Finding new ways to attract customers and gain a leg up on the competition is always important for car dealers. Edmunds.com’s Chief Economist Lacey Plache, PhD, has recently completed extensive research on how, for many dealers, a sales boost and significant return on investment can come from creating or enhancing their relationships with third-party websites. Her guest post follows: 

Third-party websites offer at least four key ways for dealers to grow their sales:

1. Customer Acquisition opportunities
2. Retention opportunities
3. Personalization opportunities
4. Communication opportunities

Customer Acquisition Opportunities

Popular third-party websites deliver promising customer acquisition opportunities for dealers looking to grow their businesses. Studies show that third-party sites attract a larger and largely different audience than dealer sites. What’s more, that audience is a desirable one for dealers:

• According to Compete data, third-party sites tend to attract above-average income earners and over-index on Millennials.
• Third-party sites draw engaged, in-market shoppers whose online behavior indicates that they are actively preparing for purchase.
• Third-party sites appeal to shoppers of both new and used vehicles.

Retention Opportunities

Beyond acquisition opportunities, third-party sites also offer the unexpected benefit of helping dealers retain their own customers. Edmunds research has found that visitors who visit a dealer site before coming to Edmunds are significantly more likely to request a price quote. And, a joint study conducted by Edmunds and CDK Global shows that car shoppers who combine dealer website research with Edmunds research are four times more likely to purchase a car.

Why is this true? Edmunds' analysis shows that the explanation lies in how visitors use the two different sites—that is, how they use them differently. Dealer site visitors tend to limit their site activity to viewing inventory and looking for dealer specials, while visitors use Edmunds for a much wider range of pre-buying activities, including researching vehicles, using tools such as vehicle appraisers and payment calculators, and reading articles on car-buying as well as viewing inventory. Supplementing and validating dealer site info with Edmunds info is what pushes dual site visitors to pull the buying trigger.

Personalization Opportunities

Third-party sites serving immense audiences of car shoppers may be collecting and analyzing useful data on these audiences—data that dealers likely do not have, but could make good use of. In working with third-party sites, dealers may want to leverage these objective insights to personalize the shopping and buying experience as much as possible in order to best serve customers.

For example, third-party sites offer a large variety of content for car-shopping visitors and track visitor engagement on their sites. As a result, they may have substantial insight into what matters to shoppers, including features (Bluetooth, third-row seats, vehicle type), pre-buying tasks, concerns, etc. The data can also show which third-party site visitors are shopping new only, used only or both. Third-party site traffic can serve as a gauge for how seriously a visitor is shopping any given model and key competing models. Savvy third-party sites can even predict how likely a visitor is to purchase in a certain time frame, and can tell you if you’re the closest dealer with whom a shopper engaged online.

Knowing this information can make it possible for a dealer to personalize the shopping experience for each site visitor, such as by putting content on the page that corresponds to a visitor’s activities on a third-party site and by exercising sales techniques best suited to that customer’s interests.

CDK Global research shows that consumers who experience personalized content on a dealer’s website engage more than those who do not. On average, shoppers interact with 53 percent more VINs, perform 58 percent more vehicle searches, and return to the dealer website more than twice as often. Overall, dealers who deliver personalized experiences on their websites see 28 percent more ‘likely buyers’—consumers who search inventory, view vehicle detail pages (VDPs) and submit a lead.

“Savvy dealers recognize the value of leveraging the interests that consumers reveal throughout their digital journey and personalize the website for each visitor,” stated Max Steckler, VP of Product at CDK Global. “Knowing how powerful personalization is, we’ve been personalizing the experience for dealer website visitors since 2013 based on both their on-site and off-site activity, including select manufacturer websites and third-party websites.”

Communication Opportunities

Third-party sites not only provide a channel for engaging shoppers with relevant pre-buying content, but also can provide platforms for direct and immediate communication with customers using the format that they prefer. For example, many third party sites offer customers links to “Click to call” and/or “Click to Email” a dealer directly. 

Lacey Plache is the Chief Economist for Edmunds.com. Follow @AutoEconomist [http://twitter.com/autoeconomist] on Twitter.

