Better consumer knowledge, integrated marketing, optimised lead management, stronger web strategies, and collaboration between dealers and manufacturers are critical to improving automotive sales performance, according to a study from Cap Gemini.
The sixth annual 'Cars Online' study found that consumers demonstrate needs, wants and preferences that are not always met by the industry. As a result, motor manufacturers and dealers are missing important opportunities to improve sales, profitability, and even customer relationships and loyalty.
The global study revealed growth opportunities in areas such as marketing, internet capabilities, and after-sales servicing. For instance, as consumers move in market for a vehicle, they are more likely to respond to targeted direct-mail offers - a growing but still under-utilised marketing tool in the industry.
It was also evident that a strong web strategy and execution can affect buying decisions. One in two consumers said that having the web features they consider most important - such as price and product information, cost calculators and vehicle configurators - would make them more likely to buy from a particular car manufacturer.
Buying cycle changes
The research also identified some key changes in the automotive buying cycle. For instance, although consumers may move into the market for a new vehicle up to 12 months before they make a purchase, they do not necessarily begin the research process until closer to the actual time of purchase.
And they often don't "activate" (i.e. focus on specific terms ) until 1-3 months before their purchase. It is during this time frame that the role of marketing becomes critical for automotive companies in order to ensure that their vehicles are included in the consumer's consideration list.
The study, which surveyed consumers, dealers and manufacturers in Canada, USA, UK, France, Germany, Sweden, Italy and China, compared consumers' actual needs, demands and preferences with dealers' and vehicle manufacturers' perceptions of them. The survey's report focused on consumer behaviour, sales lead management, use of the internet, and after-sales servicing.
Among other factors, the survey found that:
- Brand loyalty surpasses dealer loyalty. More than half of consumers say they are likely to purchase or lease the same brand of vehicle that they currently own, while about 40% will buy from the same dealer.
- All consumers are not created equal - and should not be marketed to as such. The automotive consumer base is increasingly segmented, with groups such as "utilitarian" and "trendy" buyers demonstrating different buying behaviour.
- Practical basics drive vehicle decisions. When it comes to their vehicle choices, consumers care most about basics such as price, fuel economy, build/quality and after sales service.
- Manufacturers are not optimizing their lead management process. By their own assessment, only 15% of manufacturers rate their lead management system as "very advanced".
- A strong web site strategy and execution can impact consumer buying decisions, improve lead capture and drive sales. The key for automotive companies is to ensure that their site offers more than just cool features and zippy graphics. What consumers really want is the ability to accomplish specific tasks.
- After sales/servicing represents an important opportunity to gain repeat customers and build brand loyalty.
- China emerged as a strong growth market with unique dynamics. For instance, Chinese consumers are much more likely to be in the market for a new rather than a used vehicle and they are far less loyal to either the brand or dealer.