Barb Edson

Busting the Top Five Myths About the American Car Dealer

gaillardc — Mon, 29 Jan 2024 19:08:41 +0000

Busting the Top Five Myths About the American Car Dealer gaillardc Mon, 01/29/2024 - 13:08

When you live and breathe the industry you work in, you tend to get a little protective of your colleagues and customers from an outside world that simply misunderstands what you do, or even why you exist.

This has definitely been true during my time in automotive retail. It’s an industry that from the outside might seem antiquated but, as we know from the inside, is a vibrant, cutting-edge ecosystem that's moving at light speed.

And as electric vehicles (EVs) and digital sales trend as hot topics, there are some fundamental aspects of the American car dealer that many people may not realize. Read on as we bust five of the biggest myths.

1. Shoppers Are Abandoning the Car Dealership

Car shoppers continue to flock to dealerships, even as the mainstream press, fueled by only a few direct-to-consumer success stories, says otherwise. Despite these few exceptions, the American consumer still prefers the brick-and-mortar dealership experience. The CDK annual Ease of Purchase survey revealed that 70% of customers relied on their local auto retailers to complete the entire car buying journey at the dealership. This preference is strongest among first-time buyers. On average, less than 2% of those surveyed bought a car fully online. In an upcoming study on EV ownership, even half of Tesla buyers said they bought their car entirely at a “dealership.”

2. Consumers Don’t Want to Use Dealership Service

A growing number of owners who seek vehicle repair and maintenance work prefer auto dealership Service departments over other repair facilities. That’s according to a recent CDK survey of over 2,000 service shoppers. It found 43% of consumers prefer dealership Service centers, a two-percentage-point increase from 2022 and nearly 10 percentage points ahead of independent repair facilities.

Dealerships enjoy a reputation for doing quality service work — a reason for their popularity. Nearly half (47%) of service shoppers cited factory-trained technicians as a major reason to visit the dealership Service department, while 38% appreciated that original equipment manufacturer (OEM) parts were on hand.

Dealer Service departments are also cited as preferred because of their existing relationships with customers. The survey indicated 52% of service shoppers go to a dealership because its service personnel know them and their vehicle the best.

Yes, dealerships need to continue to combat the perception that their services are more expensive, and more need to add critical digital features such as online appointment scheduling and repair estimate approvals. But there are many reasons service shoppers go to the dealer more often than other options.

3. Shoppers Don’t Want to Experience the Car in Person

Inventory shortages during the pandemic led many shoppers to order vehicles sight unseen directly from factories. Now that inventory is back, we’re seeing that trend slowly reverse course. The Ease of Purchase survey backs up this assertion. Ordering cars from the factory declined steadily with 28% of shoppers in June 2022, dropping to 18% in recent months, with the average falling near 21%.

The test drive also remains a vital part of the car buying process and is generally the final factor in shoppers making their decision. And this is even more true for EV buyers with recent CDK data showing over 80% of people who bought an EV test-drove one and many stated that’s when they “fell in love” with this new type of powertrain. Non-Tesla owners were swayed by the test drive even more than Tesla owners too.

In addition, nearly 43% of consumers visited two dealerships when shopping for a vehicle with 47% seeking guidance from an expert before deciding on their purchase. Even as technology streamlines the buying process, shoppers still want to see, touch and test-drive a car before signing on the dotted line, and they’re doing it at car dealerships.

4. Car Buying Is A Pain in the A …

Sometimes it seems like every story you hear about a friend or acquaintance’s car purchase is overwhelmingly negative. CDK wanted to find out if the data backed up that seemingly irrefutable truth.

That’s why the Ease of Purchase Scorecard’s main metric is a straightforward question, “Was it easy to buy your car?” And the answer “yes” has hovered over 80% for the 18 months since we started tracking it. That simple question has now been asked to thousands of car buyers and while they may not talk your ear off about an easy purchase, they certainly click that answer when asked.

