Armed with reams of information – vehicle details, dealer reviews and price data – car shoppers hold most of the cards in today’s marketplace. But when the balance of power has shifted to the buyer, how can you compete?
It’s simple: winning auto shoppers’ business comes down to transparency.Focus on being transparent in three areas – vehicle information, business practices and pricing – and you’ll be well-equipped to win over the discerning shopper.
Transparency as a best practice might seem unusual, but being transparent will help you in three key ways:
1. Satisfy Information-Hungry Shoppers
Quite simply, today’s consumers expect transparency. Think about making an online purchase – a toy, a book, an item of clothing or even a flight. If you’ve bought any of these things online, odds are you sought information across a few different vendors before clicking the “Place Order” button.
Increasingly, this is the kind of behavior that car shoppers are exhibiting. In other words, the same expectations around product detail that consumers bring to Amazon, Kayak or Zillow has migrated to the auto market.
Our tip: Car shoppers want detailed information about the vehicles they’re considering – which means that your VDPs should be thorough and accurate. This includes photos: Upload enough photos to give a clear picture of each vehicle’s condition. Listings without photos, or with just stock photos, see measurably less engagement than those with genuine photos.
2. Reach Younger Shoppers
Transparency is particularly important to younger car shoppers. We’ve talked before about Millennial shopper preferences, and you may recall that they value practicality and ownership cost. Overall, they want cars that, like their digital devices, “just work”.
These values extend to car buying: Millennials want to walk the path to purchase with as little hassle as possible. Millennial car shoppers, who conduct more online research than other age groups, want to acquire lots of information before making the trip to a dealership. When they do visit dealers, younger shoppers don’t particularly like to haggle, Lexus and others have found.
Our tip: consider whether your in-dealership experience accommodates buyers who don’t want to negotiate over pricing. Validating your prices with third parties will help you win negotiation-averse shoppers. For Millennials, more than other shoppers, a pleasant car-buying experience matters.
3. Stay in Shoppers’ Consideration Set
There is no greater opportunity for transparency than in pricing. A vehicle is the second-most-expensive purchase most people will make – yet for many years, car and truck prices were hidden behind MSRPs, invoice prices, holdbacks and other items. Now, thanks to abundant online price data, both new- and used-car shoppers can determine what constitutes a fair market price.
The price-data revolution flies in the face of old ways of doing business. But it has ushered in a marketplace where customer needs truly come first. In an economy where all of us are customers some of the time, there’s no question we all benefit from this trend – even if it forces a rethink of how you price your vehicles.
Our tip: Price vehicles in line with your market (or better!) and prepare for shoppers to price-compare. On CarGurus, 90% of lead submissions happen on VDPs that are rated Great, Good or Fair for pricing. And three-quarters of CarGurus shoppers say they compare vehicle prices on their phones from inside dealerships. That means that if your vehicles aren’t fairly priced, shoppers will probably find out – and it may happen right at the point of purchase.
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