fixed operations department and / or service center. So, with a strategic focus on steering both the consumer and the work to your dealership and/or service center, here are some of the benefits you might be able to capture: 

Warranty Work 

Recall work connects to warranty work, and both can help dealerships and service departments when it comes to building a pipeline, increased revenue opportunities, and retention.   

  • Building a pipeline – recall and warranty work drive in new, existing and previous clients. Not only does it pose an opportunity to build a pipeline in your fixed ops department, but it also extends into your sales departments. Additionally, it gives you a reason to reach back out to a previous sales or service client to bring them back to and show them why they should be using your dealership again to recapture their business. 
  • Increased revenue opportunities – stats show that 65% of warranty work is accompanied by customer pay work. Once a recall or warranty work consumer uses you, show them every reason why you want and deserve their business, and that you understand and offer the experience they want. Most customers in need of service are also likely to return to the same dealership to purchase their next vehicle: in fact, recent data shows a whopping 74% do so. 
  • Help with retention – In just five years, more than 70% of your customers will switch to an independent service mechanic when their vehicle needs work. Now sprinkle in recent inventory fluctuations and brand defection, which currently is at an all-time high. Both recall and warranty work can help keep that lifetime value customer at your dealership, by keeping you top of mind as their go-to and as a business that is looking out for their best interests, not just in the short term but for the long run. 

Increased Customer Loyalty  

Today’s successful dealers know they need to diversify how they engage and attract consumers that they’ve sold to and serviced over the years. And although each silo might warrant and have a different strategy on how to connect with them tied to the goal of continued loyalty, recall and warranty work poses an excellent opportunity to reach out or re-connect. 

Ways to engage with current and previous customers during recall or warranty work include: 

  • Provide great service – show them why they chose you over the others and how you are committed to providing an extraordinary experience each and every time they use you. 
  • Supply pro-active maintenance updates – informing customers ahead of time helps them feel more informed and gives them the ability to plan ahead, which includes keeping your service center top of mind. 
  • Give rewards for repeat or timely visits – by doing this you incentivize them for their loyalty. Those small discounts go a long way when it comes to them staying with you. 

Shifted Perspective  

Most consumers have the belief that a dealership’s service center charges more for service work. Not just more… much more. Kelley Blue Book has tools and widgets that are working hard to increase transparency and dispel this old way of thinking.  

Recall and warranty work poses the perfect opportunity for you to show the new, existing, or previously defected customer that you do excellent work and are transparent in not only how you complete repairs, but also in your pricing. While they are there, ask them what they typically pay for an oil change or other work their vehicle might need in the near future. Then show them how much you charge, and they’ll most likely be surprised to see that the price difference in what they are paying now is not as big as they thought it would be. 

Turn your service center into a profit center 

Did you know that KBB.com has a “recalls” button on its consumer site? This allows the consumer to not only check to see if there is an existing recall issued on their vehicle’s make and model, but sign up for future notifications if a recall does happen on their vehicle.  

From acquiring inventory to generating new service and sales opportunities, let the #1 most trusted third-party automotive brand help you grow your business. At Kelley Blue Book we drive trust, so that you can drive more revenue. 

Kelley Blue Book’s service and vehicle advertising solutions help dealers reach and influence new service and vehicle customers, including recalls. Now, you can drive more revenue into service lanes by reaching recall and service-ready consumers, as well as reach in-market car shoppers at every stage of the buying and ownership experience. 

How to Navigate the Trends and Hurdles Shaping Today’s Car Buyers’ Satisfaction Levels 

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The Cox Automotive annual 2022 Car Buyer Journey Study is out, and the impacts of digitalization, economic challenges and industry pressures are clearly being felt. Results from the over 10,000 auto shoppers surveyed might just surprise you, as much as they did our research team!  

It’s not all bad news… However, the declining satisfaction and trending statistics should be nudging our industry to take another look at their business and marketing plans in the coming year in order to gain, and keep, an auto shopper’s business.  

So, let’s unpack a few of the top takeaways on what economic and industry trends affected consumer satisfaction and outline a few ways you can successfully overcome these hurdles shaping auto consumers’ wants, needs and preferences for the road forward. 

