For me, walking the car lot on a Saturday is nearly as fun as a day at the golf course. The shoptalk is great, I get to take something for a spin, and even if I don’t come out with the exact score (or price) I had in mind, I walk away with a sense of satisfaction. But, for many, the thought of having to negotiate one-on-one can be intimidating, and can turn the thrill of buying a new car into pure anxiety.
Choosing what to buy—make, model, trim, and a seemingly endless number of options like warranties and infotainment—is only the first step. Once the vehicle and options are selected, the real research begins: What is a fair, good, or great price—and how do I get it?
Here at Jumpstart Automotive Group, we found that 69% of shoppers listed price as a top criteria when deciding to purchase—making it the second-most important factor behind safety and reliability. This mindset is hardwired into consumers across categories—from apparel to appliances—but price is especially integral to the car-buying process, primarily due to the level of investment and the lengthy duration of ownership.
And I think there is added pressure to get a good deal because of the degree of pricing transparency consumers have when shopping for a vehicle. As a consumer, you might never find out what Target paid for that Nikon camera, but you will find out what your local Ford dealership paid for that 2014 Explorer.
So how can technology help ease car-buying anxiety?
1. Knowledge is Power
There is no substitute for doing your homework. Thanks to research sites like J.D. Power Autos, U.S. News Automotive, and NADAguides (which provides an estimated five-year cost of ownership—factoring in depreciation, insurance, fuel, and maintenance, and gives that total cost an overall value ranking), customers can research every detail of a vehicle and read customer, editorial, and dealer reviews without even stepping foot on a lot. Car and Driver’s new online AccuPayment feature (in beta), allows customers to estimate monthly financing or lease payments based on transactions in their area.
TrueCar allows consumers to see what others in their geographic location have paid—and then connects them with local dealers to get TrueCar pricing.
Rick Gibbs, CEO of Dealer.com, a top provider of dealership marketing and operations software solutions, offers his advice on how dealers should respond to the transparency, “Dealers are smart to have a deeply integrated marketing strategy that ensures consistency across all channels—from rich banner ads and inventory pricing to vehicle detail pages (VDP) and social media. Consistency breeds trust, and trust leads to a good customer relationship and, ultimately, a sale and brand loyalty.”
Currently in beta in the San Francisco Bay Area, Google.com/cars allows consumers to start communicating with dealers via email—providing the quick, non-committal dialogue modern consumers thrive on. When someone searches for a vehicle on Google, a special search result shows that make/model and where it’s available from local dealers. Customers click to choose their options, select a dealer, and then hit a “Get Quotes” button—providing only their name and email address.
3. Mobile is a Must
Jumpstart found that 76% of in-market auto shoppers surveyed used a smartphone or a tablet while researching a vehicle and 45% looked up information on a mobile device while they were at a dealership. Mobile can no longer be considered a “second screen;” it’s an integral part of the shopping process and any auto manufacturer that hasn’t optimized their advertising campaigns and consumer website for mobile are missing 30-40% of their target audience.
4. Replace Face Time with FaceTime
A handshake isn’t the only way to make a connection. Elise Kephart, the Internet sales manager at Sunset Honda in San Luis Obispo, has found a new way. Instead of relying on email, Kephart posts video responses to her customers. As she explains on thedealergeek.com, video responses have helped give her customers the emotional connection they’re looking for.
5. Rock It Old School
Technology can sometimes be code for good service. After instituting no-haggle pricing two years ago, Austin-based First Texas Honda moved from 380th in sales volume to the top 30 among Honda dealerships. Dealership President, Jim Olmstead explained to Automotive News in June 2013, "People don't mind us making a little money, but they don't want to be the person who gets their heads knocked off. We don't hit any home runs, but we hit lots of singles.” First Texas Honda prides itself on keeping customers at ease in their relaxed, “no-pressure” showroom, offering free coffee and live music (by an all-employee house band). Their “old fashioned” approach is paying off with an average 4.7 out of 5 from Google consumer reviews (although a less stellar 3 out of 5 on Yelp).
The Bottom Line
While there’s plenty of widely available information, it’s still hard to sort through. It needs to be simplified. Customers want—and need—to know that after all their hard work finding the right vehicle, they won’t overpay. Because the auto industry is constantly drumbeating messages of “affordability,” “value,” and “low cost/cost to own”—pricing will continue to be a critical factor in purchase consideration.
Companies like Zappos (and Saturn, in its day) demonstrated the positive impact of great customer service on business and brand loyalty. However, research also continues to tell us that consumers are starting to avoid the brick-and-mortar experience (Maritz Research recently found that more than 10% of new car buyers opt to skip taking a test drive). This means marketers, auto manufacturers, and dealers will need to stay one step ahead of the game by offering outstanding customer service.
My advice? Dealers: Make it easier for the customers by embracing technology and placing a bigger emphasis on great customer service. That means engaging consumers wherever they want to interact—with informative content online, a digital campaign that spans desktop, tablet, mobile, search, and social, and a friendly atmosphere at the dealership. Customers: relax. You have all the information you need to make a sound decision. Car buying doesn’t have to be—and shouldn’t be—that complicated.
Now, who’s up for a quick spin in the Audi RS 5 to the golf course for a quick nine holes?
Nick Matarazzo is CEO of Jumpstart Automotive Group, an expert digital automotive marketing and advertising company and division of Hearst Magazines.