Consumer Confusion and Lead Response - How do you handle?

[ryan.leslie]

I just finished skimming a "Pro Carvana" thread on LinkedIn written by a gentleman that was not affiliated with the industry. His perspective was purely as a consumer. From the original post and the comments to follow, a few things jumped out at me.

1. Consumers still dislike the process. There have been studies on this, so not really a surprise.
   1. Many commenters expressed that they really didn't enjoy "going in" to buy a car. I'm confident that this is a process complaint not a physical location complaint.
2. Consumers have no idea how thin margins really are in this industry at present.
   1. This gentlemen that purchased his car from Carvana was proud that he'd avoided the 30% markup at the dealer. 30%
3. Consumers think they want a "direct to consumer relationship" with the factory ala Tesla, but some of the things they complain the loudest about are OEM mandates of dealers.
   1. In this case, the consumer was getting crushed by autoresponders "to stop the clock" from every dealer he contacted with an invitation to "come on in for the best price." He claimed to have responded with a "do better" message only to receive the exact same reply.

I know "Digital Retailing" is today's hot buzzword and I agree that there is consumer interest in some progressive markets and demographics, but not every consumer, or dealer for that matter, is ready for that. In the meantime, I think dealers really need to consider how they are going to differentiate themselves in lead response.

If it is true that you sell the vehicle at least three times in a transaction; once on your website or in a marketplace to get the "lead," once in person on the test drive, and once in the finance office, then you can't afford to squander that first sale with a poorly crafted lead response. I don't know what the right answer here is, just making an observation for discussion.

How do you grasp the hand of the "handraiser" at lead response and lead them through the purchase process?

 

[john.quinn]

I don't want to make it sound simple, or over-simplify the answer, but the answer is and has been since the beginning: give the shopper more than what they're asking. Forget the old game.

I believe the best-in-class has moved-on, although I do imagine the process I'll describe briefly is probably still a vast improvement for many.

I am getting old, so this was a long time ago, but when we received leads, we would NOT send them a price -- we would actually send them FOUR prices: the vehicle in-stock that most-closely matched their request, a trim level up, a trim level down, and a CPO unit. We created a "table" template with auto-fill tags (as much as our CRM would allow) and filled in the blanks.

The results were staggering -- long story short, we blew our customer's minds. Psychologically, we opened the doors for the customer: we had nothing to hide, we delivered a ridiculously valuable response, we provided the appearance of transparency. On the business side, by providing more than a simple price on a car, we moved the focus away from price and more toward experience. Long story short, we won.

It wasn't simple: this was over 1000 leads a month! It was work. But it worked.

Sooo... my advice? Someone raises their hand, you fill it up

 

[Alex Snyder]

1. Consumers still dislike the process. There have been studies on this, so not really a surprise.
   1. Many commenters expressed that they really didn't enjoy "going in" to buy a car. I'm confident that this is a process complaint not a physical location complaint.
2. Consumers have no idea how thin margins really are in this industry at present.
   1. This gentlemen that purchased his car from Carvana was proud that he'd avoided the 30% markup at the dealer. 30%
3. Consumers think they want a "direct to consumer relationship" with the factory ala Tesla, but some of the things they complain the loudest about are OEM mandates of dealers.
   1. In this case, the consumer was getting crushed by autoresponders "to stop the clock" from every dealer he contacted with an invitation to "come on in for the best price." He claimed to have responded with a "do better" message only to receive the exact same reply.

It is truly astonishing to dive into the perspective of a consumer in the car-buying process. It took becoming a customer to realize what it is like to be a customer after working in a dealership most of my life.

I knew customers could go from hot to cold on a salesperson, but never appreciated the little things that could make it happen. A condescending tone is a biggie. Trying to push something in stock instead of listening to needs is one I hear from friends and have experienced myself. Not giving numbers without me there - that's a GIGANTIC "fuck you." When sharing numbers (payments especially) and only presenting a worksheet via PDF or screenshot it is incredibly confusing. I have walked a number of "pissed-off" friends back into reality because the dealer gave no explanation as to what the payments included and only gave a single payment - you're welcome for that dealers on Route 7 in Vermont.

Dealers, please keep in mind that if your sales staff mostly gets mini-deals you do not have a gifted sales staff. Many are oblivious to appreciating the learned lessons your experienced/gifted managers know. If you aren't helping them understand what can turn a customer off your people are going to turn people off. If your managers are not going to help, then you need to make sure the things you present to a customer are easy to understand.

