In the past few months I’ve had the opportunity to speak with dozens of dealers at industry events, advisory panels, and on their showroom floors. In these discussions, two topics typically emerge—profit and the customer experience.
In regard to profit, the discussion often revolves around the great run we’ve seen in our industry the past few years, followed by the immediate mention of how transparency has put pressure on profit per deal. As a result, the discussion often transitions to the customer experience and how dealerships position themselves to differentiate in a highly competitive and information-rich selling environment.
The Limitations of Traditional Marketing
These numerous discussions reminded me how traditional ways of marketing, including online, often struggle to deliver both profits and a better customer experience. Even when the online experience is favorable, many times consumers experience disconnect when they visit the brick-and-mortar dealership.
These observations appear validated in a recent study. Roland Berger Strategy Consultants notes that sales from dealer website leads can mean in-store margin erosion of 20% to 30%. Lead erosion from aggregator websites can be as high as 90%. Another report, this one from Automotive Ventures, notes that just 1.9% of vehicle shoppers complete online forms to contact dealers.
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