For some time, while supply was constrained, simply finding the car a shopper wanted was difficult but that, too, has reversed with the most recent Ease of Purchase data from December showing 73% of buyers finding it easy to secure the exact model they had in mind.

The financial aspects of the deal do remain a sore spot, but no one likes to pay their utility bills either. Only 58% of those polled found it easy to agree to a final price and just 53% said it was easy to land on the trade-in value for their former vehicle. Programs around transparent pricing, and especially speeding up the overall shopping process, would help move these numbers higher.

5. EVs Will Be the End of the Dealer

The electric revolution is complex and often confusing, but after years of EV penetration taking hold, the end of the dealer is nowhere in sight. In fact, consumer confusion over federal tax incentives — along with the benefits, costs and performance of EVs — makes dealerships even more important as a source of knowledge for overwhelmed EV shoppers.

In our EV Confusions Carries On study, CDK asked approximately 1,200 new car shoppers who they trust to clear up confusion surrounding EV incentives. Nearly nine out of 10 (89%) wanted the salesperson at the dealership to explain how to claim tax incentives. They also want the dealer to help them decide if an EV is the right purchase for them. Nearly three out of four (73%) of hybrid shoppers and 59% of gas shoppers stating the loan of an EV from a dealership for a day would help them understand the benefits.

Dealers themselves think that EVs will be a help and not a hinderance to their Service department too. Nearly four out of five, 79%, Service leaders believe their overall revenue will increase in the next two years as more EVs come in for repairs and maintenance.

Barb Edson

Product/Topics

Front Office

Talking About a Different EV Bubble

gaillardc — Tue, 12 Sep 2023 12:01:38 +0000

Talking About a Different EV Bubble gaillardc Tue, 09/12/2023 - 07:01

The elevation of electric vehicles (EVs) to the top of the automotive food chain has been taking its time. On some sides, it seems like the inevitable is already here while on others, we still seem far away. Some say that we’re in an EV bubble that may lead to a major bump in adoption.

That’s why CDK Global spends so much time researching this issue, and in our latest study EV Confusion Carries On, our team uncovered that not only are gas and hybrid car shoppers unsure about the benefits of EVs but even those specifically shopping for EVs are missing the mark.

One of the most interesting findings, in my opinion, was just how insulated each type of shopper was in their own vehicle world. While it wasn’t a surprise that 84% of EV shoppers knew a friend or family member who owned an EV, that number dropped to 54% for hybrid shoppers and was just 37% for gasoline-powered car shoppers.

This is possibly the key factor in EV adoption as 82% of these EV shoppers said friends and family members influenced their purchase decision.

Let that sink in for a minute and then go back to those other two groups of shoppers.

When I heard just how isolated gas vehicle shoppers are from people with different driving experiences, it reminded me of the country’s polarized political climate. Or to take it to less of a hot topic: sports fans. If you don’t know many golfers, you’re probably less likely to play golf or tennis or pickleball. This may explain the pickleball phenomenon.

Also, these siloed drivers aren’t all in the states you think. Yes, there are far fewer EVs registered in Montana (3,000) than California (903,000) but even in one of the most populated states of Pennsylvania, there are only 47,000 EVs registered. That means 0.4% of the population owns an EV versus 2.3% of Californians. And Pennsylvania is slightly ahead of Michigan where the domestic auto industry is centered and determined to bring EVs to the masses.

The dealer has always been a key fixture in whatever community they’re based whether that’s a mountain town in Montana or right outside Pittsburgh or Philadelphia. And as our new EV study shows, the dealer is where these siloed shoppers could get their first hands-on exposure. A sales rep might not replace that friend or family member in terms of influence, but they’ll have keys to an EV at hand. They’ll know the range, the benefits, the maintenance schedules and, of course, the cost.

If EV adoption is the goal, the American car dealer is going to be the one to burst that bubble.

