By Zara McAlister, April 15, 2015
With a suite of alternative mobility options available to today’s consumer, speakers at AudaVision 2015 agree that dealers need to brush up on their digital strategies if they want to capture consumers —particularly Gen-Y
Dealers are operating in a new world where consumers can be as educated as the salespeople on the showroom floor. They demand speed and expect exceptional customer service.
“The customer has to be at the centre of our existence,” said Anthony Giagnacovo from Audatex Canada, who delivered the opening remarks at the AudaVision 2015 conference held on April 7-8 at the Palais Royale in Toronto, Ont.
This year’s theme, “Next is Now,” addressed how dealers should deal with the new and empowered consumer by adopting technologies that can help them improve customer service, from sales and all the way to fixed ops.
THE GEN-Y CONSUMER
Dealers need to step it up, especially when it comes to Gen-Y.
The Gen-Y consumer is not like their counterparts from the previous generation, said Tony Krajewski, in his opening presentation that kicked off the second day of the conference.
Krajewski, who leads Deloitte’s Customer Solutions practice in Toronto, shared his insights and trends from Deloitte’s 2014 Global Automotive Consumer Study, which elicited nearly 23,000 responses from over 19 different countries.
The study found that today’s millennials, who generally fall within the 18-30 year-old demographic, show that mobility patterns are shifting.
The majority of Gen-Y wants to live in an urban environment with walkable neighbourhoods and biking lanes, and where they can take public transportation and have access to car sharing services, rather than owning a vehicle.
Cars are not at the top of their minds, as shown by the 47 per cent of 18-30-year-olds who have yet to get their driver’s licenses, said Krajewski.
What he found alarming is that the average number of car trips have dropped 23 per cent from 2001-2009.
Lower incomes might account for their choices in mobility. But having little money was also true for the previous generation, said Krajewski. What it really boils down to is lifestyle choices.
In a panel discussion that followed Krajewski’s presentation, Dennis DesRosiers, president of DesRosiers Automotive Consultants, said: “In my day, I owned a vehicle for a single reason. I wanted to pick up girls,” he quipped, showing that the needs for owning a vehicle have definitely changed.
Gen-Y’s attitude towards owning a vehicle might send dealers into a panic, but Krajewski doesn’t think there’s any cause for concern.
Of the two billion members that make up the Gen-Y cohort, Krajewski learned 80 per cent of them plan on buying a car in the next five years, and the percentages are higher in emerging markets.
DesRosiers isn’t worried, either. He flat out asked the audience if everyone was planning on selling their vehicles as soon as they got home after hearing all the talk about car sharing or Uber, the controversial ridesharing program app. “You’re not going to give up ownership. It’s too convenient,” he said.
DISSATISFACTION WITH DEALERS
In his presentation on the Canadian automotive retail landscape, DesRosiers cited affordable high quality vehicles, and particularly used ones, as one of the reasons why the auto retail market continues to be so healthy
While that’s welcome news for consumers, who are spoiled for choice with high-grade vehicles, technology has made it much more difficult to differentiate between them.
That’s when customer experience comes into play at a dealership, said Krajewski. And it’s particularly important for Gen-Y, he added. Based on Deloitte’s 2014 survey, Krajewski found that customer experience is three times more important than vehicle design.
Car dealers should pay attention to this and deliver a solid customer experience, Krajewski said. Delivering a bad customer experience is sure to have Gen-Y talking.
And it has. Krajewski found half of U.S. Gen Y consumers feel disrespected by dealers or feel they are being treated poorly, and so do many consumers in other demographics.
But he added that even though a positive attitude towards dealers is at an all time low, consumers continue to recognize that they need dealers to help them buy cars.
For Gen-Y, a good customer experience is developing an intimate relationship with a dealer and feeling respected, said Krajewski. Dealers know that today’s customers are knowledgeable about all of the price options and models. Car buyers have spent hours online researching before they set foot in a dealership.
A panel discussion on technology and disruption also tackled customer satisfaction, as well as looking into brand loyalty and aspects surrounding telematics.
Panelists included Dennis DesRosiers, president of DesRosiers Automotive Consultants, Tim Wilson, Head of Auto for Google Canada, Paul-Andre Savoie, President and CEO of Baseline Telematics, Angelique Magi, vice-president of Strategic Initiatives for The Guarantee Company of North America (GCNA), and Krajewski, who returned for more discussion following his opening presentation.
Wilson said that he was astonished to learn based on an annual survey put out by Google in 2014, that 50 per cent of those surveyed know exactly what vehicle they want to buy.
That’s also resulting in less visits to different dealerships, he added, with five visits in the past shrunk down to just one or two when purchasing a vehicle.
But Wilson still believes there is a place for the dealership, even if consumers are buying cars online. What consumers want is a more detailed conversation with the dealer, or a more consultative selling approach, to help them fulfill their budget and needs. Any extra efforts or goodwill are also appreciated, particularly in negative situations like collisions, added Krajewski. Consumers are looking to replicate the experience they have at the Apple store, when they can go in to have a technical conversation with the salesperson.
Wilson can attest to the fact that consumers will share both their positive and negative experiences online.
There’s no doubt that digital strategies have transformed the industry. DesRosiers said that historically, dealerships have put up fences around their territories, all of which have been torn down by the Internet. He added that the digital strategies that some Canadian dealerships and big box automotive retail stores have been “blowing up this industry,” by putting thousands of marketing dollars into search engines like Google.
To help boost customer satisfaction, many of the day’s speakers agreed that dealers should employ digital strategies to engage with the customer throughout the vehicle’s life cycle, from sale all the way to fixed ops.
Paul-Andre Savoie, President and CEO of Baseline Telematics in the automotive insurance industry, said it’s important dealers “stay connected with consumers where it counts,” and that “there’s a lot of room now for service integration with technology,” in which dealers can obtain valuable customer data.
While the speakers generally recognized that there is no single digital strategy that’s going to work for every dealership, there are some tools in place that dealers need to use if they want to stay afloat.
“If you don’t have a mobile site, you are in trouble,” said Wilson.
While Wilson found that brand loyalty reduces overall with online shopping because consumers can discover new brands that hadn’t been considered prior, he did find that dealers have a long way to go to beef up on their digital strategies. At times he’s seen that when consumers ask questions online, the response from dealers is unsatisfactory, and usually written in all caps: “COME ON DOWN TO THE DEALERSHIP! WE’RE OPEN ‘TILL 6 ON SATURDAY.”
Besides having a digital strategy in place, the speakers generally agreed that answering customer inquiries promptly is a good way to retain them. Krajewski added that being speedy is important, but even more so is setting an expectation with the client and sticking to it.