How Dealers Can Adapt to Changing Buyer Expectations

by automotiveMastermind

A lot has changed since 2020, from the way people shop and consume media to the way they connect with each other. The global pandemic put a spotlight on all industries (not just dealers), testing all brands’ abilities to deliver personal and intuitive customer experiences across channels.

According to a recent report, 40% of companies added a completely new communication channel in the last year, with most businesses prioritizing messaging platforms like chat features embedded on their websites. The same study found more than half of customers now value customer experience more than they did last year, meaning customers are now expecting experiences that are more personalized and convenient.

The ongoing chip shortage and inventory crisis put even more pressure on dealerships to stay in communication with their audience in 2021, with relief not in sight until at least 2022. Amid ongoing challenges, increased demand and changing buyer expectations, forward-facing dealerships have adopted new ways of engaging and retaining customers.

In this blog post, we’ll explore:

How changes in the automotive industry have changed buyer expectations
How dealers can leverage data to adapt and compete
How dealers can improve the automotive path to purchase and retain buyers

How the Automotive Industry Has Changed

Ongoing new vehicle production delays and rising consumer demand for pre-owned vehicles has sent already high wholesale used vehicle prices even higher in recent months. In August, the average paid price for new vehicles rose to $43,355. As a result, nearly half of car shoppers now say they will likely postpone their purchase due to the chip shortage.

For the buyers who do remain in-market, brand loyalty has steadily declined. According to IHS Markit, automotive brand loyalty among U.S. consumers for new vehicle inventory dropped to a six-year low in June 2021.

It’s important to note, body style loyalty remains strong – increasing by 1.1% year-over-year in June according to IHS Markit, meaning consumers are willing to switch dealerships or brands to buy the body style of their choice.

As a result, the ongoing inventory crisis combined with rapid digitization due to the pandemic have significantly sped up the market’s interest in online-only retailers. In fact, Carvana, Vroom and Shift all saw record-high sales in Q1 2021.

How Buyer Expectations Have Changed

With the automotive retail industry often characterized by inefficient customer experiences, online-only car retailers like Carvana and Vroom are capitalizing on conventional dealerships’ experience gaps with convenient self-guided offerings like auto-populated contracts and contactless vehicle delivery.

Carvana and Vroom make purchasing a vehicle extremely easy, and consumers are gravitating toward this model. If your competitive advantage is great people and great service, you also need to match the front-end experience the online-only retailers are providing to give your customers the full package. This starts with establishing a transparent customer experience tailored to each individual.

To accomplish this, dealers need to leverage the most valuable tool at their disposal: their customer data. Leveraging first-party insights, dealers are empowered to engage buyers with a personalized approach online-only competitors can’t match – and deliver the convenient customer experience today’s buyers expect.

How to Improve the Dealership Customer Experience

To compete with the convenience offered by online-only retailers, acquire pre-owned inventory and engage prospective buyers in today’s challenging market, dealers need to create a buying experience that is true to their brand promise and tailored to their customer at every touchpoint.

Regardless of how buyers engage with your brand, keeping them informed and connected throughout the entire buying journey in a convenient way is key to delivering an excellent brand experience.

This starts with establishing a transparent customer experience tailored to each customer. Every interaction from that first touchpoint should speak directly to the things your customer cares about most.

These insights also enable dealers to deliver the convenient customer experience today’s buyers expect. Task your team to look for ways to improve the efficiency of the buying experience, including shaving off excessive time wasted repeating data collection and staying one step ahead of your customer using predictive analytics.

By leveraging sales and marketing technology powered by predictive analytics to determine the next steps your customer is likely to take, dealers can improve the efficiency of their process by automating several tedious tasks and proactively speeding up the process with efficient offerings like online pre-qualification forms.

Using this approach, aim to create a buying experience that takes less than 30 minutes online and less than 60 minutes in-store. While for many this may seem unattainable, with buyers increasingly expecting ease and convenience, dealers can no longer afford to keep customers in the showroom for a four-hour deal.

How to Use Data to Retain Buyers

In today’s hyper-competitive market, these same tools and technology are critical to proactively retaining buyers and protecting your market base. Remember, you have a unique advantage over your competition when it comes to engaging your audience: You know them.

Leveraging unique access to insights on their customers’ buying behaviors and vehicle history, these tools enable dealers to predict when their customers will re-enter the market and meet customers where they are with personalized messaging and a convenient experience designed to retain their business.

For example, some dealers are leveraging advanced dealership marketing tools to serve as an ongoing customer concierge through well-timed service alerts. By staying in consistent communication with buyers, dealers are empowered to create the type of service experience that retains buyers even amid increased competition.

As buyer expectations change and competition grows more and more fierce, dealers need to challenge their current models and leverage data to understand exactly what their customers want. This in turn will help you provide a robust customer experience that builds hyper-loyal customers even amid challenges.

Buyer Expectations Have Changed – Here’s How Dealers Can Adapt