In our ongoing endeavor to keep our dealers educated, AutoLoop recently conducted two key studies to help salespeople better understand, leverage, and convert more of their leads into sales. And in this article, we identify three key insights into prospect behavior gleaned from the studies, as well as three actionable strategies your store can start using right away to convert more leads into loyal sales customers.
Issue 1: Customers Don’t Buy on First Visit
To get a feel for the prospect mindset, AutoLoop looked at prospects who showed up at a dealership but did not purchase on the initial visit. When asked why this was, responses varied, but the top four players were:
- Money (42% of responses)—particularly discrepancies between the price advertised online and the price the customer was quoted in-store.
- Time (35%)—customers prefer to conduct their own preliminary research beforehand.
- Inventory (19%)—often, customers have a specific vehicle in mind when they visit.
- Salesperson (4%)—some customers didn’t have a positive experience with their salesperson.
Another insight is that the average dealer only follows up with about half of all customers. This is mostly due to time restrictions leading salespeople to prioritize follow-ups to the prospects they feel are most likely to make a purchase. However, according to our findings, almost half of all follow-ups are being spent on the two prospect groups with the lowest chances of buying. Those are the prospects who expressed issues with cost and salespeople. In other words, dealers are prioritizing the wrong prospects.
Solution: Prioritize Prospects from the Sales and Service Ledgers
To help solve this issue, we used our predictive analytics to identify several key characteristics of prospects with a high likelihood of re-purchasing. Those traits include your dealership’s influence on the customer, inventory as related to what your customer was searching for, engagement with your store, equity position of their current vehicle, and the timing they choose to shop.
So, the challenge for you is to identify the prospects who have these key traits. To achieve this in the most efficient way possible, we highly recommend tuning in to your Sales and Service Ledgers frequently. The Sales Ledger sorts your best equity mining prospects top-down for peak visibility. And the Service Ledger helps you target customers coming through your service drive, presenting an easy opportunity for in-person conversations.
Plus, you can even filter these prospects down – in either ledger – by upcoming appointment, lower payment, equity, mileage, warranty term, end of term, and more.
Issue 2: You Don’t Always Know Why Customers Return or Deflect
Tapping into the findings of the AutoLoop Automotive Digital Engagement Study, we determined that a good value for the money and a good selection of vehicles were the primary reasons customers chose a dealership for a second vehicle purchase. So it should come as no surprise that the reasons why a customer would not choose you again would be because prices were too high or they were planning on purchasing another brand.
Solution: Provide a Better Experience
For most customers, “value” isn’t as simple as getting a vehicle of equal quality to the amount that was spent (which is the equation many salespeople rely on). We found that for most customers, “value” is determined by the quality of the overall experience with the dealer, across all touchpoints.
Issue 3: Buying Decisions Take Time
Our research shows that spending power is one of the best predictors of whether customers will buy. Of course, you have no influence over that, but you can certainly help customers better understand and leverage the spending power they have.
Solution: Accelerate Sales with an Equity Analysis
When it comes to equity, many dealers simply aren’t leveraging every opportunity at their disposal. Based on our extensive research, we recommend dealers take a multi-tiered approach to engaging customers about equity, via the following opportunity areas:
- In marketing communications (emails, etc.)
Dealers see almost twice as many purchases from marketing communications when these marketing communications include equity messaging.
- During a test-drive upon initial dealer visit
Customers are significantly more likely to buy at initial visit and were more likely to come back if they had an understanding of their vehicle’s equity.
- In the service drive
Here, your staff can easily frame the equity conversation around the fact that customers are constantly weighing the value of servicing their older car versus purchasing a newer car. This conversation enables your associates to identify the customers who are in a good place to make a trade.
There are many valuable insights to be found within the data or processes of your dealership, if you know where to look. To learn more about these insights, or for any other questions you may have about AutoLoop solutions, talk to your Performance Manager.
Customer Only | January 10, 2019