The results from the annual Car Buyer Journey Study 

The study was created from surveying more than 10,000 consumers who were in the market for a vehicle in 2022 – Ooh. As part of the process, dealers were also surveyed, and most of the research was conducted during the second half of 2022. 

Since 2009, Cox Automotive’s annual Car Buyer Journey Study has offered a comprehensive look at the overall vehicle buying process in the United States, with an eye toward consumer satisfaction. The goal of the study is to provide a view of the complete journey through researching, shopping and the many purchase steps required to complete the deal – for both new- and used-vehicle buyers.  

With this wholistic view, it was clear that buyer satisfaction was down due to economic and industry challenges. 

Needless to say, the last couple years have been especially tough for the automotive industry.  Near the end of Q1 of 2021 our industry, and most consumers, realized that the chip shortage was becoming a real problem. The resulting challenges of low inventory and higher vehicle prices that would follow in 2022 greatly disrupted gains made in consumer satisfaction with the overall car buying experience.   

Consumer experience ratings have dipped again, and are back down to pre-pandemic levels. Today, 61% of buyers told us they are highly satisfied, as satisfaction fell significantly for the second consecutive year in a row.   

In addition, only 31% of buyers told us their recent car buying experience was better than their previous buying experience.  That’s down from 43% in 2020.  At the same time, a growing percentage of buyers say the experience is or was worse.  Many attribute this declining sentiment to the pain of finding available inventory and climbing vehicle prices.   

 

New Car – Percentage that are highly satisfied with overall shopping experience:  

2022: 70% (down) 

2021:  71% 

2020:  74%  

Used Car – Percentage that are highly satisfied with overall shopping experience:  

2022: 58% (down) 

2021:  65%  

2020: 71%  

Pricing affected car buyers’ journey and satisfaction

Pricing has played a large part in the declining satisfaction results from consumers and shoppers alike, but let’s dig a bit further on how price affected all the various aspects of the consumer’s car buying process and journey.  

The study found that the average list price went up for both new and used vehicles by roughly $8,000 in just the past two years alone.   

Consumers responded to these increases by telling us that they did in fact notice higher prices than expected and they paid more than they budgeted. This in turn caused them to be more dissatisfied with their deal, which ultimately had an impact on the relationship between the buyer and their dealer/retailer. The survey revealed it reduced the trust they had in the deal overall, as well as their retailer.  

Macroeconomic factors also affected the car buying decision 

Next let’s look at the macroeconomic factors that also played a part in the shifted buying behaviors and decisions as well as the car buyer’s satisfaction levels…  

Inflation: This was not just a blip on the radar last year, inflation was a major economic factor that affected more than the auto industry – it affected every US citizen. So much so that it was recorded as the highest it had been in 40 years. Consumers, being keenly aware of inflation, said it shaped their buying decisions, knowing inflation was directly tied to both the purchase price and their car’s value.  

Interest Rates: With skyrocketing interest rates came large hurdles for auto shoppers and dealers when it came to affordability. Gone were the days of 0% or low interest financing and large financial incentives, and customers saw prime rates climb to over 10% for used vehicles in certain situations at the end of 2022. Many sub-prime buyers saw rates double that, and were priced out of the market due to affordability and not being able to qualify for the car payment in their debt-to-income ratio set by lenders. Interest rates climbed to the highest they had been over the past 20 years. 

Gas Prices: At an all-time high in many parts of the country in 2022, gas prices mostly had an effect on the make and type of car auto shoppers had in consideration and ultimately purchased. EV’s and hybrids continued to gain popularity, and OEMs moved forward with commitments to release more fuel-efficient and electric vehicle models in the coming year. 

The purchase process became less efficient for auto shoppers  

By far, the most noteworthy change in the car buying journey this year is how much time buyers are spending during the purchase process. And they were not happy about it. 

In 2021, the average time spent by a buyer from beginning to end in the purchase process was at an all-time low. Today, time spent is nearly at an all-time high again – with buyers spending just under 15 hours researching and shopping for their next vehicle purchase.   

Why is that so significant? That’s 2 hours more than last year.   

