CARFAX Canada Driving Insights

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Three Innovation Opportunities for 2020

by Drew Harden, Thu, Jan 2, 2020

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As we kick off 2020, there are many opportunities to consider regarding the future of customer experience including selling vehicles entirely online, putting an end to negotiation, or even letting customers choose their sales rep. But what do your customers want?  We took these ideas to Canadian used car buyers to understand their needs, and whether you should consider implementing them.


Opportunity #1: Should I start selling cars fully online?

There’s a lot of talk about the car buying process moving from dealerships to fully online. And when we say “online” we mean that every step of the buying process, from research to delivery, is completed digitally. But what do customers want?

We found that only 12% of customers said they would want to buy their next used car exclusively online, but many more want to do some of the process online. For instance, we found 32% of customers want to negotiate their next car, 28% want to view warranties and 31% want to determine their trade in value online.

With this in mind, consider trying a hybrid approach: let the customer decide how much and which parts of the process they want to do online, and which parts they want to carry out in the dealership.

Opportunity #2: Should I implement a “no-haggle” approach?

Negotiation has always been a top pain point for used car buyers, and in today’s online listing environment there is barely any room left for negotiation. Is it time to make your store a no-haggle store?

Even though used car buyers say they hate negotiation, only 27% said they would prefer to buy their next car from a no-haggle dealership over a traditional dealership that allows for negotiation.

This contradiction comes down to the fact that customers feel like they won’t get a good deal unless they negotiate. Even when a sales rep says they’ve got the best price, customers believe there is still some wiggle room. This points to a lack of trust between customer and salesperson. So, the opportunity isn’t in creating a no-haggle dealership, but to shift the conversation to price justification. Justify your price by showing comparable vehicles online and explain what your prices are based on using a recognizable source.

Opportunity #3: Should I let customers pick their sales rep?

Why is it that we give today’s car buyers countless tools to find the right vehicle, yet when it comes to deciding who will sell them that vehicle, the process hasn’t changed in 100 years? Used car buyers are tired of playing salesperson roulette; 74% would like to pick their sales rep the next time they buy a vehicle. The good news is your store stands to benefit.

If they could choose their own sales rep, 72% of customers would feel more comfortable visiting the dealership, and 76% would be more comfortable listening to the sales rep’s recommendations. Creating this process could have customers visiting your store sooner and trusting the rep they’re working with.

Here’s how you could make it work: the opportunity to pick a sales rep needs to happen online. Used car buyers said they would love an interactive tool that will provide a short list of reps, based on asking a few questions about their needs. But if that tool isn’t available, just picking from a list of reps would still be helpful. Use this process to prompt the customer to make an appointment, so you have a new opportunity to generate leads and bring customers into the dealership.

Explore how our research can be applied at your dealership to help you win more business - request a consultation with a CARFAX Canada Rep:

Driving Insights
Driving Insights is an information series designed to help used car dealers better understand the motives and behaviours of Canadian used car buyers. The research, designed by CARFAX Canada and executed by Dynata, is based on the most pressing questions of dealership management and staff across Canada, answered through a national survey of 1,000 Canadians who recently bought a used car from a dealership. If there’s a question you’d like us to address, email insights@carfax.ca and we’ll get you some answers!

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