Automobile dealerships dabbling online and considering the Internet as a marketing option have come to realize it is no passing fad. The information superhighway becomes more and more crowded each day as consumers are finding a comfortable alternative when shopping for vehicles.
According to a recent survey conducted with new-vehicle buyers, the Internet is now changing the way consumers prefer to be treated at the dealership location as well. Most revealing from the study was the fact that buyers using the Internet place considerably more importance on the test drive.
As expected, Internet shoppers reported less need for personal interaction with a salesperson when choosing a new vehicle. After entering the dealership, Internet shoppers reported being influenced much more by the test drive - with 64.9 percent indicating the test drive was "very important" or "of critical importance" to their purchase decision, compared to 55.5 percent for non-Internet users. ("Please refer to Jack Bennett's article The Demonstration Drive: A Refresher Course, on page 38 for demo drive tips").
Dealerships most likely to feel the impact of this change in consumer shopping behavior first will be those offering imports. The recent Polk study showed that more than 30 percent of customers purchasing a new vehicle from European manufacturers used the Internet when shopping for a new vehicle. That's double the rate for domestic new-vehicle buyers using the Internet.
Polk's study also showed Internet usage is highest among more educated and more affluent vehicle buyers, with usage exceeding 40 percent in the San Francisco-Oakland market, but much lower in other markets (less than five percent).
This instant access to vehicle/dealership information is changing the way customers relate to automotive dealers. Dealers must recognize the differing needs of this customer group, which is especially true for dealers offering import vehicles and competing in markets where Internet usage is high.
So what can the dealership do to appeal to customers who shop through the Internet? Emphasis should be placed on making the test drive experience as positive as possible. Arranging instant test drives without the need for salesperson interaction and with a vehicle that matches the customer's specifications will be key to closing the sale. Sales interaction with the customer should focus more on key attributes that distinguish the test drive vehicle from its competitors, instead of just product features. The salesperson must also understand the choices the consumer is evaluating as if it was his or her own purchase decision.
In addition to treating Internet Shoppers differently when they enter the dealership, dealers should consider relationship-building efforts through the Internet, both before and after the customer comes to the dealership. Communication efforts for Internet users can include quick responses to e-mail inquiries, scheduling test drives at a convenient time and location for the consumer (e.g., consumer's workplace or home), and continued e-mail interaction after the sale to help gauge satisfaction and to build customer loyalty.
The 1997 study showed 40.1 percent of new-vehicle-buying households report using the Internet on a regular basis, nearly a threefold increase since Polk's 1995 study of new-vehicle buyers (15.6 percent). This explosion in usage makes the Internet an important marketing tool for auto manufacturers and dealers, particularly since one-third of the respondents reported the Internet was "very important" or "of critical importance" to their purchasing decisions.
The Polk study also found Internet shoppers spend more time thinking about their new-vehicle purchases, are more likely to buy/lease new sport-utility vehicles, sporty or luxury cars, and are less likely to be loyal customers. Therefore, they became good competitive conquests for auto manufacturers and dealers.
Internet vehicle shopping is here to stay. As more and more consumers find the Internet a useful tool for the new-vehicle shopping process, dealership treatment will need to continually change as well. Be prepared to use this new shopping dynamic to your dealership's advantage.
NOTE: Findings are an abstract of Polk's Manufacturer Loyalty ExceleratorTM (MLEX) product. The findings are based on information gathered directly from consumer surveys through a proprietary loyalty study, conducted exclusively for the automotive industry. Polk contacted new-vehicle-owning households who returned to market during the 1997 model year to purchase or lease a new vehicle. This study includes responses from nearly 40,000 consumers.