Brands and price trump dealership experience for Canadian car buyers
With this installment in Canadian auto dealer, Harris/Decima research project, we asked customers about what most influences their purchase decision.
When a customer walks into your showroom, more than ever these days they’re ready to buy. Closing the sale should be easier, but you need to work with what’s already there. It sounds obvious, but we get so lost in trying to understand motivations for buying, that we can often miss the bigger picture.
We all want to know what really drives the customer’s purchase decision. Many of the questions dealers submitted to this column earlier this year were related to this theme.
Studies that seek to determine what’s important in the vehicle buying decision can be long and complicated. While the purchase decision does involve many factors, we often try to cover them all and in doing so, miss some of the fundamentals.
One way of getting around this in a very realistic and simple way is to ask consumers to make a “trade-off” between a few basic factors in the purchase decision, by putting the factors in pairs and asking which one was or would be most important.
We did this with a representative sample of more than 500 Canadians who had either purchased or leased a new vehicle in the past five years, or plan to do so in the next two years. The four factors we asked them to choose between were:
- The reputation of the brand for quality;
- Past experience with the brand;
- The price or monthly payment; and
- The way they are treated at the dealership.
You can see from the chart how important the brand is. It also appears that the way the customer is treated is not really important. But that would be a misleading interpretation in the real world. It’s also more important to answer the question: “So what should I do about this information?”
What the numbers imply is that, when a customer enters your showroom, there is already a very strong predisposition towards the brand you carry — either from previous experience or from his or her perceptions of the brand.
The key is to recognise this, reinforce their perception and avoid spending time on an unnecessary part of closing the deal. By better understanding how strong this predisposition is, you can also get a sense of where the customer might stand on a hard factor such as price or monthly payment.
The lower ranking of “Treatment” should not be seen as an indication that, the stronger the customer’s predisposition towards the brand based on quality, the less important it is to treat her or him well.
On the contrary, if you can tell that the customer is sold on the brand’s quality, all the more reason to treat them well to help close the sale even more efficiently. Treat the customer badly and it all comes apart — in this market environment, the chances are they’ll move on to a competitor or, if you do close the sale, you won’t likely see them in your service department.
There are some important differences between customer groups when it comes to these priorities:
- As might be expected, older buyers are generally more focussed on reputation for quality than are younger buyers;
- Younger buyers are more strongly focussed on price;
- Previous experience with a brand is generally important with older males, but females also tend to place more importance on previous experience than merely accepting the reputation of the brand; and
- Treatment at the dealership is a stronger factor for females and older buyers.
The purchase decision is not always a simple one, but there are some fundamentals that, if taken into account as shown above, can result in a better close rate.
The information also reinforces two other factors: first, the perception of quality of the brand you represent is an extremely important asset, whose value must be recognised in the way you approach customers.
Secondly, the value of a repeat customer cannot be overstated. The traditional sales process steps and some of the questions employed in the process may not get at these fundamentals. In the words of Roger Penske: “This is a simple business — it’s people selling cars to people.”
Blindly following existing processes might get in the way of a more open and more successful interaction with a customer.
