A recent study, hosted on the Angus Reid Forum on behalf of AutoTRADER.ca, revealed that one in three consumers is apparently unsatisfied with their last vehicle purchase. As a publication that covers the automotive retailing industry, Canadian auto dealer was naturally very curious to find out more about this study, as were many of our readers. Consequently, we arranged an interview with Ian MacDonald, Director of Marketing for AutoTRADER.ca. We asked him about the findings of the study, what they really mean and what auto retailers can take away from them.
HE: What were some of the key factors that actually prompted this study?
IM: At AutoTRADER, we are all about helping people to buy and sell new and used vehicles — that’s essentially our role — thinking about what we need to do to make the process better and finding out what consumers’ needs really are. In this case, what we wanted to do was to start looking at the actual purchase experience. We’ve been looking at marketplace sites like ours and what we discovered was that although they can be incredibly useful, not everybody was visiting such sites as you might expect. Some consumers were buying based on advice from family and friends and didn’t take the time to use the power of the Internet to compare options during their research. What we wanted to do was to see if there was any dissatisfaction with the purchases that people make and what are some of the things they regret or suffer from when it comes to buyers’ remorse.
HE: It is noted in the study that 66 per cent of Canadians were actually happy with their experience, correct?
Ian MacDonald
IM: That is definitely true and it’s very encouraging. When it came to the study itself however, we were more interested in digging into that remaining third and finding out why they weren’t happy and what in particular they were unhappy about. It wasn’t so much a study on people’s experiences with dealerships but more about the way you went about things for people that weren’t so happy.
HE: For those that were unhappy (33 per cent) the original news release said that the people within that group wished they had done more “due diligence” when shopping for a vehicle. Were there some factors that contributed more towards their overall dissatisfaction than others?
IM: There were two main areas we discovered where consumers were having regrets — price paid and the vehicle’s suitability to their lifestyle once into a few months of ownership. In third place was the vehicle failing to meet consumers’ expectations of what they thought it would be — for example it didn’t prove as fuel efficient as they thought it would. Auto retailing is a competitive industry so you’d expect consumers to get good deals, however if you don’t take the time to do research and really get a sense of what a fair price for a vehicle should be, you’re likely to be susceptible to over-paying or not being really sure of what a fair price is. At the end of the day auto retailing is a business and dealers need margins. What we’re suggesting is that by doing more research and looking at sites like AutoTRADER.ca where there are lots of vehicles listed side-by-side you will have a better idea of what to pay based on price. The fact that these consumers really don’t know if they overpaid but just have this lingering feeling they did, does present concerns.
HE: Did the level of “unhappiness” vary much between provinces? For example, we see that according to the study, consumers in Alberta and B.C. appeared to do more research online — did that have an impact on the overall findings?
IM: Consumers in both those provinces (Alberta and B.C.) were those who claimed they were most likely to have done more “due diligence.” Whether they actually had performed more research or less wasn’t described. Simply put, they stated whether they felt they had done enough. There were some differences in the level of unhappiness between provinces — those who had done more research on the whole appeared less unsatisfied than those who hadn’t, but there wasn’t a huge variance.
HE: Did the level of unhappiness vary between different age groups?
IM: In a word, yes. It depended on the particular question asked in the study but in general what we observed was that older age groups (those 35 and older) seemed to feel less buyer’s remorse, while younger buyers said they were more likely to re-prioritize what they were looking for. When you’re younger, your heart can rule your head a bit and certainly buying a car is an emotional experience for most. Those who are older tend to have bought and sold more vehicles and have learned from experience, which is likely why they tend to feel less remorse.
HE: In reference to the 31 per cent surveyed that said they “overpaid” for a vehicle, was there any variances between buying new and used?
IM: In the study, we didn’t delineate between those who purchased new and those who purchased used. Based on my own observations and industry experience, it is likely more probable that people are dissatisfied with buying used, simply because there are more variables involved. In our own studies, we’ve discovered that some people can be considerably off target when it comes to placing a value on their own vehicles and therefore are often less certain of what a fair price actually is.
HE: Given the findings of the study and the emphasis on customer satisfaction in auto retailing, how do you think dealers can really have an impact on the situation?
IM: Getting back to the results, on the positive side, two thirds of those surveyed said they were happy with their purchase and that’s a good thing. Will we ever get to a situation where 100 per cent of those who bought a car were completely satisfied? Probably unlikely, because some of the responsibility lies with the consumer themselves. If they haven’t done the research or let their emotions overrun their rational thought — i.e they are intent on purchasing a vehicle that isn’t really suitable for their needs, there isn’t a lot a dealer can do. I think where dealers can make a big difference is by being transparent on pricing and talking to consumers, making them understand what they’re buying and helping them assess the pros and cons of different vehicles and options, to find a result that’s suitable for them. For dealers, being able to offer that additional insight the consumer can’t find online, such as during the test drive experience, adds real value and that is what will help result in a happy customer. Having happy customers is especially important in the auto industry, because dealers want repeat business and reputation is everything. Reviews and reputation have a huge influence on where people choose to shop and happy customers are crucial to ensuring ongoing profitability.
