Major car dealership groups tout their digital retail processes and skills, but many of them rank only fair in a Pied Piper mystery shopping survey.
The consultancy’s Internet Lead Efficiency Study primarily measures how quickly mega-reseller stores respond to a specific question submitted through their websites. The autoresponder did not count.
Of the major groups, Penske Automotive, Berkshire Hathaway Automotive and Asbury Automotive Group score above the industry average.
In contrast, Sonic Automotive, Hendrick Automotive, AutoNation (the largest dealership chain in the US), Group 1 and Lithia are below average. (See chart below for full rankings.)
“We knew some of them would do well,” Pied Piper president Fran O’Hagan tells Wards. “But there’s a lot of variation in behavior.” Some dealers excelled at using one communication channel, but others did not. Exceptional dealers are adept at using all channels, whether it’s email, text, phone or chat.
“It is not enough to be good at one and not at another that the customer may prefer”, O’Hagan (in the photo, lower left) He says.
It pays for a dealership to be aware of Internet queries and avoid putting digital operations on “cruise control,” he says. “Our measurements show that dealers that respond quickly, personally and thoroughly to customer inquiries on the website sell an average of 50% more vehicles to the same number of website customers, compared to dealers They don’t respond.”
Pied Piper sent customer inquiries from mystery shoppers through the individual websites of 1,631 dealers, asked a question about a vehicle in inventory, provided a customer name, email address and local phone number, then evaluated how dealers responded within 24 hours.
“If you crafted a beautiful answer but it took 36 hours, you’re not doing it right,” says O’Hagan. “Responding quickly is the highest correlation with strong close rates.”
Customers in the top-performing dealer groups were three times more likely to get a quick response than customers in a low-performing group, says O’Hagan.
Digital car retail pioneer David Kain tells Wards that the bumpy performance among the dealer group is not surprising. “You’re seeing a bit of digital fatigue among the big groups,” he says.
He points out that while dealer groups are essentially centralized operations, general managers with stakes in the business manage many of the individual stores.
“If the GM is digitally attuned, they’ll be fine,” says Kain. (in the photo, lower left)who runs consulting firm Kain Automotive, co-founded the innovative FordDirect 25 years ago, and is part owner of a family-owned dealership, Jack Kain Ford in Versailles, KY.
Kain talks about the need for dealers to engage with shoppers, learn why they’re buying, “and not treat them like they’re trying to cash them at the register.”
Dealership groups’ larger marketing budgets give them an edge over independently owned stores, says Kain. “But the Pied Piper study shows there is not an advantage when it comes to engaging with customers.”
Here are sample performance variance studies by company:
- How often did the company’s dealers email or text a response to a website customer’s question within 30 minutes? More than 50% of the time on average: Napleton, Penske, Morgan, Serra. Less than 35% of the time on average: Ken Garff, AutoNation, Lithia, Victory.
- How often did a dealer use a text message to respond to a website customer inquiry? More than 35% of the time on average: Asbury, Automotive Management Services, Napleton, Morgan. Less than 20% of the time on average: Ken Garff, Penske, Greenway, Berkshire Hathaway, Victory.
- How often did a dealer call the web customer in 60 minutes? More than 75% of the time on average: Napleton. Less than 30% of the time on average: Victory, Greenway.
Pied Piper has conducted similar studies of dealer mystery shopping by brand. This is their first group effort.