 

As you can see in the graphic above, buyers are also spending more time at the dealership, which has resulted in a declining satisfaction with the dealership experience. However, the most significant shift is the increased time buyers are having to spend researching online due to limited inventory. 

The good news shoppers, buyers and dealers agree on: digital solutions made the car buying journey better  

Nearly all auto dealers – 87% – indicate that digital retailing solutions have positively impacted at least one area of their business, reducing time spent, improving efficiency, and resulting in a benefit to sales, profits, and relationships with customers. 

Most importantly, 81% of shoppers in 2022 noted that 

online activities improved the overall buying experience.   

Transacting online saves time, according to buyers, and 78% of buyers believe an eCommerce approach provides greater transparency around pricing, and 86% say it allows them to interact with fewer dealership sales personnel, which they viewed as removing a typical pain-point. 

‘Mostly Digital’ buyers – those who complete more than 

50% of the purchase process steps online –  

were the most satisfied among all buyers.  

The results indicated that 67% of Mostly Digital buyers were satisfied with the buying experience compared to 49% of Light Digital buyers, who perform less than 20% of the steps online. Mostly Digital buyers are also more likely than Light Digital buyers to feel the dealership gave them a good deal. They were also more satisfied with the amount of time spent during the buying process and at the dealership.  

In the year ahead, Cox Automotive forecasts that half of all vehicle buyers will engage with at least one digital tool during the purchase process, and 80% of shoppers said they’d be willing to fully transact online within the next 5 years. 

For the road forward 

Despite a declining overall satisfaction with the car buying journey in 2022, by understanding what today’s car shopper wants, needs and prefers, you’ll be able to remove some of the hurdles that macroeconomic and industry challenges have presented. Buyers still are showing demand, supply is increasing, and there is opportunity for growth in the coming year for the dealers to make the process less frustrating for in-market auto shoppers. 

By taking a closer look at the experience you offer car buyers on-line and how that bridges into in-person, improving efficiencies and transparency, and showcasing how your brand’s experience stands out as the one a consumer should choose, you’ll not only gain a car shoppers attention, but you’ll also gain (or retain!) their business. 

Autotrader provides you with qualified leads for people that want cars. We have the data, and we have the shoppers. We know what they want, and our goal is to match them with our dealer partners, driving quality leads and delivering a 35% higher gross profit on average. We connect you with customers virtually, to move shoppers to you, so that you can focus on building and letting your brand shine. 

Cox Automotive has the most connected and comprehensive view of the automotive industry and offers unmatched data and insights into consumer behavior, automotive trends, and operational best practices. Whatever your goals, we can help you get there faster and to stay a step ahead and successful in today’s marketplace.  

Want to be the first to hear all the insights from the Car Buyer Journey Study at a unique webinar opportunity hosted on Automotive News on 2/22? We’ll also be sharing examples of what actions you should take now, and outline strategies successful dealers and OEMs are implementing in order to overcome those challenges the study revealed. Register for the live webinar: Insights from Over 10,000 Auto Shoppers: The 4 Ways Dealers Should Shift Their Marketing Strategy in 2023 

The 4 Ways Car Dealers Can Leverage their Brand, Traffic and Reputation to Drive Sales 

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Everyone in the auto industry knows that the past year presented several hurdles for auto dealers to jump over, one after another. Inventory was low, buyer behaviors and our industry were still rapidly shifting, and the world was dealing with some pretty big macro-economic challenges. 

In order to continue to drive profits and growth, even with all of the recent twists and turns, today’s successful dealers have learned that it’s time to leverage the brand you’ve already worked hard to build, the traffic you already have, and the reputation you’ve created in your community, state and possibly nationwide.  

How can you take a fresh approach to maximize what you’ve worked hard for not just over the last few years, but for as long as your business has been in business? By getting back to the foundational elements we’ve outlined in the 4 ways below to help you expand your business and drive more sales in the coming year. 

Build off your existing brand strength 

Many dealers think that in order to stand out to their ideal customer, especially in a heavily online digital world, they need to make or create a new brand – specifically when it comes to eCommerce.  

But they don’t… And you don’t have to!

The more that you can leverage the strength 

 of what you’ve been doing for years – 

the more you have a chance for success in connecting 

with your ideal customer and driving sales. 

