The Real Reason Your Vehicle Sales Are Falling Knowing how to generate sales is one of the most difficult aspects of dealership management.
Even with the finest car models in town on display and a stellar car sales team, the end-of-month numbers remain unchanged.
The fundamental flaw with such sales optimization strategies is that they fail to address the underlying problem. We’ll elucidate.
In the past decade, automobile purchasers have undergone a radical transformation. People previously distinguished brands based on their products. Now, they make this decision based on their experience throughout the entire consumer journey.
Unfortunately, as purchasers evolve, the current automotive retail model is rapidly becoming relegated to a bygone era. Many dealerships operate in a manner that diminishes the consumer experience rather than enhancing it. In fact, only 1% of automotive consumers report being “fully satisfied” with their car-buying experience.
To aid in your comprehension of the issue at hand, we explain how communication, organizational structure, and retail channels are frequently misaligned with modern consumers, thereby negatively impacting the customer experience and your sales figures.
You are leaving yet another voicemail, but the consumer has already moved on.
Not being able to contact prospective purchasers and existing customers is a significant issue for dealerships. We are more connected than ever before; therefore, why is it so difficult?
Consider the following case.
- John submits a contact form on your website in order to receive more information about a car you are selling.
- After 20 minutes, Gary from Sales dials John’s number.
- John’s phone is unanswered.
- Gary leaves a voicemail message.
- Gary sends an email to John.
- A few days later, Susie from Sales sends another voicemail and email. John never answers.
- John has disappeared.
There are multiple problems present.
- Response times are slow. 20 minutes may not seem like a long time to wait for a response, but it can make or destroy a relationship for the current generation. Twenty minutes could determine the success or failure of a sale.
- Generic communication. The majority of BDC and Sales teams lack the resources and time to provide personalized responses to each potential customer. Typically, they respond to each inquiry with the same, impersonal response, which is likely to alienate customers.
- The outdated method of outreach. Phone conversations are rapidly becoming obsolete. Statistically, fewer than one in four calls from an unknown number are answered.
Customers expect promptness, superiority, and convenience. They communicate with businesses in the same manner as they do with family and acquaintances. They send a text, email, or direct message through social media and expect an immediate response. Anything else may feel cumbersome and obsolete.
Your company is vertical, whereas customers are horizontal.
Consumer-brand relationships resemble intimate relationships more and more. Consumers anticipate that brands will understand their preferences, provide sound guidance, and provide a consistent experience each time they interact.
There is a reason why consumer technology companies like Uber and Amazon are considered “best-in-class” for customer experience. When purchasing from Amazon, consumers can do everything in one location, including research, purchase, return, and review. Amazon guides them through the process by providing recommendations and an intuitive platform that nudges them delicately from one step to the next.
When purchasing a vehicle, the narrative unfolds very differently. From purchase to after-sale, automotive consumers encounter friction at every stage of the customer journey. Almost every time they communicate with the dealership, they must speak with a different individual or team. They may have to repeatedly convey who they are and what they want to a complete stranger.
This is primarily due to the industry’s and dealerships’ isolated structure. According to 41% of customer service professionals, organizational silos represent the “greatest barrier to customer experience.” They prevent dealerships from providing customers with the consistent experience they desire.
Each department at the dealership, from sales to service, operates independently with minimal or no interaction or information sharing between teams. In the sales pipeline alone, there are the marketing team for lead generation, the business development center (BDC) for lead nurturing, possibly another team for converting leads into appointments, the sales team on the dealership floor, and more.
When you consider all the departments that customers interact with — sales, finance, and customer service, among others — that’s a lot of different people to communicate with and a lot of opportunities to frustrate prospective purchasers.
While you’re on the sales floor, your customers are in the cloud.
Purchasing a car used to involve the following steps:
A potential customer enters your dealership to view your inventory. They speak with your salespeople, who demonstrate vehicles that meet their needs. They visit a few of your competitors’ sites to repeat the same actions. They may return for a test drive and, ultimately, to sign the dotted line. All of this occurs in conjunction with the dealership.
However, this is no longer how individuals search for cars. And for that, you can credit the Internet. The internet has changed the channels people use and their browsing behavior when purchasing a vehicle.
A significant McKinsey study that examined auto retail trends in the United States, Germany, and China reveals that an increasing number of people supplement their interaction with a physical dealership with online channels during the car-buying process. Eighty percent of consumers now utilize online channels when gathering information and evaluating their options, according to the study. Omnichannel shopping is the commercial term for consumer behavior that involves both online and offline interactions.
In the preceding investigation, McKinsey identified omnichannel consumers. To begin, consider “the hybrid customer.” They account for one-third of car purchasers. When seeking to purchase a vehicle, they utilize both online and dealership resources. They prefer to visit the dealership when evaluating their options in order to gain actual driving experience. The second group is “the online-savvy modernists.” They are increasingly dependent on the Internet. They typically gather information and compare options solely online, visiting the dealership only to close the transaction.
However, when these modern consumers want to buy a car, they are frequently unable to do so in the manner they desire. This is due to the fact that the automotive retail experience at the majority of dealerships is still geared toward the elder generation, who prefer offline shopping.
Your dealership’s survival depends on your adaptability.
The current retail model and its components are incompatible with the new generation of consumers.
And the risk is not limited to driving away customers and reducing sales in the immediate term; there may also be severe long-term repercussions. McKinsey predicts that if dealerships fail to provide the experience that consumers expect, this generation will cease purchasing automobiles altogether.
Shifting the emphasis to the customer experience is crucial not only for current sales but also for the continued existence of your company and the automotive industry as we know it.
Back to Blog