New Technology, Traditional Customers – ofcourse!

Do not be mistaken by the fact that the Internet is a new technology for automotive shoppers. Online purchasers are not a new breed of car buyer – they are, in fact, surprisingly traditional. Understand that and you can close more of them, faster and for higher profit than ever before.

This is not speculation. The findings of a recent Cobalt report called Lost Opportunities: The 2005 Industry and Dealership eBusiness Performance Study confirmed that online shoppers generally share a distinct but familiar customer profile.

Of course, you have to cut through a lot of statistics to get the full picture. Isolate key figures, though, you’ll notice a distinct trend:

• Just 8% of leads that closed were closed at the dealership to which the lead was submitted – ONLY 8%!
• Of those 92% that closed elsewhere, 34% bought a new vehicle make other than what they initially requested
• Of those 92% that closed elsewhere, 42% were for used vehicles of any make
• Among those who purchased from their intended dealership, price was the primary factor in determining the purchase 39% of the time – dwarfing the next most common reason (dealership response, at 21%)
• Of those who purchased another make, more than 55% said that the deciding factor was the different brand
• The longer the shopping process, the more likely that a used vehicle would be purchased
• The majority of leads either closed quickly (42% in less than 30 days) or slowly (32% over 90 days)
• Among dealerships showing the most success with online customers 77% provided immediate responses to customers’ questions about price

The conclusion? That online customers want a fast response and a good price. It’s that simple. These are classic customers – people who are literally ready to close today if you can give them a price that meets their budgets and expectations. And if you can’t, they’ll wait until they find someone who can.

There is clearly relatively little brand loyalty among these shoppers – even among the large percentage who say that brand was the primary reason they bought elsewhere. To see why, just consider the nature of online shopping.

Like all customers, online shoppers are not naïve to the point that they submit their information for a brand that doesn’t appeal to them. After all, automotive brands are known quantities – they’re not mysterious entities that customers discover for the first time when they step onto a lot.

What’s more likely is that these customers simply aren’t terribly concerned about brand, and they’re willing to consider a wide range of options until they find a car that meets their other, more important criteria.

When asked why they chose whatever vehicle they finally purchased, of course, it’s natural for them to say “brand” – they did, after all, switch preference from their initial choice. But that’s really just another way of saying is that they found a vehicle with the qualities they were looking for – price, availability, color, you name it – somewhere else.

So what’s a dealer to do? There are three immediate steps:

First of all, respond immediately – and not just with an email, but with a phone call. These are shoppers who are ready to move, so don’t give them the chance to get away.

Secondly, give them a price. If 92% of online shoppers buy somewhere else, you’re not taking a big risk here, and if your prices are aggressive, you stand a much better chance of getting that customer in the door.

Third, be flexible when it comes to selection. Since so many of these buyers don’t care if you’re selling Ford or Fiats, your best opportunity for success is to demonstrate value wherever it happens to be in your store, whether it’s the new vehicle showroom or the used vehicle lot.

Follow these three simple rules, and you’re much more likely to improve your favorability among online shoppers – and that translates directly into sales.