I know "Digital Retailing" is today's hot buzzword

Online payment presentations are screwing people up - ROYALLY! One of my business partners tried to help his mother buy a Mercedes-Benz. He did as much as he could online only to discover Mercedes own website did not show all the leasing options in their payment calculator. On top of that, the payment they showed was $1,200 a month for a 10K miles per year lease without a way to calculate $0 down.

Moving over to one of the largest groups on the planet's biggest MB websites, he was able to get the payment down to $700 a month with the option to do 7.5K miles per year. But the dealer's "Digital Retailing" solution wouldn't allow him to do a true $0 down lease. No taxes included.

He finally got tired of all the different online payment calculators (especially after the dealer told him their own website was wrong) and went into the store. True $0 down lease ended up being a $650 per month payment at 7.5K miles per year with taxes capitalized.

The online tools customers are using are off-putting. The payments are wrong and the taxes aren't included. The showroom floors also haven't bought into some of these tools either.

At the end of the day online shopping experiences leave me:

1. Wondering about these OEM websites sending customers to other brands because their payments shown are too high?
2. How many customers can actually complete a Digital Retailing process?
3. How many dealership website payment calculators also turn people off because they don't show alternative payment possibilities (leases) or tie true rates to anything whatsoever?

How do you grasp the hand of the "handraiser" at lead response and lead them through the purchase process?

Options. As Quinn said, you give them lots and lots of options. Beat them to the punch by being upfront and open with lots and lots of payment options.

 

[Alexander Lau]

I'm a consumer and I hate Carvana, so I do agree with the LI guy. If you're too lazy to take the time (and that's what it is pure and utter laziness, especially with the millennials) to research and go into a dealer, after viewing vehicle(s) online, well that's on you. It's not that hard, have some patience for shit sake. Maybe it does take a day or two, so what!? It's a major purchase, such is life.

 

[AWNick]

Call me the devil if you will, but the last time I bought a car (about a month ago) I almost went through Carvana.

Between dealers giving me the run-around, lying through their teeth, wasting tons of time, trying to force me to buy addons, and being downright awful to deal with, I was willing to pay more to not have to deal with them any longer.

Times are changing. I'm not just referring to technological changes. I think the younger generation of consumers have expectations for what a customer experience should be like and most car dealerships aren't meeting them - not even close.

 

[Alex Snyder]

Between dealers ...lying through their teeth... I was willing to pay more to not have to deal with them any longer.

What I have found nearly 100% of the time, in helping friends buy cars, is that every single friend thinks they're being lied to. And in every single case that has not been happening. The dealer is explaining things in a way that only makes sense to the dealer.

Dealers don't speak customer. That is the crux of the entire issue.

 

[Alexander Lau]

What I have found nearly 100% of the time in helping friends buy cars is that every single friend thinks they're being lied to. And in every single case that has not been happening. The dealer is explaining things in a way that only makes sense to the dealer.

Dealers don't speak customer. That is the crux of the entire issue.

Very well stated and that is the problem across the board, including the marketing vendors that walk into dealerships, they don't speak dealer. While we sit around and wonder why expectations are constantly unable to be met. It all comes down to miscommunication.

 

[john.quinn]

It’s tough to hear “Good news, your car is worth $2500!” when you (the consumer) just “know” it’s worth $5000.

The dealer HAS to be lying; the consumer can’t be wrong.

And so the variably poor buyer/seller relationship continues... until the consumer accidentally bumps into someone who can communicate (who, not-so-coincidentally, is often the third person to report the trade is worth $2500, while dealer #1 retains his “liar” label, because the consumer still wasn’t wrong.)

 

[AWNick]

What I have found nearly 100% of the time, in helping friends buy cars, is that every single friend thinks they're being lied to. And in every single case that has not been happening. The dealer is explaining things in a way that only makes sense to the dealer.

Dealers don't speak customer. That is the crux of the entire issue.

We were told many vehicles were in stock before we got there. "I just touched the car," he'd say while on the phone with me - 30 minutes before I got to the dealership. Drive 30 minutes and the car doesn't exist.

We were told that we were required to pay an extra $1,500 as an ADDON for the vehicle to be Honda CPO (even though the vehicle was already CPO and priced appropriately). Honda compliance won't like that one.

We were told when they couldn't reach the price we wanted that we should lease and that leasing was the smartest option. In an attempt to convince us, he told us that 90% of new Hondas are leased.


I worked for 5 years at a dealer before my 4 years in a vendor role. While I don't have decades of experience, I know what goes on at dealers. There are still a lot of shady dealers out there. I am very close with someone who owns 2 big franchised car dealerships, and I hear the stories first hand.

I also understand that there are great dealerships out there. I bought a car from one last year. They were straight forward, honest, and very easy to work with. Dealt with another one this year that was terrific, even though I didn't end up getting a car from them.