Star performed a study that included input from dealerships, eCommerce platforms, and OEMs in an effort to identify areas where the industry still needs to make improvements. They boiled it down to six categories that will enhance the customer journey and accelerate advancements in the buying process.
Consumers are dissatisfied with in-dealership experience
When asked, many car shoppers would rather go to the dentist than negotiate for a vehicle purchase. There remains a negative connotation associated with salespeople – not just in automotive – where they’re seen as untrustworthy. As well, Star notes that the “turnover rate is generally high at dealerships, which makes it hard for consumers to form relationships”.
Dealers already know that keeping good staff can be extremely difficult, but doing so reinforces trust and establishes loyalty. Finding ways to retain salespeople should be a top priority.
Customers want the OPTION to buy fully online
Most car shoppers expect the ability to complete their car purchase fully online, even though almost every shopper will have reasons to contact the dealership anyway. However, the e-commerce option to point and click to buy is one that shoppers state they want.
Dealers and OEMs who don’t see conversions from e-commerce solutions might be looking at the wrong metric. It isn’t always who completes the process on that platform, but in satisfying customers’ expectations that the option is available, thus keeping them engaged with the dealership website.
Transitions between online and offline interactions
OEMs and digital retailing providers have made great strides in offering ways for dealers to offer seamless omnichannel transitions. However, the customer journey is ever-evolving and has been disrupted by obvious issues like the pandemic. Staying abreast of the customer journey between online and offline interactions and using that data to modify the path to purchase will do nothing but improve customer satisfaction.
A contentious topic among dealerships in North America and worldwide is direct-to-consumer sales. Vehicle margins have been tightened OEMs, especially as electrification and the ongoing chip crisis continue, increasing the dealer adjustments that customers have been forced to pay. Shoppers are getting increasingly frustrated with the dealerships that are viewed as “middlemen” that only serve to increase the price they pay.
This topic is being explored among OEMs and will undoubtedly cause discomfort in the industry as OEMs and dealers figure out how best to align for the best customer experience.
How to deal with digital disruptors
Examples of disruptors that Star points out include Carvana and Shift, but there are many more that customers are faced with. Whether it’s for a used car purchase from a vending machine or shared mobility options like Uber or Lyft, digital disruptors are continually bombarding the auto industry with new “solutions”.
What we know right now is that people prefer personal vehicles to shared options, but disruptors create a distraction and can threaten the traditional ownership experience most dealers promote. The auto industry needs to be primed to act on new tools and ownership models that might be more attractive to owners like the convenience of all-in-one-payment pricing for a subscription model.
Finding ways to increase brand loyalty
The Star study found that half of dealerships “see decreasing brand loyalty as their biggest challenge”. It also discovered that nearly half of car shoppers consider three to four brands before making their purchase, clearly putting their brand loyalty into question.
Absent brand loyalty, OEMs and dealerships will struggle to retain customers who are upgrading their vehicles to any meaningful degree. It ends up costing tens of thousands of dollars every month to attract new customers away from another dealership or brand which, ironically, perpetuates the loyalty issue.
Seldom are there quick fixes along the customer journey. However, an intentional approach to improving the customer’s perspective on the purchasing experience can promote better loyalty and satisfaction during their ownership.
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