The internet has completely changed the auto sales process. The average consumer spends hours online prior to setting foot in a dealership and only visits one or two dealers before buying a car. They are more empowered than ever thanks to unprecedented access to information; entering showrooms with a deep knowledge of the vehicle, available incentives, financing options, and even the dealership’s history, armed and ready to make an informed decision at a price point they are comfortable with.
As a result, dealers today may need to consider consumer preconceptions of what they want, which in some cases may be based upon misinformation, and adjust their sales engagement accordingly. Although retail and other sales verticals have come to rely on data to orient themselves toward the consumer and match the right product or service to the best customer, there has been no such notion in auto. Fortunately, dealers can access more information during the sales process to better understand their prospects and customers. To catch up with the times, they may have to put more trust into data so that they can better engage with consumers, match them to the right offers and vehicles, and, hopefully, increase overall sales.
These new kinds of data aren’t radically different from what dealers already use. With available consumer-initiated programs like prequalification and lead generation, a quick screening of a consumer’s credit score can allow the dealer to get a sense of their credit standing. This is instrumental in helping the dealer to understand what financing options could be made available to them as well as help the consumer initiate the financing process, if they so desire. This can be done in the showroom, with consumer consent, using a soft pull credit inquiry and is a relatively easy process. The difference here is that the dealer should request this information and perform the data pull prior to the test drive.
This gives both the dealer and consumer a clearer picture of what the consumer may be able to afford from the early stages. Can they afford the car they are looking to test drive? Can they afford something one level up? Or would they perhaps be best suited for a car one level down, or with a lease offer instead of a purchase? By accessing a credit score, a dealer can better help to determine the best match for each consumer who walks into their showroom.
This is good for the consumer as well. ‘Soft credit inquiries’ do not affect their credit score, and consumers will have more detailed information about some financing options that fit their credit profile. The result is that a more informed consumer will be speaking to a more informed dealer, rather than working off their respective assumptions. After all, dealers should be informed about possible lenders and the packages that match with different levels of credit scores. An educated dealer can help build the best match for a consumer – frequently even better than what the consumer might be able to research online. That consumer, rather than feeling forced into a purchase of a car they maybe want, may now leave feeling like the dealer was working on their behalf.
That level of engagement should be a dealer’s dream. However, getting there requires them to pull this data as early as possible in the sales engagement. Waiting until the end, when the consumer is already sitting down at a desk right in front of them to negotiate price means an increased possibility of a lost opportunity. If the dealer and consumer both realize the consumer can’t afford the car at the same time, the odds are that the consumer will get up and leave feeling dejected. The dealer could have prevented this by better engaging with them throughout the process aided by key insights about the consumer’s financial profile.
With the data tools available, changing the entire sales dynamic is really only a matter of dealer buy-in. But that requires a shift in mindset. Too many dealers may have tunnel vision, focused only on their product. Dealers should understand that their emphasis ought to be on their buyers, rather than simply pushing cars.
With consumers conducting their research well before they set foot in the dealership, dealers need to arm themselves with as much information about their prospective customers. Dealers today must be consumer-centric, working with as many data sources as possible to help them match a consumer with the appropriate vehicle to optimize the sale for the consumer AND the dealer. This is more important than ever if auto sales remain flat or decline in 2017. Those who can build relationships will likely find themselves completing more sales and potentially building a better reputation through word-of-mouth as well.
For more information on how we help auto dealers “seal the deal” with insights that drive, contact us today!