Research shows that 70 percent of car shoppers read dealership reviews before walking onto a lot. Do you know what your reviews say about you?

For about 800 dealers around the country, they say consistently great things. These conscientious dealers are the proud recipients of Edmunds’ Five Star Dealer Awards.  This accolade is presented both online and in the showroom, giving winning dealers the opportunity to benefit from the halo effect of having such an influential shopping site publicly recognize how well they treat their customers.

So, what are the Five Star Dealers doing right?

Here is the path to impressive online ratings:

Step 1: Build and emphasize a culture that prioritizes the customer. If your staff is motivated and empowered to deliver high levels of customer satisfaction, you’ll see the return in the form of repeat customers and referrals.

Step 2: Assign at least one of your employees the important task of monitoring your online reviews and responding pleasantly to all of them. Anyone assuming this role should exhibit graciousness on behalf of your store, showing appreciation for positive comments and addressing and diffusing any concerns raised. It will never make sense to engage in a defensive online debate. Always take the high road by acknowledging any mistakes made and offering solutions in a calm, supportive manner. Then, once the customer has been satisfied, you can ask him or her to amend the review to share the updated impression that you’ve made. Consistently posting timely, thoughtful and personable responses to all reviews will demonstrate your focus on the customer and the value that you place on relationships. This sends a positive signal for shoppers who are trying to determine where to take their business.

Step 3: Take action internally if an online review of your store recounts a negative experience. Talk openly with anyone involved in the transaction to learn what may have caused this customer to walk away less than satisfied. Learn from the experience and try to improve your process. As the old adage goes, “You can’t please all of the people all of the time,” but it’s worth trying to come as close as possible, given the importance of word of mouth.

Step 4: Encourage your customers to submit reviews. “Even with all the sharing that goes on today, I'm not convinced that every shopper will leave a review on his or her own without encouragement. Just like a salesperson should ask for the sale, a salesperson should ask for a review,” stated former car salesman Matt Jones, who now serves as Edmunds’ Senior Editor covering modern-day car shopping and how the retail experience has evolved.  Some sites offer a “review accelerator” that strategically embeds a tool on the dealer website so that customers can easily submit reviews to appear on both the dealer site and a trusted third-party site.  Capitalize on the opportunity to have your best stories told to the world.

Step 5:  Consider adding unique and cherished customer experiences to your facility. Many of the five-star reviews we see on Edmunds reference the extras offered at the dealership such as tasty refreshments, Wi-Fi and activities to entertain children. Give shoppers a memorable experience that goes above their expectations, and that will give them something positive and interesting to share with others.

What are you doing to earn five stars?

Research shows that 70 percent of car shoppers read dealership reviews before walking onto a lot. Do you know what your reviews say about you?

For about 800 dealers around the country, they say consistently great things. These conscientious dealers are the proud recipients of Edmunds’ Five Star Dealer Awards.  This accolade is presented both online and in the showroom, giving winning dealers the opportunity to benefit from the halo effect of having such an influential shopping site publicly recognize how well they treat their customers.

So, what are the Five Star Dealers doing right?

Here is the path to impressive online ratings:

Step 1: Build and emphasize a culture that prioritizes the customer. If your staff is motivated and empowered to deliver high levels of customer satisfaction, you’ll see the return in the form of repeat customers and referrals.

Step 2: Assign at least one of your employees the important task of monitoring your online reviews and responding pleasantly to all of them. Anyone assuming this role should exhibit graciousness on behalf of your store, showing appreciation for positive comments and addressing and diffusing any concerns raised. It will never make sense to engage in a defensive online debate. Always take the high road by acknowledging any mistakes made and offering solutions in a calm, supportive manner. Then, once the customer has been satisfied, you can ask him or her to amend the review to share the updated impression that you’ve made. Consistently posting timely, thoughtful and personable responses to all reviews will demonstrate your focus on the customer and the value that you place on relationships. This sends a positive signal for shoppers who are trying to determine where to take their business.

Step 3: Take action internally if an online review of your store recounts a negative experience. Talk openly with anyone involved in the transaction to learn what may have caused this customer to walk away less than satisfied. Learn from the experience and try to improve your process. As the old adage goes, “You can’t please all of the people all of the time,” but it’s worth trying to come as close as possible, given the importance of word of mouth.