Did you know, on average it takes 2 – 5 years to establish a business and branding according to Forbes, and the cost can be anywhere from $40,000 to $500,000 depending on your brand and the upfront costs you will have? And that’s just typically the sticker price in the first year.  

So instead of spending that money to build a “new” brand, why not build the brand you already have? 

Examples of this would be Disney + or Discovery +. Both kept the brand, kept the name, kept the recognition, kept the strength and offered an ecommerce product. There is strength in your brand – you’ve spent a lot of time and money on your brand – the key is to modernize it. 

Build off the traffic you drive from the whole experience 

Next let’s look at the traffic you already generate…  

Website Traffic: You already have a website, there is no need to scrap it and build an entirely new one. The key to modernizing it is to make it more robust!  

Things like UI and UX design for ease of use and user functionality, SEO optimization, CRM / database integrations and solutions, chat bots or AI assistant automations, and easy to search and find inventory with updated, comprehensive and transparent vehicle listings… And the list goes on!  

Start the year off right by taking a 360 degree look at how you can modernize and maximize your existing website and traffic. 

Local Traffic: You have spent ad dollars over the years to generate traffic to your business and to be recognized within your community. Whether you’ve been in business for just a short while, or for decades, it’s important to capitalize on that traffic as well.  

Chances are, you are most likely well known in your community and region as the “local” dealership. You’ve invested in and sponsored everything from print and web ads, radio spots, little league teams, fundraisers, and so on over the years within your community. And with that recognition you have, it can drive even more traffic.   

Optimize and build a modern strategy around your community traffic and look at how you are positioning yourself both in your showroom and service center as well as online as your community go-to. 

By building off the website and local traffic you’ve built since your dealership first opened its doors and first used your website to drive business, you’ve already paved the way for giving the consumer the whole experience.  

The Whole Experience: What do we mean by whole experience? We mean that even before car shoppers step foot in your dealership, they know what your brand stands for and they know what kind of experience they can expect to have by doing business with you. This not only will lead to higher consumer satisfaction, but also increased traffic and sales. 

In order to drive traffic and bridge a seamless experience both online and in-person, be sure to ask yourself the following questions and make sure you have a plan aligned within your dealership for each car shopper you connect with: 

– Did you make the online / ecommerce experience easy for them?  

– Were you transparent in your current offerings for new and/or used as well as sale and service specials or incentives?  

– Did you stay in front of them with personalized content based on what they showed you online they wanted and preferred?  

– Did you make it easy for them to find you, connect with you, and know what steps to take next? 

– Did you make it clear why they should do, or continue to do, business with you? 

– Once they showed up, did you show that based on data from their online research or interactions captured, you knew what their preferences were?  

– Do you offer them something they can’t get somewhere else, and is that differentiator clear to them?  

– Did you save them time and truly understand and shape their buying experience around what they wanted and preferred? 

– Do you make the experience you offer a notch above any competitors, so that they wanted to not only buy or service a car, but to only do business with you both now and in the future?  

As you see, it’s important to take another look at the traffic you’re already driving and build off of those foundational elements it in order to drive sales. Look for new ways to give potential and existing customers an experience online, as well as in person. And by optimizing and modernizing what you have worked hard to already build, you ensure a more seamless whole experience we know today’s car buyer is looking for.  

Build off the reputation you’ve worked hard to establish and protect 

Most dealerships not only work hard to establish a reputation, but also spend countless hours protecting it. And when you have a mapped out digital retailing and eCommerce strategy in play, it can help you build off that reputation and both protect and preserve it as well.  

With digital retailing tools you have the ability to stay in front of and alongside your ideal customer and existing customers. You can show and remind them why they should do business with you, or why they should still do business with you. You can show what makes your auto dealership stand apart to give better service and put their best interests first. You can show them why you have the reputation you are known for. 

By getting your operations in line and building a strategy from the top down on what your brand reputation stands for, you’ll have the ability to let that shine through online in your eCommerce marketing digital retailing efforts. When you do this, you’ve just leveraged a winning formula for building off of your hard earned and preserved reputation. 

