First survey of Canadian car buyers reveals key triggers affecting purchase impressions
Attention Readers: This new feature Canadian auto dealer is introducing deserves your full attention. Working with one of Canada’s leading research firms, we are asking your customers for answers to direct questions dealers most need to know, but can’t easily quantify. We will be publishing the results and analysis. We’ve also invited dealers to submit their own questions and we’ll be asking the best of the bunch to Canadian car buyers. Stay tuned!
In December 2011, Canadian auto dealer and Harris/Decima Research asked more than 550 new car prospects what they wanted dealers to do to make their buying experiences better and what would encourage them to recommend their dealership to others.
The sample answering the question was part of a larger sample of more than 2,000 Canadians, and represents the proportion who said they plan to purchase or lease a new vehicle in the next 24 months. (For the forecasters, the proportion of “warm” prospects out there is 26 per cent of the population.)
Transparency is key
What they told us suggests that the franchise that can introduce more transparency and simplicity in the pricing area will have an advantage in the marketplace. While the other aspects — less pressure to buy quickly, salesperson knowledge and information about maintenance costs — received fewer votes (this was a pick-one-only question), they are by no means unimportant. More about that later.
What the results suggest is that the way we go about presenting pricing information to prospective customers is a major source of irritation and is likely the single most important reason why the new car buying experience is one that a lot of people say they dread.
In an age where consumers have more access to information and readily share information and opinions via social media, the traditional model of presenting price in the auto retailing sector is outdated.
One-price selling (à la Saturn) is not the answer. Consumers are realistic enough to realize that things just aren’t that simple and that buying a new vehicle is inevitably a contest between them and the dealership to meet at a middle point. Their problem is how to get to the middle point.
They feel that the lack of transparency and over-complicated scenarios means they end up railroaded into paying more — either at the dealership or on their monthly payments. It is time that pricing and negotiation practices caught up with the real world where consumers expect more transparency. From pricing claims in advertising, to vehicle pricing and configuration tools on the web, to negotiation practices in the dealership — we need to break new ground.
Take a look at the retail advertising in the newspapers. Can the average consumer get any clear idea of what they will actually pay when the keys to the new vehicle are handed over? Most consumers are using websites to research, configure and price vehicles. Is there any consistency between that information and the final price they pay? No wonder resentment builds among buyers.
Consumers are often over-optimistic on the value of their trade, but, apart from walking away from a deal, it’s one of their only bargaining chips. We can’t continue to say that “it’s a complex negotiation with multiple factors coming into play” or that “this is the way we do it.” If we do, we’ll continue to see consumers that view dealers as people “out to get them.” This is an issue that both manufacturers and dealers must address and one that there needs to be much more consistency between the messages coming from each.
Back to the questions of pressure, knowledgeable sales staff and service costs. These are all things that have either been talked about or not talked about for years. But they are common sense. A customer who feels pressured is going to harbour resentment and this will come out in lack of service loyalty, lack of advocacy and likely a lost customer for the next purchase.
Since customers often have far more information than do sales staff these days, salespeople who are not knowledgeable or who have to be corrected will leave a bad impression. And when you consider that car owners spend up to seven years with a vehicle, smart dealers will talk to them about maintenance and maintenance costs (if they want to capture the service and parts revenue).
But the main story is pricing, and the franchise that gets it right will get more recommendations and generate a lot of positive buzz.