Step 4: Encourage your customers to submit reviews. “Even with all the sharing that goes on today, I'm not convinced that every shopper will leave a review on his or her own without encouragement. Just like a salesperson should ask for the sale, a salesperson should ask for a review,” stated former car salesman Matt Jones, who now serves as Edmunds’ Senior Editor covering modern-day car shopping and how the retail experience has evolved.  Some sites offer a “review accelerator” that strategically embeds a tool on the dealer website so that customers can easily submit reviews to appear on both the dealer site and a trusted third-party site.  Capitalize on the opportunity to have your best stories told to the world.

Step 5:  Consider adding unique and cherished customer experiences to your facility. Many of the five-star reviews we see on Edmunds reference the extras offered at the dealership such as tasty refreshments, Wi-Fi and activities to entertain children. Give shoppers a memorable experience that goes above their expectations, and that will give them something positive and interesting to share with others.

What are you doing to earn five stars?

Millennials are car shopping, and you'll want their business now and into the future. In this special guest post, Edmunds.com’s Chief Economist Lacey Plache, PhD, discusses new research on their preferences that reveals how to seal the deal:

Hurricane season is nearly over for 2015, but heading our way is another force to be reckoned with.

Millennials, currently aged 18-34, make up the largest generation in US history, with about 75 million members, and they are moving into the car market in a significant way.

This generation has made a weak showing in dealerships to date. The Millennials’ share of new car sales has languished around 12% in recent years and their share of used car sales has been just 18%. Both shares are proportionally low considering that Millennials make up 30% of the U.S. adult population. By many accounts, these lackluster sales can be attributed to a lack of interest in owning a car or even driving at all. Millennials are said to be more interested in owning an iPhone and socializing online. Edmunds’ research, however, has found that Millennials have not bought cars due to economic constraints rather than the rise of an anti-car culture. As they get a better foothold, we’re going to see more of them come to market.

Good news: The economic tide finally appears to be turning for this key age group. Employment finally returned to 2007 levels for both younger (18-24) and older (25-34) Millennials in 2015, enhancing the group’s ability to afford a car. A better job market has meant that many more Millennials are moving out from parent and roommate housing to form their own households, increasing their need to own a car. In fact, Millennials are already car shopping. An impressive 38% of visitors on Edmunds.com come from this cohort and they are showing strong interest in both new and used cars. It’s also worth noting that their share of site shopping far outpaces sales shares in both markets, signaling that stronger car buying by Millennials is on the horizon.

So, what’s the best way to attract Millennials who are in the market for a car?  The first step is to find them where they’re shopping. While Millennials use desktops, tablets and smartphones to car shop, they tend to prefer their phones. On Edmunds, 60% of Millennial visitors come through the mobile site. These mobile shoppers are more active during evening and weekend hours, i.e., the times when shoppers are out and about, suggesting that they may be using their phones on the dealer lot.

Mobile shoppers are just as likely as wired site shoppers to view specific models and they consume comparable amounts of site content to wired site users. What’s more, Edmunds’ analyses reveal that mobile shoppers appear to be as serious about car buying as wired shoppers. Shoppers on both site types engage in the same key shopping activities, including reading reviews, researching pricing and viewing inventory.

Further, Edmunds finds that mobile shoppers are increasingly likely to contact dealers. The volume of customers submitting traditional price request forms has more than doubled year over year for the past two years, thanks to growing mobile traffic and to optimizing the forms for mobile usage. New ways of contacting dealers are also proving popular with mobile shoppers. For example, Edmunds introduced its Carcode texting platform last winter to facilitate shopper-dealer contact through this popular communication method. (How popular? Usage statistics find that 90% of text messages are read with the average text message read in 90 seconds. Text message open rates hover around 99%, compared to email open rates of 22%.) Carcode contacts have grown rapidly since its roll-out. Plus, “clicking to call” a dealer from the Edmunds website is gaining momentum with mobile shoppers as well.

