Why don’t customers like buying cars?

July 31, 2023

OEMs demand it, customers expect it, and dealers want to deliver it: a great customer experience. We talked to dealers to find out how they are adapting.

Kate Latis, who began selling cars in 2020 with Maranello BMW in Vaughan, did extensive research online before she started working full-time and was shocked to learn how customers felt about buying a car.

“The overwhelmingly sad reality of it was that the average customer hates car shopping,” said Latis in an interview with Canadian auto dealer. “It’s like right up there with going to the dentist. They hate the experience. They dread it. Why would you hate shopping for a car? It’s so exciting. It should be a happy thing.”

Peter Khan, Senior Director of Research and Insights at CDK Global, said his company has asked customers about what was easy and what was hard in every step of the journey from entering the dealership and exiting with the car they wanted.

“We kind of know where the friction parts are in that journey and what they find enjoyable and easy,” said Khan. “When we break down the elements of that shopper journey, you have people saying it isn’t as easy, it isn’t as delightful, it isn’t the thing that is working well for them. So for dealers they need to think about how they do it better.

“The dealers we know that are successful are all about building trust and being very transparent.”

He said the introduction of digital retailing has provided benefits for both shoppers and dealers, because consumers can do most of the work at home rather than having to go to the dealership to do it all. He added salesperson behaviour can “really make or break” that experience.

Adil Ahamed, President/Chief Executive Officer of B.C.-based Destination Auto Group, said helping customers feel at ease begins with having the right culture and the right people in place.

“A lot of our focus has been on training, feedback with the managers, feedback with staff in terms of finding ways to improve that customer experience,” said Ahamed.

In 2018, the company did an internal branding exercise with a subset of staff and the results were subsequently rolled out to all of the staff, followed by a company slogan: “Every day we challenge the status quo of the traditional dealership model in order to do what’s right for our guests, our company, our partners, and each other.”

Ahamed said his company, which his father founded 40 years ago and retails Toyota, Honda and Mazda, loves what the traditional dealerships do in terms of a business. But he said he wants to grow Destination Auto Group in a sustainable way.

“The dealership business is basically a relationship business,” said Ahamed. “In the past where you could win and succeed on relationships alone. In today’s environment it’s got to be way more than that.

It’s not one single person’s relationship. It’s actually the manager’s relationship with the staff, the staff’s relationship with the customer, the customer’s relationship with the product, the product’s relationship with the staff. There’s almost a large web of relationships between all the various aspects of the dealership business.”

James Ricci, President of Roy Foss Automotive Group, said the evolution of digital retailing, which ramped up during COVID, forced a lot of dealerships and dealership groups to think of new, creative ways to sell cars to customers online.

“So the industry in general upped our game, increased the watermark,” said Ricci. “For us at Roy Foss, we tried a number of different things. We did complete online sales, we had embedded video chat platforms and did end-to-end sales online. As we moved through COVID, inventory levels went down, so there’s longer and longer wait times.”

Notwithstanding the research consumers do online, Ricci said 50-60 per cent of the time they come into a dealership with a specific vehicle in mind and switch to a different vehicle. He said part of that is education around options and equipment packages, pricing and looking at similar vehicles that make more sense based on what the current programs are.

“There’s still a lot of in-dealership that is happening,” said Ricci. “The online experience is not quite there yet…People want to touch and feel.”

He said it’s exclusively about transparency and added consumers want to feel like “they’ve won” following the whole transaction.

“That’s a big thing. That can’t be underestimated,” said Ricci. “There’s a perception (among customers) that (they’ll) get the best deal if (they) go into the dealership.”

When Latis meets prospective buyers, she looks at their driver’s license and has found that many people link their purchases to a specific date or milestone such as birthdays, anniversaries, graduations events and the like. She then personalizes the delivery with something inside or outside the car such as a bow, balloons, stuffed animals, a cake or a card.

“It’s a little bit of an extra touch to it,” said Latis. “Every delivery for me is like the customer’s journey. For salespeople, they may be selling cars (several times) per month, but for the average customer it’s once every five years, maybe once every 10 years.”

When it comes to servicing their vehicles, some people find that an extremely unpleasant experience because even if they are doing it at scheduled intervals, the dealership may be selling something they don’t want or need. Moreover, when the warranty extends they feel vulnerable.

“This is where dealerships lose customers because customers feel like they are being upsold,” said Khan. “You have to think about lifetime customer value. There’s good reasons for (consumers) to stay in dealerships, but the idea people are feeling they are being upsold for no good reason, that’s going to lead to defection.”

CDK Global recently launched an e-book called Five Service Features To Invest In Now. The book notes when it comes to transparent service pricing, 45 per cent of consumers want a guaranteed lowest price, a detailed invoice of all the fees, and real-time cost updates on vehicle repairs.

So is the industry doing everything it can to make the consumer experience more enjoyable?

“There’s definitely improvement, there’s a lot more professionalism, and one of the things that is helping this trend is consolidation,” said Khan. “The smaller groups are being merged into larger groups, and those larger groups are being run like a very efficient corporation that makes sure they are providing a really great customer experience because they know that’s how they keep customers and how they win new customers.”

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