Especially if that unified messaging and experience extends to when they first walk on your lot. The pre-existing or perceived reputation, combined with their online and in-person experience, builds and adds to your reputation, as well as your profits when they are the same. 

Build a brand between sales, service and operations  

By focusing on getting your dealership in-line from the top down, you’ll enable your sales – service – and operations to work in sync towards a unified goal. 

That goal should include what your brand stands for and how each department works alongside and with each other to drive sales and repeat business. This may seem obvious, but it often gets overlooked. There’s a big difference between only addressing it when reacting to a situation that could affect your brand negatively vs. being pro-active to build. 

When you connect all of the departments on over-arching goals, you’ll also have the opportunity to optimize your existing digital retailing and eCommerce abilities, online paperwork, test drives, and delivery. Everything that goes into a sale, gaining or retaining a customer, or winning back a previously defecting customer. When these dots are connected for everyone at the dealership, it ultimately helps your brand stand out as the one to use. 

Remember the more you offer, the more you educate, the more unified you are in your dealership experience and brand, the more you can make deals happen earlier in the car purchasing funnel.  

Your dealership should also decide what you can do beyond the purchase in order to drive loyalty. Truthfully look at how you differentiate yourself from your competitors in terms of what you do and offer, items such as warranty and service and your unique offerings. Make sure everyone at your dealership knows what those differentiators are and include them in your eCommerce strategy core messaging to help your brand stand out. 

You should also take the time to honestly think about and assess how your staff from each department are trained and informed / updated on your current marketing strategy and goals. By doing this on a regular basis, your in-store experience has a greater possibility of matching your online experience, and customer satisfaction and sales will benefit. 

If that doesn’t match, the customer is not likely going to be happy. And your brand will suffer, as discord and disconnect will be felt. You don’t want to lose the chance you worked hard for.  

A good place to start with your teams is with education and training on current and trending customer shopping behaviors and expectations, as well as ensuring the experience you gave online is the same experience a consumer receives in person as well, if not better.  

When you make sure your sales – service – and operations are all leveraging your brand, traffic and reputation in your online digital retailing and eCommerce marketing strategy, and map out how that bridges into your dealership, you’ll not only drive more quality leads, but you’ll close more deals. 

For the road forward 

In this transformed automotive industry world, Cox Automotive truly has the complete tech stack you need based on where your dealership and brand are both at and headed without the overwhelm. Whatever your goals, we can help you get there faster and to stay a step ahead and successful in today’s marketplace.  

Autotrader provides you with qualified leads for people that want cars. We have the data, and we have the shoppers. We know what they want, and our goal is to match them with our dealer partners. Because in today’s times, a trusted partner like Cox Automotive can help your brand stand out to your ideal customers. 

Autotrader not only drives quality leads but delivers a 35% higher gross profit on average. We connect you with customers virtually, to move shoppers to you, so that you can focus on building and letting your brand shine. 

All of us at Cox Automotive are here to not only here to help you succeed, but we’re here to help you for the drive forward, especially when it comes to developing your winning marketing strategy in the coming year. We invite you to connect with us to take a deeper look into ways to capture, connect and activate your data to make it more efficient and effective to drive both leads and business, to help you build upon what you have already worked hard to build. 

How a Multipronged Approach in Your Service Center Can Drive Profits

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Whether times in the auto industry are complicated like the last few years, or humming along smoothly, successful dealers and service centers know that they must take a multipronged approach. What’s a multipronged approach? It’s a plan and strategy that ties both your marketing department and your fixed ops initiatives together in order to maximize lifetime customer value and drive profits.

With recent studies showing that your service center is most likely responsible for 50% of your dealership’s profits, it’s time to take a closer look at some examples of a multiprong approach in action that can help turn your service center into an even bigger profit center.

Connecting the dots for your service customer

When thinking of a multiprong approach, it’s important to look at your customers that are regularly coming into your dealership or center for service. The majority of these customers are considered high value lifetime clients, and drive profits well after their initial purchase or service appointment. Additionally, you will likely have many chances to interact with this customer, in many different ways, among several team members.

It’s important to make sure your dealership is connected from the top down on how to approach potential needs that might arise for your service customer, in order to match that to some of the key initiatives at your dealerships.