After locating car-shopping Millennials, the next step is to know what to offer them. Edmunds’ analyses show that Millennials have champagne tastes on a beer budget. They value comfort, performance and features and they represent the largest group of shoppers on Edmunds with an affinity for luxury, according to Google Analytics. When it comes to buying, they do buy luxury vehicles when they can. Millennials buy a higher share of luxury and sports cars than other age groups at the same income levels for every income level except the highest ($150,000 and above).

But, buying luxury can be challenging for many Millennials, given their economic constraints. They also represent the largest groups of value shoppers and bargain shoppers on Edmunds and they pride themselves on being smart buyers.

Not surprisingly, they like to lease. Millennials lease a higher share of new cars (28%) than any other age group (25%).

Millennials are a huge generation, and many experts recommend sub-segmenting them to reflect the variety of lifestyle choices they are making. For dealers, the range of Millennials’ preferences means there is plenty of opportunity for both mass market and luxury brands to attract Millennials. The key strategy is to offer plenty of bang for the buck.

Lacey Plache is the Chief Economist for Edmunds.com. Follow @AutoEconomist [http://twitter.com/autoeconomist] on Twitter.

Millennials are car shopping, and you'll want their business now and into the future. In this special guest post, Edmunds.com’s Chief Economist Lacey Plache, PhD, discusses new research on their preferences that reveals how to seal the deal:

Hurricane season is nearly over for 2015, but heading our way is another force to be reckoned with.

Millennials, currently aged 18-34, make up the largest generation in US history, with about 75 million members, and they are moving into the car market in a significant way.

This generation has made a weak showing in dealerships to date. The Millennials’ share of new car sales has languished around 12% in recent years and their share of used car sales has been just 18%. Both shares are proportionally low considering that Millennials make up 30% of the U.S. adult population. By many accounts, these lackluster sales can be attributed to a lack of interest in owning a car or even driving at all. Millennials are said to be more interested in owning an iPhone and socializing online. Edmunds’ research, however, has found that Millennials have not bought cars due to economic constraints rather than the rise of an anti-car culture. As they get a better foothold, we’re going to see more of them come to market.

Good news: The economic tide finally appears to be turning for this key age group. Employment finally returned to 2007 levels for both younger (18-24) and older (25-34) Millennials in 2015, enhancing the group’s ability to afford a car. A better job market has meant that many more Millennials are moving out from parent and roommate housing to form their own households, increasing their need to own a car. In fact, Millennials are already car shopping. An impressive 38% of visitors on Edmunds.com come from this cohort and they are showing strong interest in both new and used cars. It’s also worth noting that their share of site shopping far outpaces sales shares in both markets, signaling that stronger car buying by Millennials is on the horizon.

So, what’s the best way to attract Millennials who are in the market for a car?  The first step is to find them where they’re shopping. While Millennials use desktops, tablets and smartphones to car shop, they tend to prefer their phones. On Edmunds, 60% of Millennial visitors come through the mobile site. These mobile shoppers are more active during evening and weekend hours, i.e., the times when shoppers are out and about, suggesting that they may be using their phones on the dealer lot.

Mobile shoppers are just as likely as wired site shoppers to view specific models and they consume comparable amounts of site content to wired site users. What’s more, Edmunds’ analyses reveal that mobile shoppers appear to be as serious about car buying as wired shoppers. Shoppers on both site types engage in the same key shopping activities, including reading reviews, researching pricing and viewing inventory.

Further, Edmunds finds that mobile shoppers are increasingly likely to contact dealers. The volume of customers submitting traditional price request forms has more than doubled year over year for the past two years, thanks to growing mobile traffic and to optimizing the forms for mobile usage. New ways of contacting dealers are also proving popular with mobile shoppers. For example, Edmunds introduced its Carcode texting platform last winter to facilitate shopper-dealer contact through this popular communication method. (How popular? Usage statistics find that 90% of text messages are read with the average text message read in 90 seconds. Text message open rates hover around 99%, compared to email open rates of 22%.) Carcode contacts have grown rapidly since its roll-out. Plus, “clicking to call” a dealer from the Edmunds website is gaining momentum with mobile shoppers as well.

