Buying Cars Online – The New Customer Journey

Directing-traffic

Highlights

  • Most customers start their car-buying journey online, researching mileage, body types, road tax and safety ratings
  • Customers make, on average, only 1.5 visits to a dealership when purchasing a new car
  • Dealers are therefore changing the way they reach out to potential buyers, making the online service they offer more appealing

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Technology and clued-up customers are the driving force behind the transformation of the business of buying and selling cars.

The way customers buy cars has changed dramatically over the past few years, with technology playing a major role in how they buy their next car, and how dealerships seal the deal.

Gerard Toher, chief commercial officer at CarsIreland.ie, says most customers begin their search from the point of view of budget and appearance – and most of this initial research will be done online.

“The better your photos are, the more chance there is of [customers] clicking through,” he says. “The second is how those photos combine with pricing. Price will still trump most things on the initial search.

“Remember also that very few people will go past the first page of listings.”

Once they get past those two broad factors, their research becomes much more granular, says Toher. “Mileage, body types and colour are important, but there are now other things that customers can research online that they couldn’t do before – for example, road tax rate and NCAP [New Car Assessment Programme] safety ratings,” he says.

Recommended reading: Full speed ahead? Car sales in Ireland

Pull factors

It’s estimated that customers are currently making about 1.5 dealership visits per sale – half of the 2015 figure, which was three visits per sale. Toher puts this down to users becoming better informed and being able to find more information before they even enter a dealership.

“Customers are becoming incredibly knowledgeable about the car they’re buying long before they come into the dealership – and they can often know more than the salesperson does,” he says. “It’s hard to give an exact figure on how long people are spending looking online, but we know it’s huge – you can tell how much time people are spending there because of the subsequent drop in dealership visits.

 

“Customers are becoming incredibly knowledgeable about the car they’re buying long before they come into the dealership – and they can often know more than the salesperson does”

 

Gerard Toher, chief commercial officer, CarsIreland.ie

“A decade ago it would have been as many as 10 dealership visits to a sale. That shows just how dominant online has become. People spend huge amounts of time trawling the sites to choose exactly what they want – mostly without ever speaking to a dealership.”

Reaching out to customers

With the General Data Protection Regulation (GDPR) now enshrined in EU law, the issue of how dealers reach out to customers is highly topical.

“The trouble is, unless they’re making the first move to a purchase, customers don’t want to be contacted at all,” says Toher. “They might sign up to get an email alert, and that kind of automated contact is fine; but once they’ve decided to look elsewhere, the last thing they want is dealers getting in touch.”

Consequently, the challenge for dealers is to find ways of maintaining contact while not being intrusive. Is there a definitive answer?

‘It’s hard,” Toher acknowledges. “We see it as a funnel. The first thing is to make sure your own online presence is top class. Ensure there are multiple points of contact for customers to reach you when they want to.”

Many dealers have invested in chat facilities, with a real person at the other end available at all times, including evenings and at weekends. “After that, ensure the stock is attractive, but this means attractive online as well as on the forecourt,” says Toher.

Employing people purely to market the cars online is an option – they might never speak to an end-buyer but can create walk-around videos of cars, take attractive pictures and ensure they’re presented perfectly online.

“You’re limited in terms of how much you can reach out, so the key is that when someone does come into the dealership, absolutely make the most of that visit. Be very attentive to what they want, get follow-up details, personalise your communications and don’t push anything on the customer – invite them in, in ways that are attractive, so they’ll come to you.”

Expand your scope

With online sales opening up a world of opportunities, geographical location no longer plays such a major part in selling.

“The way things have moved online has made car sales a national market – it’s no longer true to say that people will only buy locally,” says Toher. “People will travel all over the country to get the right car. It’s worth making the effort as a small, rural dealer to market your cars effectively online because people will come to you – as long as the golden rules are still followed of price competitiveness and attractive online pictures.’

The exceptions, Toher asserts, are for commonly available cars. “They won’t travel for a five-year-old VW Passat or a similar Nissan or Renault. But if you have a high-spec, low-mileage or unusual car, market yourself nationally – you’ll find a buyer.”

With digital channels becoming increasingly important to consumers, Toher predicts visits to dealerships will fall even further.

“We’re going to see online becoming dominant to the exclusion of dealership visits altogether,” he says.

“You’ll be buying online and then the car will be delivered to you shortly after.”

But dealerships are aware of this – and they’re responding to the trends in absolutely the right ways. “No one is sitting there waiting for the customer to come in – they’re focusing their efforts on online marketing, and indeed, budget is being diverted away from more traditional advertising.”

The move online also means that when you do get a customer coming into the dealership, “they tend to mean business”. Toher confirms: “They don’t waste time coming in just to think about a car – they know they want to buy.”

 

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