Mobile mania is officially here. It is not the future, it is now. And it’s going to dominate how dealerships interact and market to their customers.
Already, 93 percent of the U.S. population has a mobile device, and 40 percent have smart phones or mobile web devices. At some point in 2013, more people will access the internet using a mobile device than they will with a PC. In 2010 alone, mobile web browsing jumped 32 percent while there was a 90 percent increase in mobile app users.
The kicker is that people are using their mobile devices to conduct business—researching and shopping for products, even buying and selling products. Clearly, people are becoming more comfortable using their smart phones for various activities. People spend what amounts to 125 years every day playing the popular game Angry Birds. On eBay, a mobile transaction occurs every second; and recently, 72,000 burgers were sold in 72 hours via a Groupon coupon.
According to a recent study conducted by Ipsos OTX on behalf of Google, 78 percent of smart phone owners use their phones for shopping. “It’s happening faster than all of our internal projections,” Google Chairman Eric Schmidt told attendees at the Interactive Advertisers Bureau Leadership Conference in April of this year. There are more than 200 million YouTube videos played on mobile devices daily, he notes.
The study for Google is hardly the only example. Even, investment firm Morgan Stanley estimates more than $119 billion in commerce will be conducted over mobile devices by 2015.
Automotive Mobile Opportunity
Numerous studies indicate much of that commerce will happen in automotive. A recent study by mobile ad platform GreyStripe shows that 78 percent of the people planning to buy a vehicle in the next 12 months will use some sort of touch smart web device (iPhone, iPod Touch, Android) during the purchase process.
“Industry studies show approximately 17 percent of the U.S. mobile audience are ‘auto-intenders’—people who will buy a new car over the next six months,” says Sean Wolfington, owner of www.Tier10Marketing.com. “With 20 million auto-intenders in the mobile universe and one of three of them using a mobile device at some point during their vehicle search process, car dealers need to capture this market.”
Cars.com, which developed a mobile application four years ago, gets 18 percent of its traffic today from mobile devices. AutoTrader.com, meanwhile, is getting nearly a million hits a month with its mobile application. Traffic patterns indicate mobile users were most interested in finding vehicles for sale and locating a dealer, versus some of the more in-depth auto reviews and “research and compare” functionality. Like Cars.com, much of the traffic occurs on the weekends.
According to the GreyStripe study, 48 percent of the people who say they will use a mobile web-enabled device in their vehicle search will conduct initial research into vehicles; 44 percent will compare prices of different dealerships while on the lot; 32 percent will find a dealership using their mobile device; and 23 percent will actually use their mobile device to contact a dealership.
Importance of Apps
It’s not going to be enough for a dealer to have the mobile website or texting capabilities. Much of the interaction is going to come in the form of apps—compact software downloaded to the smart phone that performs specific tasks and is easy to use. There was 90 percent increase in app usage in 2010 and that number is only going higher. As of the fourth quarter 2010, 68 percent of smart phone owners used apps.
The question for car dealers is: How will they leverage mobile technology to market to and maintain relationships with their customers? At this early stage there are a few automotive mobile solutions providers who help manufacturers and retailers use mobile to attract, sell, and retain more customers for less cost than traditional or internet marketing. The leading mobile solution providers in the industry today are CarFactor.com, GroupAutos.com, IntellaCar.com, and DealerAppVantage.com.
Using Mobile Solutions to Attract Consumers
Some mobile apps help customers shop and are used by dealers to attract more leads and sales. Two popular apps that help customers in the car shopping process are Car Factor (www.Car-Factor.com) and GroupAutos.com (www.GroupAutos.com). As of April, Car Factor was the No. 1 most downloaded automotive app in the world. It has a four-star user rating, the highest consumer rating of any automotive app in the App Store.
Using Car Factor, consumers can build and compare vehicles, view vehicle reviews, and obtain pricing. Another app, newly patented, GroupAutos.com, gives consumers the ability to scan the bar code on a vehicle’s MSRP sticker and get an instant guaranteed low price on every vehicle in the dealer’s inventory.
“Dealers can advertise that they can provide Instant Guaranteed Low Price quotes in 60 seconds or less,” says Chad Collier, CEO of GroupAutos.com. GroupAutos.com has partnered with Affinity Development Group, Inc. (www.aagautogroup.com,) which operates auto buying programs for 50+ million Costco, AAA, and Navy Federal Credit Union members who bought more than 300,000 vehicles from 2,300 participating franchise dealers last year, more than any retailer in the world.Our auto buying programs offer attractive, pre-arranged pricing and deliver in-market purchasers with a 45 percent closing rate within 72 hours of first meeting with our exclusive, local participating dealer. We believe that GroupAutos.com’s patented mobile pricing app can significantly shorten the time it takes our members to drive off with their new car,” says Jeff Skeen, Affinity’s CEO. “We are working with Affinity to build an exclusive national dealer network of 3,500+ participating franchise dealers for GroupAutos.com’s customers to be able to instantly see GroupAutos.com’s Guaranteed Low Price while standing in front of the exact car they want to buy”, states Chad Collier.
