We now live in an age of information where mobile, web and data shape the fabric of everyday life. Picture this: in the next 60 seconds, 187 million emails will be sent, there will be 3.7 million Google searches and almost 1 million people will login to Facebook. In that same time approximately 188 used cars will be sold in Canada and the USA.
Put it all together and we’re swimming in oceans of data—and drowning from information overload.
To provide meaningful value, attract and delight customers while still turning a profit, automotive retailers need to consider lead generation and customer retention strategies which will increasingly integrate with digital and physical wholesale marketplaces.
Understanding the Market and Customer
While the auto industry is transforming as a whole, the Canadian used vehicle sales market is set to flourish. From 2016 to 2021, used vehicles on the road in Canada are expected to increase by 3.71 million units. Used vehicle retail sales are expected to reach 3.4 million by 2022—adding nearly half a million more sales per year since 2017.
However, the automotive consumer has evolved. In the last five years, physical visits to dealerships prior to purchase have decreased from five to one. This is due to approximately 95 per cent of retail buyers leveraging digital resources for information before setting foot into a business.
The Shift in the Balance of Power
Whether in retail or wholesale, the balance of power is shifting toward consumers as improved data and online offerings create virtual pressure and opportunities to instantly establish the best vendor with the best price. In fact, almost 77 per cent of consumers have chosen, recommended or paid more for a brand that provides a personalized service or experience.
These same studies reported that 89 per cent of executives believe the customer experience will be the primary mode of competition over the next five years.
Whether you’re a commercial seller, a dealer transacting with an auction or a retail customer transacting with a dealership, the fundamentals of the customer experience are similar. It’s important to remember that literally everything you do is relevant to establishing and influencing the customer experience from the first web search to the test drive and then financing—and everything in between. Providing a customer-obsessed service is not a responsibility to take lightly.
Best-in-class Wholesale Strategies
Within the many changes in the industry, there exists a shift which has been quietly gaining traction and is widely perceived as disruptive to the status quo. Companies are now providing a digital trade-in value for a vehicle to retail customers BEFORE they set foot at a dealership.
In today’s multi-channeled auto sales world, a best-in-class wholesale strategy will actually begin with a best-in-class retail strategy. Successfully providing an exceptional customer experience digitally and in person to retail customers will require even more transparency, accuracy and responsiveness than ever before.
The importance of partnering with companies that put you AND the retail customer first will become increasingly meaningful in providing a best-in-class automotive retail consumer experience, but where do you start?
Taking a Digital-First Approach
Almost 95 per cent of consumers will research dealerships, vehicles, people they will buy from and wholesale trade-in value online before they even show up on your floor. That’s why your lead generation and customer retention strategies should include a well planned and executed vehicle trade-in program that customers can easily navigate through.
The first step is putting your best foot forward digitally and getting the customer through the door. If you set the trade-in value low the odds of the retail customer actually coming are low. If you set the trade-in value high and then back-off from it when the vehicle and customer arrive (regardless of the reason), the odds of the retail customer staying are low. However, once they’re on your floor, it’s time to leverage the digital auction space for two reasons.
First let’s look at the customer perspective. While you already provided a guidebook reference, you’ll now be able to launch a real-time “live” appraisal for the trade-in thanks to a true wholesale auction marketplace right there in front of their eyes. This will either improve or support the trade-in value they received digitally and will increase the customer’s trust in you and in the deal.
With tools like TradeRev’s live appraisal service, in just 45-minutes thousands of bidders will show you exactly how much the vehicle is worth. This will allow you and your customer to have a transparent conversation around the value of their trade—it’s simple, fast, and delivers a great customer experience.
From your perspective, it doesn’t matter whether the vehicle is destined for your dealership’s inventory or if it’s marked for immediate digital sale. That’s because the vehicle was acquired for the exact market value, protecting you financially and reputationally.
Then Get Physical
The value of the brick and mortar auction infrastructure and services will actually continue to increase as the digital and online auction world evolves. It’s not about picking one or the other; the two go hand-in-hand. That’s because digital and online technologies accelerate, expand and significantly enhance the fundamentals of the brick and mortar auctions.
For instance, while we have a strong digital and physical auction through TradeRev and ADESA, we believe it’s the marriage of the two which makes us so strong. That’s because we’ll actually hand-off no-sales from TradeRev to ADESA, and vice versa, on your behalf, doing the heavy lifting for you. This is where having an end-to-end partner comes into play.
By adopting these approaches, you’ll provide a better customer experience by aligning yourself with today’s consumers who demand more transparency, accuracy and responsiveness. You’ll also benefit from better trade acquisition decisions—both financially and reputationally.
Steve Langdon, Vice President of Dealer Sales, TradeRev
Canadian Auto World
Published May 15, 2019
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