Driving Car Purchases Online

Recently I joined the ranks of one of those highly sought-after online audience segments. I’m in the final stages of selecting and buying a car. In car-marketing lingo, I’ve gone “in market.” What an educational excursion it’s been. The lessons I’ve learned don’t apply to just automotive marketers, though. They apply to anyone trying to generate leads online.

Naturally, I turned to the Internet when I decided to enter the market. What do you expect from someone who already buys toothpaste and toilet paper online? I’m not alone, either. Fifty-seven percent of Internet users who plan to purchase a vehicle in the next 12 months perform research online, according to Jupiter Research (a unit of this site’s parent corporation). That’s 139 million consumers ready to spend big bucks. The competition to influence them is growing fierce.

The part of the process that interested me most wasn’t when I was scouring manufacturer and third-party content sites or taking note of banner ads. It was the moment I was ready to buy. From whom should I buy?

At this point, the manufacturer pretty much had me in the bag, but the dealers still had a lot to gain… or lose.

Turns out, folks whose online experiences influenced their purchase decisions are nearly twice as likely to request a quote from a dealer than those who weren’t influenced. My bet is online purchase-decision influence will grow over time, and more users will initiate the actual transaction online. J.D. Power and Associates research bears me out. Manufacturers sent dealers 75 percent more online leads so far this year than in 2002, researchers found. There’s a big opportunity here, and not many seem to be getting it right so far.

Say What You Mean

The whole car-buying process used to be a sort of black-box procedure. You went to a dealership and told the salesperson what you wanted. A few taps on the calculator later, a price emerged. Where it came from, the buyer might never know for sure — nor would she necessarily know whether it was a good deal. Perhaps the salesperson could be talked down. Or perhaps mysterious fees would get tacked on later.

The Internet changed all that — and not just in the automotive business. Buyers are much more informed. They can easily find out the manufacturer’s suggested retail price, invoice price, option prices, and potential payments. They have a better idea about whether they’re getting a good deal. That level of information access fosters a sense of self-empowerment. But it also means people are armed with the ability to detect inconsistencies and half-truths. Straightforwardness, then, is key.

I filled out a few of those “request a quote” forms online. Perhaps I was naive to believe I’d actually get a quote in return if I gave up my name, address, phone number, and email address. For the most part, I got follow-up emails (anywhere from an hour to a day later) from dealerships, not one of which actually gave me a price. One subject line read, “Thank You for your concern.” Hmm… I didn’t express concern. I just asked for a price on a car.

The Follow-Through

Perhaps I’m spoiled to expect a quick, thorough follow-up, but I think most online shoppers are a little spoiled. We don’t have to get out to the stores; we get things delivered to our doors; we can buy in our pajamas at midnight if the mood strikes us. And we expect someone to respond if we suggest we’re interested in making a $10,000-plus purchase.

In one case, I got a follow-up phone call, but it was from someone with a typical car salesman’s attitude. “Come on over to the dealership,” he said. Did he have the car I wanted in stock? No. But I should come over anyway. He’d put me down for 4 p.m. on Saturday and call to remind me earlier in the day. Talk about a turnoff.

In only one case was I actually quoted a price with minimal fuss. That was on CarsDirect.com, a company whose investor list includes none other than Amazon.com, the undisputed leader of online customer service. CarsDirect allows users to configure a car online and get an actual bottom-line price that the company will honor.

It doesn’t sell the car itself, but instead plays matchmaker with dealers. Still, if you go through its direct process (in which a CarsDirect employee guides you through the process rather than referring you to the dealer immediately), the price quoted is the real price.

“It’s hard to [quote a price up front] because we are managing 120,000 price SKUs, when you look at all the make, model, trim, and geographic combinations,” said Chuck Hoover, CarsDirect’s senior VP of marketing and business development. “That’s a huge amount of data to manage.”

Yet it’s a huge competitive advantage for CarsDirect, and it signals the company’s understanding of the new Internet information-powered consumer.

“Well, typically [people who come in from Internet leads] are better informed. They are doing their research, so they know more about the pricing,” said Hoover. “Also, they are using the Internet as a tool of convenience or timesaving, so they are looking for the dealer to interact with them with an understanding of that — like not playing games with them, giving them the price up front.”

Ah, what a fresh perspective. Oh, and by the way, I’m no longer “in market.” I’m picking up my new car on Saturday. It’s red.

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