Barb Edson

Product/Topics

Front Office

Auto Shows Deliver a Vital Hands-On Shopping Experience

sufiyan — Thu, 02 Jun 2022 17:15:01 +0000

Auto Shows Deliver a Vital Hands-On Shopping Experience sufiyan Thu, 06/02/2022 - 12:15

Automakers are building some of their most exciting models in decades. Whether they are tough off-roaders, capable trucks, sporty coupes or electric vehicles, there’s something to match any car shopper’s needs and wants. Would-be buyers are just not always able to see these terrific machines in the flesh at the dealership, as they’re being sold at unprecedented speed.

That’s keeping shoppers at different points of the funnel away from the dealership to simply experience the car.

According to Peter Welch, National Automobile Dealers Association (NADA) president and CEO, the average customer in 2005 visited a dealership 6.1 times before buying a new vehicle.

Now that number has fallen to only 2.4 visits.

Luckily, the auto show circuit has returned almost in full to help those shoppers see and — more importantly — sit in the cars they’ve been reading about on Twitter and Facebook.

It started with the Chicago Auto Show. The New York International Auto Show successfully returned in April and generated national media buzz. And now we’ve got a firm date for the return of the North American International Auto Show this September.

These shows, along with the dozens of regional events in Miami, Washington D.C. and more, are a major element in the car-buying cycle. More than ever, car shows can provide the interactive experience consumers want.

Show and Tell

With inventory being low nationwide, it is often difficult for some potential buyers to get an up-close view of the car they want.

“We bought my new truck sight unseen. The reviews were good online and I’m happy with my purchase. But I would have loved to have actually sat in the car and held the steering wheel before I bought it. It felt a little risky to me,” explained Chris Wolf, who recently purchased a new vehicle in Orlando, Florida.

An auto show offers the perfect solution for someone who can’t find a particular vehicle on the lot. And as they have done in the past, these events give buyers the opportunity to evaluate several different brands at the same location.

The Twin Cities Auto Show in May gave consumers the chance to compare more than 600 vehicles side by side.

Attendees can fully experience vehicles as they sit down in the seats, grab the steering wheel, push buttons and get the overall general feel for how their new vehicle will suit them. At some shows there are even test tracks where shoppers can get behind the wheel or in the passenger seat.

Low Pressure to Purchase

The auto show is also the place for low-pressure shopping.

According to Dr. Richard Waterman, a professor at the University of Pennsylvania’s Wharton School, auto show attendees are twice as likely to make a new vehicle purchase within a year of attending the show than the general population.

Foresight Research indicated that auto show attendees cited show attendance as more influential on their purchase decision than digital advertising, direct marketing or event sponsorship.

By drawing in customers with this low-pressure approach, dealers can once again focus on the top of the sales funnel by gathering intel on which vehicles are at the top of shopping lists and why.

The Big Reveal

The pandemic accelerated automakers into debuting their newest models virtually and apart from the big auto shows. But while fewer models are debuting at the show, it’s still the first opportunity for most people to see a new model in person. You still see shoppers taking pictures of these cars all around the show floor.

A brand-new model is also an opportunity for automakers to woo customers away from the competition. 21% of buyers who attended an auto show purchased a vehicle brand that they had not previously considered.

In fact, according to the Foresight Research findings, 90% of people who were in the market for a car and attended a show said the show influenced the type of car they purchased.

Strap on Those Sneakers

As we approach the new model year, it’s a terrific opportunity for dealers to take another look at how they can utilize their hometown show. Never before have auto shows been so important for displaying new models to the masses — and thankfully, they're back.

Dealers should put themselves in the comfy shoes of the show-goer as they navigate booth after booth. What will resonate with them and what will help them make the next step to purchase? Will you promote the show more than you have in the past?

It’s a terrific time to ask these questions and to think differently about how auto shows fit in with your approach to selling.