After locating car-shopping Millennials, the next step is to know what to offer them. Edmunds’ analyses show that Millennials have champagne tastes on a beer budget. They value comfort, performance and features and they represent the largest group of shoppers on Edmunds with an affinity for luxury, according to Google Analytics. When it comes to buying, they do buy luxury vehicles when they can. Millennials buy a higher share of luxury and sports cars than other age groups at the same income levels for every income level except the highest ($150,000 and above).

But, buying luxury can be challenging for many Millennials, given their economic constraints. They also represent the largest groups of value shoppers and bargain shoppers on Edmunds and they pride themselves on being smart buyers.

Not surprisingly, they like to lease. Millennials lease a higher share of new cars (28%) than any other age group (25%).

Millennials are a huge generation, and many experts recommend sub-segmenting them to reflect the variety of lifestyle choices they are making. For dealers, the range of Millennials’ preferences means there is plenty of opportunity for both mass market and luxury brands to attract Millennials. The key strategy is to offer plenty of bang for the buck.

Lacey Plache is the Chief Economist for Edmunds.com. Follow @AutoEconomist [http://twitter.com/autoeconomist] on Twitter.

It is rare to come upon a car shopper today who hasn’t used the Internet before (or during) his or her visit to a dealership. With the proliferation of smartphones and the growing population of Millennials in the car market, the trend is only likely to grow – and dealers can make it work to their advantage.

From our view, we at Edmunds.com see three different types of opportunities for dealers to use third party validation to close a deal, and we can offer some tips about what seems to work best.

Validating Prices and Product Information

We all know that shoppers use online data to research and validate pricing and product information, and that they are confident in the data they collect from reliable third-party sources. The content on your website and other customer channels should be consistent with the sources that shoppers trust.

Your technology people are likely familiar with the term API, and, for these purposes, it might be helpful for you to understand its basics. An API allows for sharing of data and tools between companies, and many of them are free. If you have a popular map program on your website, you’re probably using an API already. There are other useful tools available through an API, too, like comparators and trade-in appraisal calculators. There is also the ability for you to easily post a database of product specs, vehicle reviews and other robust content that can help round out your website offerings. Talk with your tech team about it.

But what about the customer who doesn’t want to go to your website but still wants to collect quick online validation before making a final decision? We at Edmunds.com have received feedback that accessing our site during a sale can pose a challenge for salespeople because shoppers may come upon information about a competitor or get distracted by the opportunity to do deeper research. As a result of this learning, we developed “Edmunds Express."

Earning High Dealer Ratings and Reviews

Word of mouth has always been an important factor in car sales, and now the concept has taken on even more significance as it relates to online exchanges between strangers as well as old-fashioned conversations between friends and neighbors.

Do you think that you can’t easily influence the ratings and reviews you earn online? And do you believe that most online reviews are negative? As the most established host of online dealership reviews, we can tell you without question that neither assumption is true.

The Edmunds Reviews Team analyzed a one-month period of dealership reviews posted on Edmunds.com, and found that over 90% of the reviews published were positive reviews for either the sales or service department, and the most common title for any review was "Great Experience."

Here are some of the qualities and experiences that were often described in 5-star reviews, and may in fact have motivated consumers to write them in the first place:

·        No-pressure, didn't feel rushed

·        Trustworthy

·        They listened to me

·        Quick and painless — the dealership made the process easy

·        Quick and clear communication (email or in-person)

·        No games

·        Final price was exactly as negotiated (no last-minute surprises)

·        Professional and polite salesperson

·        Attentive to customer's needs

·        Salesperson went above & beyond — locating a specific vehicle, delivering vehicle to customer, staying after hours, etc.

·        Extras offered by the dealership or salesperson: a cold beverage on a warm day, Wi-Fi, activities to entertain children, fresh-baked cookies, massages/manicures.

Turning Negative Online Reviews into a Positive

Of course, we recognize that not all online reviews are positive. It’s never easy to hear constructive criticism, especially when it is public and could affect your opportunity to earn someone’s business.