Using Mobile Solutions to Serve and Sell Consumers
One observation regarding the growth of smart mobile devices is that customers have greater access to information and often are more informed about the vehicle than even the dealership salesperson is. So, IntellaCar is putting a different spin on mobile apps creating one that is for dealership usage. It has developed an app for the iPad and other mobile devices that help salespeople promote the dealership, vehicles, finance, accessories, and service. “Since most customers research online before visiting a dealership, they often know more than most salespeople about the vehicle they are considering, and this knowledge gap can hurt a salesperson’s credibility,” says Jim Hughes, cofounder of IntellaCar.
IntellaCar’s app helps salespeople quickly access product benefits that are tailored to the customers’ hot buttons (safety, performance, comfort, convenience, etc.), walk-around videos, pictures, videos about the dealership, certified programs, leasing, finance products, and accessories, along with introducing the customer to the service department.
“When used properly in the sales process, these showroom apps help salespeople increase their closing ratios, average gross profits and CSI, because they can answer questions quickly while also building value in the dealership and the products they sell,” says Bruce Polkes, Hughes’ partner at IntellaCar.
Sales consultants typically see an impact in the first week using IntellaCar, with results such as selling two to four more vehicles each per month while generating up to 30 percent higher gross and 47 percent higher CSI.
Dealers are also giving service customers access to these apps on iPads in the service lounge where they can view videos about additional services like car detailing, dent removal, and even new and used vehicle specials.
Using Mobile Solutions to Retain and Resell Consumers
Just in the last year, hundreds of dealers have started providing free apps to their customers following the purchase or service of a vehicle. One such dealer app, created by DealerAppVantage.com, lets customers view their owner’s manual, schedule appointments, buy accessories, get roadside assistance, find their vehicle in a crowded parking lot, find a cheaper gas station, report an accident, receive alerts when the parking meter expires or when their kids are going beyond the speed limit.
Enterprising dealers are finding the app helps to improve the customer ownership experience, satisfaction, and loyalty by delivering service reminders, recall notices, lease end tutorials, equity alerts, and specials that bring the customer in more often for service, repeat sales, and referrals.
The most popular tool on the DealerApp Vantage’s app is the ability to find gas stations that are less expensive, says Ed Louis, co-founder of the company. “Customers can save hundreds of dollars by using the Cheap Gas station finder to save money on gas,” he says.
“Customers love to use the app to make service appointments and view specials,” says Mike Adler of Laurel BMW, an AutoNation store. “Customers aren’t typing the dealer’s URL into the mobile browser anymore because it is a lot easier to use the app to get there.”
Dealerships are finding it a lot easier to give the customer a free app that they can use on their mobile phone than it was trying to obtain email addresses a few years ago. The good news is that their phone is always with them and the read rates of messages delivered to the phone are dramatically higher than through email.
“Our dealers post signs all over the dealership promoting the app in sales and service,” syas Louis. “Dealers download the app onto customers’ phones as they wait for the finance department and in service while they wait for their car. Many dealers also promote it to people who visit the dealership but aren’t ready to purchase by showing them how it can help them in the shopping process.”
“Our dealerships mobile app is advertised on all of our newspaper ads, in our service department and it’s a great selling point for salespeople in the showroom. The app has generated a big increase in website, Facebook, and showroom traffic,” Adler adds.
Get On Board Now
The time to put a mobile strategy in place is now. “The rate of adoption for dealers leveraging mobile solutions seems to be much faster than it was for the internet,” Wolfington, of Tier10 Marketing, explains. “A lot of dealers took a ‘wait and see’ posture when the internet first arrived, but it seems like they are reacting faster this time around.”
Dealers are learning that mobile is a cost effective way to stay in front of the customer. “We get a lot of leads from our app for a fraction of the cost of internet leads,” says Brian Benstock, co-owner of Paragon Honda and Acura, the top selling Honda and Acura dealer.
Dealers that get it and understand technology are going to be the businesses consumers want to interact with. It’s time to get ready with a clear mobile strategy that integrates into existing marketing plans.
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