Market Focus: Automotive Dealers Go Digital
Today's car buying process begins long before a customer sets foot in the showroom, making it increasingly important for dealerships to have a strong online presence and reputation.
Recent research from J.D. Power & Associates found that 79 percent of consumers looking to buy or lease a new car use the Internet in their purchasing decisions, and visit an average of 1.4 dealerships before buying, down from 4.5 in 2005.
This trend is requiring dealerships to rethink their sales and marketing strategies.
"Our digital storefront is very important to us," says Jason Cohen, Internet sales director at DCH Brunswick Toyota, a car dealership in North Brunswick, N.J. "Customers visiting our Web site are more likely to buy from us, so we are trying to draw as much traffic to our site as possible."
To help dealerships attract site visitors, many online tools specifically designed for the automotive industry let dealerships communicate with potential customers on their sites. Among them is RouteOne, an online solution that lets consumers make vehicle selections from inventory, estimate payments, and even apply for financing. Dealers can use the tool to obtain a site visitor's credit score, determine trade-in value, estimate fees and taxes, manage the credit application process, and communicate application status with the customers, all in real time.
Other tools can automatically generate and send price quotes to Web site visitors while they're checking out car models online. DCH Brunswick Toyota uses a white-labeled Digital Salesperson solution, but other vendors make similar tools. One such company is Digital Air Strike, a social media, online reputation, and lead response technology provider. Its SmartQuote solution recently delivered its 6 millionth price quote to a car-buying consumer on behalf of one of its auto dealer partners.
Web chat is another tool that many dealerships are using to expand their online customer pipelines. And customers are responding positively; an Accenture survey found that 68 percent of car shoppers welcome the opportunity to chat online with the dealership. In 2012, Contact At Once, the largest automotive online chat platform provider, delivered nearly 5 million chats to dealers, up more than 70 percent from 2011.
Through a third-party contact center outsourcer, DCH Brunswick Toyota offers live Web chat 24/7. For chats after hours, the contractor sends a chat transcript to DCH Brunswick Toyota's CRM system so salespeople can follow up in the morning. "Chat has definitely been growing for us," Cohen says.
And when it comes to customer service, it also works in a dealer's favor to have a mobile app. According to research from FordDirect, nearly 40 percent of auto shoppers access dealership Web sites using mobile devices such as smartphones and tablets.
Also seeing strong growth among the car-buying public is the use of social media. Consumers increasingly are turning to sites like Facebook and Twitter before making purchasing decisions, showing that they don't trust ads; they trust each other.
It is therefore very important for dealerships to monitor and respond to issues raised in social media. According to FordDirect's research, 63 percent of car shoppers said they would be less likely to buy from a dealership that receives negative reviews online. At the same time, negative comments can be an opportunity to win over customers, as 59 percent of consumers said they would feel more positive about dealerships that respond to negative posts.
Social media can affect a dealership's bottom line in other ways as well. FordDirect's research found that 42 percent of consumers are interested in connecting with dealerships via social media for access to coupons or information about sales events.
"Digital technology is a key driver in dealer sales and profitability," said Valerie Fuller, chief operating officer at FordDirect, in a statement. "Social media and reputation management can help dealers attract customers, increase engagement, and ultimately positively influence where consumers elect to go to buy and service their vehicles."
At DCH Brunswick Toyota, Cohen says he maintains accounts on all the major social sites, "not so much as a lead generation tool but as a brand recognition tool."