What is the point of the car dealership?
I was snagged by an interesting report yesterday by gforces.co.uk, that while a year old, bought some considerable clarity to the argument for the real role of a car dealership for customers. I make the distinction (for customers specifically) recognising the other pressing operational issues that represent running a sales, service and distribution centre…
Many years ago a colleague came across a startling statistic about the falling number of visits we make to dealerships during the buying process. The figure (now somewhere around 1.5) seems to have become something of a touchstone, cited in almost every blog, paper and presentation I read.
Personally I’m rather wary of it (less than two visits? Is that really possible? Is that just retail sales? New and used? Private sales and business users? No test drive? No coming back with the family? You have the car delivered rather than collecting for a handover?) but more than that, worried about the effect that constantly repeating it is having on the quality of a visit to the showroom. I’ll explain.
Dig a little deeper, as http://www.buyacar.co.uk/ have (just last month), and another picture emerges. One that’s much, much more interesting:
“…a third of consumers visit three dealerships and nearly the same number (33.4%), four or more. The total percentage of those visiting at least three is 67%.”
And here’s the thing:
“dealerships remain the favourite source of information in the car buying journey for 70.7% of respondents. The next favourite source is online reviews (67.8%), proving more popular than online customer reviews (49.7%).”
In fact, according to JD Power,
“New-vehicle buyers who do a great deal of automotive Internet shopping also go to more dealerships to shop.”
If you own more than one franchise, or represent multiple-brands, you just had your chances multiplied.
So while the number of ‘visits’ is falling the danger is that in reading this, we create huge pressure to press the already wary prospect with our entire armoury of customer journey-mapped processes. The ‘sh*t-or-bust’ mentality is in danger of obscuring the need to think carefully about what the dealership can do best to help secure the sale. Rather than redouble the effort on the sales process, perhaps it’s time to actually step back and let the product have a little space to ‘sell itself’.
Sound like a stupid idea?
What Car? reports
“80% of new car buyers visited showrooms to undertake test drives.”
They go on to say that
“70% wanted to find out more about pricing and a similar proportion went along to inspect a car.”
Then just “34% of buyers visiting a dealer to gain advice or additional information about a car”, according to Experian.
gForces focus its fire on the process. “Many buyers still find it confusing and overly elongated, especially when many of them will have qualified themselves online in advance of a visit.”
The clue to the real point of a dealership is in the name we used to give them – showrooms. While that might not be an on-trend label, it’s a lot clearer that the brand-babble bandied around in a desperate attempt to avoid tackling the real challenge. That for all the reshaping the internet is doing to business models and methodologies, you can’t squeeze a test drive down the wires. Well, ok, with VR perhaps you can came, but life isn’t a video game and the only way to experience a car right now is to drive one.
One last thought. McKinsey ran some ideas past car buyers in 2013 around formats. Guess what? In the section around whether “Customers strongly desire new formats”, the resounding winner was ‘Test drive centres’.
Now, can I have a go?