How To Sell Cars Online or Offline (PART 2)
TRANSCRIPT: Let’s jump into talking about today’s connected buyer. Let’s get into section one because we have to understand why things are changing and why we need to change in our dealerships. Remember these quick stats from a couple of webcasts ago? According to Autotrader, in 2015, 71% of used car buyers purchased the vehicle they intended. When they got to your lot, they purchased the vehicle they intended. Seventy-seven percent of new car buyers purchased the vehicle they intended.
When you tell these stats to a traditional, old-school sales manager, they’ll tell you, “You’re crazy. No, we flip everybody.” No, you don’t. You’re flipping people out of the store and they’re going to buying somewhere else. The reason that they bought the vehicle they intended is because Google tells us that before they ever set foot on your lot, they looked at more than 24 sources of information and they spent more than 19 hours doing research. We need to start treating every buyer like a connected buyer because they’ve done their own needs analysis. They’ve done their own product selection. They’ve done their own feature presentation. When they show up at your dealership, they’re looking for someone to sell you a car. Because connected buyers know what they want, a study by McKinsey & Company found that today’s buyers visit an average of 1.6 lots before buying. That’s down from more than five lots per buyer in 2004.
DMEautomotive tells us that 42% of new car buyers visited just one lot before buying. Think about that when we think about our traditional closing percentage of today’s traditional UPs. We probably close about 20% but 42% of buyers will buy at the first dealership they went to. We need to treat them as buyers.
Finally, according to DrivingSales. By the way, this looks like a chart where bug eyes, like flies’ eyes. They’re not. This is a chart showing how many people are dissatisfied with doing business with you. The chart here on your right, that’s the chart from Driving Sales. Ninety-nine percent of consumers say they expect a hassle when they start the car-shopping process. Those are the people in the red. The chart on the left. That’s from Autotrader. Autotrader did a study a year ago. They found out only about 1 in 235 buyers liked your current sales process. That’s what the green represents in these charts. It represents who enjoys the car-buying process.
We need to change. Here’s why we need to change. Everybody’s online. We know that. Let’s agree to that. Everybody knows what they want. Yeah, we’re going to have to get over that one. We have to start agreeing to that one. Everybody expects a hassle, 99% do. Everybody hates our current process. Two hundred and thirty-four out of 235 hate the current process. Knowing this, we’ve got to change the experience.
Given all of that, these guys have to have it all figured out. They have no dealership hassles. Check. No bad dealership processes? Yeah, check. Heck, no dealership expenses? Just buy and drive? Simple? No, they forgot a few things. There’s no dealership expense with these folks but they have the same acquisition and recon costs that we have, don’t they? They got to buy and they got to sell cars plus they have new costs that you don’t have like storage, pickup, delivery. Plus, not having dealers. No dealership experience means there’s no car shopping for these folks.
In the words of Dr. Alan Grant from Jurassic Park, “T-Rex doesn’t want to be fed. He wants to hunt.” There’s a reason that Beepi went out of business after burning through $150 million. It’s because they’re forgetting that people still want to shop, even when they know what they want but here’s the problem for you traditional dealers. You’re letting these guys define you. We have to change that.
“But Steve, eBay did a study of 1,000 eBay Motor shoppers and 1,000 other buyers last year and they found a whopping 63% said they were either likely or extremely likely to purchase a vehicle fully online in the future.” Oh, 63%! That’s great. Half of those people are already on eBay Motors. Why aren’t they doing that now? Why wasn’t it a higher number? Oh, and in the future, again, why not now? What’s stopping them? eBay has had the capability to sell a car fully online for over a decade.
Also in the eBay data, they showed us that men are twice as likely as women to have bought a car outright on eBay Motors. But wait, don’t women make the vast majority of buying decisions for cars? Yeah, absolutely. Aren’t we supposed to be gearing our processes toward attracting more women buyers? Yes. Both offline and online. That’s the experience we’re going to talk about today. eBay takes credit for millions of vehicles sold so far but the percent who will actually buy online today with all the tools, with all the transparency that’s out there, it’s still just a fraction of the population. We have an advantage over these guys because the amount of people who will actually buy the vehicle online today is only about 5% according to Rick Ricart, one of the dealers who’s selling car online today. T-Rex doesn’t want to be fed but he wants to hunt, but this doesn’t mean we’re going to say, “No,” to creating a great online buying experience on your website.
Today, you must be all-in on a great experience, online, offline and a hybrid of the two. All three, by the way, should be eerily similar to each other, I would argue largely identical. Let me explain that again. I’m saying that all three of your processes, whether it’s 100% offline or 100% online or a combination of the two, those processes, the way it feels to the customer, that experience should be largely identical, doesn’t matter which channel I’m using.