But online reviews that are sweet as sugar seem suspect, even in an environment as carefully moderated as Edmunds.com’s. Even the best businesses are likely to have a customer who may not have enjoyed their experience. Don’t overreact to a single negative review. Use this as an opportunity to learn and grow your business and to show your future customers how pleasant and responsive you are when a problem arises.

Gracious professionalism will be the smartest and most productive response to any negative review.  When appropriate, it is fair to civilly disagree and point out where you believe the experience was different or a misunderstanding occurred. It is always counter-productive to retaliate or respond with a nasty tone. Remember, your future prospects may be silently watching the online conversation, and they want to see you treating customers right. Ultimately, it can be to your benefit to respond graciously to criticism.

It is rare to come upon a car shopper today who hasn’t used the Internet before (or during) his or her visit to a dealership. With the proliferation of smartphones and the growing population of Millennials in the car market, the trend is only likely to grow – and dealers can make it work to their advantage.

From our view, we at Edmunds.com see three different types of opportunities for dealers to use third party validation to close a deal, and we can offer some tips about what seems to work best.

Validating Prices and Product Information

We all know that shoppers use online data to research and validate pricing and product information, and that they are confident in the data they collect from reliable third-party sources. The content on your website and other customer channels should be consistent with the sources that shoppers trust.

Your technology people are likely familiar with the term API, and, for these purposes, it might be helpful for you to understand its basics. An API allows for sharing of data and tools between companies, and many of them are free. If you have a popular map program on your website, you’re probably using an API already. There are other useful tools available through an API, too, like comparators and trade-in appraisal calculators. There is also the ability for you to easily post a database of product specs, vehicle reviews and other robust content that can help round out your website offerings. Talk with your tech team about it.

But what about the customer who doesn’t want to go to your website but still wants to collect quick online validation before making a final decision? We at Edmunds.com have received feedback that accessing our site during a sale can pose a challenge for salespeople because shoppers may come upon information about a competitor or get distracted by the opportunity to do deeper research. As a result of this learning, we developed “Edmunds Express."

Earning High Dealer Ratings and Reviews

Word of mouth has always been an important factor in car sales, and now the concept has taken on even more significance as it relates to online exchanges between strangers as well as old-fashioned conversations between friends and neighbors.

Do you think that you can’t easily influence the ratings and reviews you earn online? And do you believe that most online reviews are negative? As the most established host of online dealership reviews, we can tell you without question that neither assumption is true.

The Edmunds Reviews Team analyzed a one-month period of dealership reviews posted on Edmunds.com, and found that over 90% of the reviews published were positive reviews for either the sales or service department, and the most common title for any review was "Great Experience."

Here are some of the qualities and experiences that were often described in 5-star reviews, and may in fact have motivated consumers to write them in the first place:

·        No-pressure, didn't feel rushed

·        Trustworthy

·        They listened to me

·        Quick and painless — the dealership made the process easy

·        Quick and clear communication (email or in-person)

·        No games

·        Final price was exactly as negotiated (no last-minute surprises)

·        Professional and polite salesperson

·        Attentive to customer's needs

·        Salesperson went above & beyond — locating a specific vehicle, delivering vehicle to customer, staying after hours, etc.

·        Extras offered by the dealership or salesperson: a cold beverage on a warm day, Wi-Fi, activities to entertain children, fresh-baked cookies, massages/manicures.

Turning Negative Online Reviews into a Positive

Of course, we recognize that not all online reviews are positive. It’s never easy to hear constructive criticism, especially when it is public and could affect your opportunity to earn someone’s business.

But online reviews that are sweet as sugar seem suspect, even in an environment as carefully moderated as Edmunds.com’s. Even the best businesses are likely to have a customer who may not have enjoyed their experience. Don’t overreact to a single negative review. Use this as an opportunity to learn and grow your business and to show your future customers how pleasant and responsive you are when a problem arises.

Gracious professionalism will be the smartest and most productive response to any negative review.  When appropriate, it is fair to civilly disagree and point out where you believe the experience was different or a misunderstanding occurred. It is always counter-productive to retaliate or respond with a nasty tone. Remember, your future prospects may be silently watching the online conversation, and they want to see you treating customers right. Ultimately, it can be to your benefit to respond graciously to criticism.