For decades, little seemed to change in the way automobiles were marketed and sold. From the consumer’s point of view, during the car-buying journey, dealers were largely in, well . . . the driver’s seat.
Then along came the Internet.
To suggest that the dawning of digital commerce brought a sea change in the way products and services were collectively bought and sold is, at very minimum, an understatement. The Internet has transformed consumers’ connection to automotive products, pricing, and places. Now it’s transforming their connection to its people.
Today’s consumers wield vast amounts of car-shopping knowledge about what product to buy (from vehicle reviews, specification sheets, and comparisons), what price to pay (from fair offer, trade value, and financing information), and at which place to make the final purchase (from dealer reviews and dealer ratings).
And yet in one key area of the car-buying journey—how a car buyer first connects with a dealership representative—nothing has really changed.
The last mile
In technology circles, the “last mile” is referred to as the final leg of the connection between the telecommunications, cable, or Internet provider and the end-user home or business. How well this connection is made—whether via age-old copper wires or advanced fiber—makes a world of difference to the overall audio and visual experience.
So, too, in the automotive world exists a last mile. In a car-buying context, it refers to how prospects entering a showroom are matched up with a salesperson to make a vehicle purchase. To date, this connection has largely come about through happenstance, often treated as either a game of Russian roulette (the retail up system) or the Wild West (the open floor system).
Such systems are not working to anyone’s benefit. For shoppers, they provoke anxiety in people who simply want to be educated about products and pricing in advance of making a high-ticket purchase. For top salespeople, they fail to reward their level of professionalism, which is likely already driving considerable revenue to the organization.
The 4 P’s
In simplest terms, marketing has been described broadly as the mix of activities companies take in communicating information about their products and services to consumers. Typically, the tactics centered around a framework that has come to be known as the “4 P’s”: product, price, promotion, and place. Using the right combination of each of the P’s could improve operating results.
Over the years, the automotive industry has invested billions to adapt these time-honored 4 P’s of marketing to three P’s of its own: the right product, at the right price, from the right place. Historically, each of these elements was controlled by dealers, and they alone determined how a great buying experience was defined.
The Internet turned this dynamic on its head, but not because each of the three components became less important. What changed was the amount of information digital consumers now had at their fingertips, combined with dealers’ increasing inability to differentiate themselves in the marketplace by leaning on their three P’s alone. What was needed was a fourth P: A person.
Over the years, millions of car buyers have reported the dread they felt when approaching a car dealership to make a purchase. And the angst is considerable. Consumers say they don’t like visiting car showrooms for two main reasons:
- They don’t know how they will be treated once they cross the showroom threshold.
- They don’t know who they will be partnered with during the sales process.
Reduce the anxiety
Is there a way to change this anxiety-provoking dynamic to make it work for everyone involved?
Studies suggest there is. One will provide a higher-quality purchase experience for the consumer, as well as offer a better level of engagement for the sales professional. The other is a virtual extension of the kind of research consumers are already doing online prior to arriving at the dealership.
The idea is a simple one: Lower the trepidation level in-market digital car shoppers feel prior to visiting a dealer by allowing them to preselect the salesperson they will be working with while shopping for a new vehicle. In this sales model, buyers know in advance who they will be meeting with, and have a sense of the type of purchase experience they can expect from reading online employee profiles and customer reviews.
For the overwhelming majority of today’s automotive consumers, this is exactly how they would prefer to shop for a car.
The Internet has demonstrated time and again its ability to break down business barriers. The automotive industry now has the opportunity to harness its power to bring people together, and bridge the chasm that currently exists between in-market consumers and dealership sales and service personnel.
Gary Tucker is the CEO of DealerRater, the leading car dealer review website, with more than 2.5 million sales and service reviews across 41,000 dealerships in the U.S. and Canada. An automotive industry veteran with more than 30 years’ experience, he was previously a senior executive with J.D. Power and Associates. He began his career on the showroom floor in a variety of sales and sales management positions.0
Latest posts by Gary Tucker
- Go the Last Mile During the Consumer’s Car-Buying Journey - June 30, 2016