We part with 13.4% of our hard-earned wages on our vehicles. Young people spend up to an incredible 10% of their income on the insurance alone. So it’s little wonder that we really love our cars – and spend more time researching them than any other purchase.
Naturally, dealerships then work hard to win our hearts and wallets. While OEM websites now represent the “biggest single influence to purchase decision”*, dealers continue to play a critical role in the sale experience – according to Auto Trader’s Car Buyers Report 2017, 67% of buyers visited dealerships.
Dealers continue to play a crucial role in the sale: 67% of us visited them on the road to purchase.
Dealerships have historically provided an intimacy, intuition and ability to forge lasting relationships that was only possible through direct human contact. But we live in changing times.
Motivated in part by ‘desktop to drive’ broker sites such as Carwow, Drivethedeal and Carfile, OEMs have been scrambling to own take back ownership of the entire buying journey, offering end-to-end digital experiences. ‘Direct to consumer’ sites are springing up everywhere: Hyundai, Smart and Peugeot, plus (on the Rockar platform) Jaguar, Land Rover, and recently, Ford. Others are in conversations to develop this D2C offering – Mercedes-Benz estimates that 25 percent of its vehicle sales will be completed online by 2022.
Meanwhile, larger dealers are moving in the same direction. One CEO of the top five spoke recently of ‘end-to end’ online retailing of new and used cars – from research to purchase and finance, plus delivery and signatures: “It’s about making effortless journeys for customers, not complex processes”. In other words, satisfying customer needs, rather than ‘forcing journeys’ – for example, providing the option to have entirely online experiences.
“It’s about making effortless journeys for customers, not complex processes”Dealer CEO
The big shift to seamless digital sales is potentially rewiring the role of dealerships in the process. KPMG’s Global Automotive Executive Survey for 2018 reports that:
- three quarters (75%) believe that nearly half of showrooms won’t exist by 2025 as a result of the move to online auto shopping
- The only viable option for physical retail outlets will be the transformation into becoming service factories or used car hubs. New car sales will be processed via other, more digital channels. [67% UK dealers agree]
Justin Benson, UK Head of Automotive at KPMG, stresses the importance of lateral planning: “The majority of UK automotive executives are convinced that the only means for dealers to survive is by restructuring into a service factory or a used car hub in the future.
Change is happening quickly [we shared thoughts on connected experiences in a previous post]. And as history teaches, opportunists thrive in turbulent times: OEMs *and* dealers able to deliver seamless, customer-driven experiences across the physical and digital space (adapting operations accordingly) will be well-placed to conquer in the new world.
McKinsey described recently how businesses “will need to determine the best combination of online and offline touch points to shape the customer’s decision making and experience along the purchase journey. The rewards are great for those that get it right.”**
As history teaches, opportunists thrive in turbulent times.
But there’s long road ahead to genuinely achieve customer-driven, ‘seamless selling’.
Even the largest organisations are struggling to achieve even basic personalisation of websites (for example, serving up content based on browsing behaviour or car configurator options, or fed by interactions on other channels). According to Auto Trader’s recent Car Buyers’ Report, 85% knew they would have to spend ‘a lot of time and effort’ to purchase their next vehicle – and 75% of 17-24 year olds were ‘tired of looking around’. In the end, eight out of ten consumers are unhappy with their car because the search and selection process is so complex and confusing that they’ve ended up compromising.
This is compounded by the digital car-buying experience feeling transactional – one client recently described this to me as “like buying a pint of milk”. Forrester’s Q3 Automotive Wave 2018 puts it like this: “The auto brands we reviewed clustered together with little differentiation — they deliver limited and nearly equivalent functionality and user experience. To work their magic, automakers are relying on dealer efforts, not their digital properties, to draw consumers into dealerships.”***
There’s clearly a disconnect – and associated opportunity. Crudely, OEMs are prodigious at building brands, yet, as Econsultancy point out, they have limited direct retail expertise. Conversely, dealers are really good at direct relationships – 73% of us prefer their communication to OEMs’, according to Deloitte 2018 Global Automotive Consumer Study. Seamless selling needs to be more aligned – more symbiotic. We need to recreate the intimacy, relevance and flexibility at which dealers are so adept – in an omnichannel environment. Econsultancy put it more succinctly: “there is an opportunity here, for manufacturers to start learning more about their customers”.
We need to recreate the intimacy, relevance and flexibility at which dealers are so adept – in an omnichannel environment.
Easier said than done?
I elicited help from a proper expert: none-other than the best car salesman in Britain!
Jamie is charming of course, but what’s interesting is the way he speaks more like a marketer than a salesman. We discuss his Social targeting strategy; how he researches passion points of the local community to leverage specific product benefits and create associated events. How broadcast media is often so imprecise that it often creates confusion and a barrage of cold leads (Jamie has ideas on how to fix this, too). And similar to the CEO mentioned earlier, he describes his role in sales as “Removing barriers…my role is ultimately to minimise effort for the consumer”.
This language resonated; it’s terminology we use at Thunderhead, describing ONE’s role in customer-driven journeys. Working with a designer, I asked Jamie to visualise the ‘ideal’ selling experience from his perspective.
Perhaps the view of a salesman – someone who develops exceptional personal relationships – would resonate as we consider multichannel customer buying experiences?
Here’s the output:
It was thought-provoking; Jamie’s visual would not be out of place at a customer experience workshop. He was at pains to point out that we should take it with a pinch of salt: “people follow their own paths, and some take much longer than others, so we need to be flexible”. I couldn’t put it better myself: clearly, brands able to recreate this philosophy and approach in a multichannel environment, at scale, will be doing something very right.
Salesman’s view: “people follow their own paths, and some take much longer than others, so we need to be flexible”.
The simplistic, linear and idealised buying journey planning on which we’ve become reliant**** has changed radically in recent years, powered in part by technology. ‘Customer-driven’ journeys are providing unforeseen levels of responsiveness, fluidity and empowerment for automotive consumers, enabling them to purchase in ways that best suit their individual needs. So, as the market evolves at pace, vehicle purveyors will need to transpose the goodness offered by dealers across all channels – and at scale. Because amidst the upheaval, one thing won’t be changing anytime soon: customer engagement is the key to unlock business value.
If you need advice on seamless journeys, creating better automotive customer experiences across all channels (or need a stunning new car), Jamie’s probably a good place to start…
Or, if he’s busy doing the day job at Murray Volkswagen, do get in touch with me – I’d love to hear from you.
*31% – Deloitte: Navigating the customer journey – UK perspectives from Deloitte’s Global Automotive Consumer Study
** McKinsey – The Road to 2020 and beyond: What’s driving the global automotive industry?
***European Auto Brands’ Sites Don’t Meet Customers’ Evolving Expectations, August 29, 2018
Authors: Brendan Miller, Alex Causey with Christopher Andrews, Pascal Matzke, Jeremy Swire, Scott Ross and Amanda Chen
****Loosely: Paid advertising, website – brochure – direct communications – research – dealer – test drive – sale!