Here is a stark but simple fact: for the past year, the marketplace has offered fewer active buyers than needed to sustain the dealer community. A Darwinian fight for survival proceeded; over the past year an alarming number of dealers went out of business. Those that have survived this first shakeout have proven they can deal with adversity. Going forward, those that thrive must gain and cultivate an operationally persistent competitive edge.
How can a dealer leap into this evolutionary winner’s circle?
The answer to this life-or-death question is hidden behind another: where do dealers have the greatest opportunity to impact a buyer’s choice of dealership? This is key. If you know the moment of truth—the moment when the customer is most open to a dealer’s courting rituals—you gain a distinct advantage over competitors. By closely observing the steps a consumer goes through to buy a car, the point of maximum influence ability becomes clear.
Two incontrovertible facts guide us. First, over 80% of car-buying customers use the Internet to gain an information advantage as they prepare to interview dealers who seek their favor. Consumers do this because they prefer to engage prospective dealerships from a distance until they have gained more information and have built trust. Second, an increasing percentage of customers extend their remote engagement further by sending their first expression of interest (a lead) over the Internet, to multiple dealerships. Dealers who thrive in the midst of the shakeout will have figured out how to seize advantage in the domain of the Internet customer.
The moment of truth, of course, is the point where the consumer has sent a lead to 3-5 competing dealerships. The dealer who leaps in front of the pack and first initiates the courting ritual, then is gently persistent with insightful words and offers over time, leaves his competitors clamoring in the dust.
Rapid response and effective follow-up are the one-two punch that knocks out the other guys. Experience shows that dealers who can deliver an immediate response with a price quote every time when a customer submits a lead, and personalized follow-up every time when the customer doesn’t buy, will see at least a 2 percentage point increase in close rate on average. Get these two critical steps right and you’ve made the leap into the winner’s circle. Why? Because so few dealers can pull it off.
Here’s the opportunity: customers want a quick, information-rich response. If consumers do not receive a quick response, they will walk away. A rapid, relevant response increases sales.
Speed is key, but it’s not the only important factor. Evolutionary advantage is also tied to the content of the dealer’s message. Customers want the dealer’s price! Dealers who hide it hurt their prospects for a sale.
A Ford dealer in Dallas which uses an automated tool to achieve quick price quote response recently received a note from a happy customer: “I am writing to you about my recent purchase of a new truck at your dealership. Late one night I sent e-mails to several dealerships, the only email I received that night was from your dealership. Not only was I surprised to get a reply that quickly, the email had several trucks with different options with prices on them. ….I will refer all my friends, family, and acquaintances to your dealership.”
A fast, relevant and transparent response is important in order to build customer confidence and trust. If delivered on every lead every time, a dealer will grow sales significantly.