Example of an Expensive Repair:

When service customers have an expensive repair, what are they thinking, considering and asking their service advisor or tech for advice on? They’re typically thinking about should they, or should they not, hold onto the vehicle longer.  

They’re also probably communicating with not only the service department, but also the new or used sales department, on several items such as:

  • Are there new cars available and what do they cost?
  • If there are limited new cars available, can a new one be pre-ordered for them?
  • What does the new car pre-order process look like?
  • What is their car’s current value new and are their incentives?
  • What would their trade-in be valued at? 

Keeping the car and getting it serviced– or purchasing a new car -those are essentially the two different ways the customer conducts business at your dealership. Not only do dealerships have a big interest in keeping this customer for service, but also for their next trade-in and vehicle purchase! And it calls for a multiprong approach across every department and staff member in your dealership to make sure this happens.

Take a closer look at the importance of efficiencies

Because many of those conversations with lifetime value customers, especially service customers, both start and end in the service drive, another multiprong approach should be to focus on efficiencies. What type of efficiencies?  Ones that can and should positively impact employee satisfaction which then leads to increased customer satisfaction!

Having seen almost twice the usual traffic on Kelley Blue Book over the last year or so, it’s no secret that customers are looking at that vehicle sitting in their garage. And they’re wondering if it’s the right time to trade in.

They know there’s a demand for vehicles with chip and inventory shortages and they know their car is probably worth more because of these micro-economic circumstances. Tools like Instant Cash Offer have been very successful in engaging with your customers, giving you the ability to connect with transaction-ready customers, to improve efficiencies by having the ability to acquire the inventory you need, while also lowering acquisition costs.

That same customer on Kelley Blue Book is probably also wondering if it’s the right time to start looking for a new car.

Other tools like iRecon and xTime are all about making jobs that have to be done at the dealership to service and sell cars more seamless, efficient, and manageable. Keeping you stocked with the inventory you need, when you need it, driving efficiencies. When you lift your service, you have the ability to raise your revenues.

The bigger picture

Customers’ preferences and priorities have shifted over the last few years, and instead of viewing these as challenges, with the top tips we shared, as well as multiprong approach, there is a wide-open road for opportunity and further innovation.

When you incorporate new ways to maximize your efficiency, increase loyalty, and drive revenue through your service drive, then connect them to the other departments and priorities within your dealership, you’ll not only have a bigger picture of how to increase profits, but you’ll also gain lifetime value clients along the way. 

Times have changed, and so must some of the ways as an industry we conduct business. A multiprong approach in your fixed ops departments is where the strategy and focus should shift within your dealership and service center.

Want access to our on-demand webinar outlining the multiprong approach further as well as several other solutions on how to gain lifetime clients and increase your service revenue? View the full replay of “Service After the Sale – Lifetime Value of Customers”

The revenue importance of service after the sale

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Whether you’re a Dealer, GM, Principle / Owner, Service Department Leader, Technician, New or Used Car Sales Specialist, or Acquisition / Appraisal Manager; it’s a consistent conversation, and an ever shifting one lately, on the difference and value of how to maximize new consumer opportunities vs an existing one. Especially when it comes to your service center. 

More specifically, how to get more new clients, retain them, as well as how to retain the existing clients you have in order to gain and keep a lifetime value client. When you are able to decode this, it can pave the way to a more profitable future when it comes to revenue at your dealership. 

Times have changed, and so must some of the ways we conduct business and where the strategy and focus lies within your dealership.  

Changed Consumer Behaviors Calls for Changed Dealer Focus 

We all know there is a big focus at dealerships around the initial sale of a vehicle… But what about after the sale? Especially in today’s times with inventory shortages?  

With recent studies showing that over 50% of a dealership’s profits are coming from their service centers, focus should also be on service after the sale at dealerships. It’s just as big of an importance to revenue, if not bigger, especially with so many macro-trends and challenges dealerships face, as well as navigating changed consumer behaviors.  