Barb Edson

Trade in Your Marketing Agenda

sufiyan — Tue, 08 Feb 2022 17:27:23 +0000

Trade in Your Marketing Agenda sufiyan Tue, 02/08/2022 - 11:27

Today’s communication opportunities coupled with expectations of at-your-fingertips convenience mean consumers are demanding more from every company. In this world, traditional marketing practices are all but out the window. No longer can we simply push out our message across every channel imaginable.

We need to switch from broadcasting our products’ value to creating a valuable connection with customers to capture their trust in our products.

Reflect and Refresh With One Strong Voice

Recently, CDK Global refreshed the way we present ourselves to the industry.

We knew it was time to take a deeper dive into how we serve the automotive industry and how we view our own solutions from the eyes of the people who use them every day. This self-reflection allows us to better meet our customers where and how they need us most.

It was clear after a number of acquisitions that it was critically important for CDK to have a unified voice.

We have always delivered top-tier products and insights, and recently a number of well-publicized acquisitions were brought under our brand umbrella. However, our customers weren’t recognizing these new entities were all part of the same CDK family.

It became clear that dealers and manufacturers didn’t necessarily care that we own Elead or Roadster. More importantly, they cared what Elead and Roadster could do for them. We want to keep the equity in those brand names, but we also want to make sure the external market understands that there's value in being part of this interconnected world of CDK.

In the end, a rebrand allowed us to clarify our communications through a simple naming restructure: CDK Roadster, CDK Elead, CDK Neuron. This highlights how CDK products provide a cohesive business solution that moves our customers’ objectives down the field.

A Single Brand Voice Can Deliver More Value

When you communicate with people and want them to interact with you, you need to have a singular, authoritative voice for your brand. While certain channels may speak to different audiences in different ways, the message and how it’s delivered should remain consistent.

A brand’s voice is best heard when it is offering value to its customers, and that’s only effective if you truly understand who they are and what they need.

From top to bottom, your company should share valuable information to make your customer’s life easier, and it should come from a familiar, trusted source. For CDK, this established voice allows us to move from traditional marketing to creating community.

Create Community

Community happens by providing education and expertise to the broader industry. It’s critical for success — especially today, as people are craving connectivity more than ever. You’re more likely to reach out to someone or respond to content that delivers value or understanding to your situation.

As we went through our brand refresh, we pushed our team to explore how to create community. We asked ourselves if we were front and center making it happen and if not, were we contributing to it or enabling it to grow in some way?

Automotive manufacturers and dealerships have the same opportunity. Dealers are at the physical center of their communities. This enables them to be the connector between the industry and the people. Manufacturers can create community by providing education and resources for their dealers.

Find Your Narrative

Branding isn’t simply changing your visual identity or your font colors; it’s how you tell your company’s story.

What does your corporate narrative reflect about what your company believes and what it does to better the world? We call this your brand promise.

To arrive at your brand promise, start with an employee conversation or executive audit. Ask them to answer key questions. How would they describe the buyer? How do your customers drive outcomes? What are the most important things to the key decision-maker or influencer in your sales process?

Understanding these insights helps you create your narrative and better communicate your brand promise to the world. And whether you update that narrative every few years or retain a brand promise for far longer, it must be authentic and wholly believable.

Make Your Customer the Hero

It can be a common practice for us to focus on our customer’s pain points as problems we can help solve. But while that process may end in a successful transaction, we need to look at solutions that can make the customer the hero. Take your time to understand where the pain points originate and listen to what your customer is telling you.

Today, there aren’t enough of us simply listening. By answering all the questions the customer has in today’s supply-strapped environment — even if it may seem like an additional effort — we set the stage for better customer retention when we emerge from the pandemic. Becoming a reliable resource by building a connection will always help perpetuate loyalty.

Start Now

Today’s intense demand from consumers is an excellent opportunity for every business to step up its communication game.

When you trade in your marketing agenda for a mission that builds valuable connections, you’re building trust with your customers and inviting them to be the heroes. As the heroes, they’ll feel a sense of satisfaction and loyalty towards your brand — no matter how many cars are on your lot.

Barb Edson