Towards the end of 2020, TRADER launched a virtual edition of its annual Carology event that explored marketplace trends, consumer behaviours, technology’s influence on car-buying, and the car-buying journey.
The Science of Selling Cars was hosted by Ian MacDonald, Chief Marketing Officer at TRADER, who was joined by several speakers — including one that offered an intriguing look at hacks that dealers can use to attract, handle, and close sales opportunities with first-time car buyers.
“Are they that different? Should you treat them any different? How do you close them? Maybe they are a bit more nervous than normal car buyers,” said MacDonald, before handing over the virtual microphone to Lilian Lau, Vice President of Marketing at TRADER.
For her presentation, Lau pulled data from two 2020 autoTRADER.ca surveys to gather insights on these consumers and how they shop. To be clear, these potential customers are under 30 years old (the median age is 27), with a lower household income ($30,000) compared to experienced car buyers, and they are employed part-time or are students.
“Full-time — they’re more budget conscious,” said Lau. “As a result of those two factors, they are more likely generally to purchase a pre-owned vehicle.”
“It’s really important to tailor your interactions with these buyers and appeal to their sense of self in order to help handle these customers and then eventually close that deal.” — Lilian Lau, Vice President of Marketing at TRADER
Based on the data presented, these consumers are also twice as likely to rely on family during their car-buying journey, 43 per cent more likely to speak to friends about it, and 15 per cent more likely to review online videos. They are less likely to use dealership websites or even visit the store in-person, when compared to an experienced car buyer — but are equally as likely to reply on automotive marketplaces and OEM websites.
“They tend to rely more heavily on family and friends without their own personal experience in buying a car and being new to the process,” said Lau. “They are going to rely on others that might have already gone through that experience before. So there’s more influence that they have when it comes to friends and family, while they spend a little bit more time researching upfront.”
What they want is to feel confident in their car-buying process and to not be intimidated by the sales representative — or anyone at the dealership, for that matter. They want simplicity in the negotiation process, more than experienced buyers, transparency in the price they are meant to pay for the vehicle, and confidence in that they are getting the best deal possible.
Completing most of the process online and working through a simplified car-buying journey is also important.
According to Lau, “being younger, more exposed to the digital space over time, they’re more willing to use online tools throughout the purchase process,” she said. “And that will be important as we look at the ways that you would attract and influence first-time car buyers in the future.”
The three main areas she suggested dealers focus on include:
- First-time car buyers are willing to visit many dealerships, which means dealers need to ensure they are among those visited stores. They can do this by making offers and promotions front and centre, leveraging transparent pricing tools to boost confidence in the sale, and managing and monitoring dealership reviews online. Highlight positive reviews and respond to the negative ones.
- Handle consumers with care and make car buying fun, engaging and exciting. Because they are less certain about the car they want and the processes to purchase it, they can still change their mind, so put their interest first and they may buy that new vehicle they were eyeing, spend more on relevant features, or they may select a different model.
- Dealers may need to “hold their hand” while making them feel confident and comfortable enough so they can close the sale. This can be done by guiding the consumer throughout the process, offering them online tools, ensuring the transition from online to in-store is seamless, and building a relationship with them — so whoever they dealt with online should be the same person in-store.
“It’s really important to tailor your interactions with these buyers and appeal to their sense of self in order to help handle these customers and then eventually close that deal,” said Lau.
In a nutshell, the content boils down to two simple ingredients that dealers will need to consider infusing in the car-buying journey this year — whether that means in-dealership or digital — and that is simplicity and transparency.
Other speakers during the session included Baris Akyurek, Director of Marketing Intelligence at TRADER, who offered an overview of trends observed from the autoTRADER.ca marketplace; Nick King, Director of Insight & Market Research at AutoTrader UK; and Chris Schulthies, National Trainer at Wye Management who discussed three key steps dealers can consider to start the year off on the right foot.