Consumer behaviors have not only evolved over the last few years, but show a shifted level of expectations as well as set of preferences. Preferences that all point to convenience and ease. If dealers don’t change behaviors to match that of today’s consumer demands, not only is a current or future sale at risk, but there’s a risk for their service departments as well as profits. The lifetime value of a customer extends well beyond the initial sale and drives straight into the service lane, and that is also where dealers should be looking for revenue opportunities. 

Stability in the Service Drive 

Data we have from a recent 2021 Cox Automotive Study really speaks for itself when it comes to the important role that service after the sale plays.  

  • 71% of consumers have defected from dealership service by the 5th year of vehicle ownership.?

That’s a staggering number and it’s important to look at the “why” behind it. With the supply and demand imbalance and consumers pushing purchases out, consumers purchasing further from home creating less direct loyalty to their purchase location, and the extended wait times to get into the service lanes where they have been before, opportunity is wide open. The strong possibility exists to gain new clients, and now is the time to ensure you are doing everything you can to retain your existing ones. 

By increasing the overall dealer focus and strategy, marketing, and training within your service center, you’ll help keep and convert the consumers who move through your service drive into a lifetime client and not end up as part of that 71% statistic.  

Next, let’s look at another promising statistic when it comes to opportunities for revenue at your dealership.  

  • 74% of consumers are likely to purchase their next vehicle from the same dealer if they returned for service.?  

This is an equally staggering number. When it comes to revenue, this statistic demonstrates there is a large amount of opportunity in the service drive. It’s important to re-evaluate how your service leaders, techs, and staff are taking advantage of those opportunities when they present themselves. Do you have a protocol for when a repair is higher than expected and the customer asks if they are better off buying new? What experiences and advantages are you offering at your dealership if someone has their car serviced with you to stand out from the competition? How easy is it to book a service appointment with your dealership and do you connect with customers in their preferred method; ex. text, apps? Are you outsourcing some common services when your appointment availability is stretched thin or offering pick-up and delivery services? 

These are just a few of the important things to look at so that your dealership can begin to laser in on just how important service is to revenue. 

 

We mentioned this before, but now let’s take a deeper look at the most important statistic of them all we uncovered in a recent Cox Automotive study.  

  • Dealers depend on service for 50% or more of their overall profit.?  

It probably is no surprise to dealers that fixed ops profitability is over half of their gross profit. However, it generally only represents a small percentage of their spend, and is an even smaller area of focus when it comes to ROI and optimization of consumer acquisition cost and market share.  

It’s time to take the actions required to turn your service center into a profit center. A fixed ops focus in your service department at your dealership offers stability in revenue as the automotive industry experiences challenges on the sale side. Additionally, with a strategy of acquiring and retaining lifetime customers through your service drive, no matter what bumps happen within the industry, you will have planted seeds that will continue to grow. 

Now that we know service contributes quite a bit to the dealership’s overall revenue, we highly suggest you closely examine those different types of service revenue streams.  

Retention Drives Revenue 

There’s a big difference between acquiring a new customer vs. retaining an existing one, especially in and for your service center.  

Retaining your service customer can result in many positive things for your dealership. It can lead to not only increased service profit, but also to the best and most accessible inventory you can acquire.  

You know these customers and you know their cars. By maintaining that relationship, it keeps your dealership top of mind not only when making service appointments, but they will also always be your best advertisement when asked for a recommendation or discussing their most recent experience.   

A new customer is more expensive and harder to acquire than retaining an existing one and involves a great many more people in the process.   

The top two reasons consumers take their car to dealerships for service is because the dealer knows their car and they have had prior experiences at the dealership – highlighting the need to focus on existing customer relationships and ensuring you provide the best possible experience when you acquire a new customer. The goal is and should be to keep them coming back.   

The Road Ahead 

Even with today’s challenges in the industry on the sales side, your service center offers many possibilities to gain and retain lifetime clients. Now that we know the difference in acquiring a new customer vs. retaining an existing customer, as well as decoding the importance of service after the sale, you understand the impact it has, and could have, on your dealership’s revenue for a more secure road ahead. 

Want access to our on-demand webinar outlining these findings as well as several other solutions on how to gain lifetime clients and increase your service revenue? Get the replay of “Service After the sale – Lifetime Value of Customers.”