Five critical stats about the auto-buying journey (and what to do with them)
In the age of digital marketing, the car-buying journey has evolved. Your dealership’s customers are no longer coming into your showroom before they’ve made up their mind about which vehicle to purchase. Instead, they’re doing the majority of their research (and decision-making) online, long before they enter your dealership.
New competitors, the rise of the internet, and shrinking profit margins are making it harder for your dealership to compete. But don’t worry, we’re here to help: Here are five key statistics — along with actionable next steps to take — that can help you boost your digital lead strategy.
1) 92% of car buyers research online before they buy
Perhaps unsurprisingly, the overwhelming majority of car buyers conduct research online before they buy. The plethora of information available online means your dealership has to work even harder to cut through the noise, and spark impactful engagements with potential customers. Long before they contact you, car buyers are researching their next purchase through video, third-party websites, and their own social networks.
Action step: Invest in your online marketing and lead tracking to make sure you are reaching as many customers as possible. Tactics like paid search, display ads, social media marketing, call tracking, and web optimization should all be considered for your integrated marketing plan.
2) Your service department accounts for almost half of gross sales
Dealers are feeling the pinch as profit margins continue to shrink on new vehicle sales. The average dealership’s take is just 2 percent of a vehicle’s list price. (Or, a mere $400 for a $20,000 car sale.) This makes the revenue you earn from your parts, services, and body shop even more important to your business.
Action step: With dwindling margins, dealerships need to make sure they are dialed in and meeting needs around staffing, customer outreach, and fixed-ops. Your team should be proactively scheduling routine maintenance appointments, upselling customers with warranty extensions, and making regular service calls.
3) 59% of car buyers are not contacted post-purchase
A reported 59 percent of consumers say they were never contacted by their dealership after purchasing their vehicle, and that’s a major missed opportunity for dealerships. A significant amount of your dealership’s revenue comes from customer loyalty (repeat customers) and fixed ops. In other words, not reaching out to customers after they’ve purchased a car from your dealership means you’re leaving revenue on the table.
Action step: Make sure you follow up with your customers post-purchase. You can email or call them to schedule maintenance and service appointments, check in on how they are enjoying their car, and of course, follow up with new promotions and any specials you have.
4) Nearly 2 in 3 potential car buyers are considering a used vehicle
Higher auto loan financing rates, combined with a higher price point for new cars, means that nearly 2 out of 3 car buyers are leaning towards purchasing a used vehicle instead of a new one in 2019.
Action step: Don’t just run digital campaigns for the new vehicles on your lot — take the time to target your marketing towards prospects that are on the hunt for used cars as well. By creating digital campaigns that reach out to potential used car buyers, you’re guaranteed to win more business.
5) Only 1 in 3 potential car buyers know the exact vehicle they want to purchase
A 2018 study by Cox Automotive discovered that 2 out of 3 car buyers don’t know what car they want before beginning their car buying journey. With such a high percentage of prospects being undecided, it’s critical that your digital campaigns reach and influence them during the ‘awareness’ and ‘research’ stages of their buyer’s journey.
Most new car buyers start their search on a third-party site before moving to your dealership site. In order to effectively capture their interest and turn them into a lead (and then a sale), it’s important to try to reach them on these increasingly important third-party research sites.
Action step: Set aside a budget to market your dealership on third-party sites so you can capture your prospects’ interest while they are in the awareness and consideration phase — before they have moved into their final decision phase. Key third-party players include Auto Trader, Kelly Blue Book, Cars.com and CarFax.