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DEALIXAutomobile Shopping Behavior 2007
Research Insights for Dealix Customers
DEALIX
Highlights of 5 Major Industry Studies in 2007
> 2007 New and Used Autoshopper Studies
> 1 million leads from 1,140 dealerships representing 35 brands matched with DMV data to assess sales rates and tim e to close
> Two consumer surveys:
- 550 vehicle shoppers and purchasers
- 1000 vehicle purchasers||
> 2100 dealerships in eMystery shop campaigns [20 bran ds]
> 20 onsite visits to top performing dealers
DEALIX
Key Insights for Your Dealership
> All customers are “internet customers”
> 3rd party leads are essential to reach 20-25% of shoppe rs
> Many shoppers have a different timeline than your s ales team
> You only have one shot to win over a shopper
> Excellent lead management practices increase close rates 2-3X
DEALIX
Consumer Shopping Process
1. Should I be in market?
- Resale value/condition of current vehicle
- Change in vehicle needs
- “Gotta have” new model
2. Which models meet my needs?
- Price, styling, reliability, size
- Previous experience
- Advice from friends
3. Where should I purchase?
- Price
- Convenient location
- Service
DEALIX
Metrics Through the Funnel
Consideration
Purchase
Awareness
Familiarity
Visit Dealer
→ Change in awareness
→ Improvement in familiarity
→ Improvement of opinion
→ Click on ad
→ Click to site
→ Build a vehicle
→ Search inventory
→ Search for dealer info
→ Request a quote
Measures of Success
DEALIX
All customers are Internet customers
Base: Total Respondents (550)Q4 When researching auto dealerships, which of these online search engines did you use to obtain information? (Please select a ll that apply.)QS10Which of the following resources ‘did you use t o gather information while shopping for your new vehicle?’ OR ‘are you using to gather information while shopping for your new vehicle?’Q0You mentioned that you used the resources shown b elow to research and shop for new vehicles. How did you reach each of t hese websites?
Car shoppers are qualifying dealers by researching online & using search for vehicle dealership research
Yahoo! Search Marketing Proprietary and Confidentia l. © 2007. All Rights Reserved.
DEALIXPercent of New-Vehicle Buyers
Submitting a Request for Online Dealer Referral
20% 21% 21% 22%
0%
10%
20%
30%
40%
50%
60%
2004 2005 2006 2007
Based to new-vehicle buyersSource: J.D. Power and Associates 2004-2007 New Aut oshopper.com Studies
Requests for online quotes are steady%
of A
ll B
uyer
s
Visited DealerFound Online
39%
DEALIXMethod that Led to Used Vehicle Purchased
14%11% 10%
5% 5%
11% 12%16%
23%
9%
0%
5%
10%
15%
20%
25%
30%
Newspaper Classifieds Classified Ad Magazines Online Classifieds
Based to late model used-vehicle buyersSource: J.D. Power and Associates 2003-2007 Used Au toshopper.com Studies
23% of used vehicles sold are sourced online
2003 2004 2005 2006 2007^
% o
f All
Buy
ers
DEALIX
Key Insights for Your Dealership
> All customers are “internet customers”
> 3rd party leads are essential to reach 20-25% of shoppe rs
> Many shoppers have a different timeline than your s ales team
> You only have one shot to win over a shopper
> Excellent lead management practices increase close rates 2-3X
DEALIXPurchase Milestones of New-Vehicle AIU's
012345678910111213141516
Weeks Before Purchase (Mean)
Decide on typeof vehicle
Start visitingdealers
The new-vehicle shopping process takes about 3 months for the average shopper
Decide it was time to purchase
Shop vehicleson the Internet
Start activelyresearching vehicles
Decide onmodel
Purchasenew vehicle
14.7
11.7
11.0
10.4
7.6
6.3
0
Source: 2007 J.D. Power and Associates New Autoshopper.com Study. Based to AIUs.
DEALIX
One-third of new-vehicle buyers purchase within 1 month of deciding they need a new vehicle
Shopping Timeline of AIU's
8%
15%
10%
2%
18%
22%
13%13%
0%
5%
10%
15%
20%
25%
53 ormore
25 to 52 21 to 24 9 to 20 5 to 8 4 3 to 2 1 week
Weeks Before Purchase
Decide time to buy
34% Shopping Process One Month or less
27% Shopping Process Over Six Months
Source: 2007 J.D. Power and Associates New Autoshopper.com Study. Based to AIUs.
DEALIXPurchase Milestones of Used-Vehicle AIU's
012345678910111213141516
Weeks Before Purchase (Mean)
Decide on typeof vehicle
Start visitingdealers
The process is not much different for late-model used vehicle buyers
Decide it was time to purchase
Shop vehicleson the Internet
Start activelyresearching vehicles
Decide onmodel
Purchasenew vehicle
14.9
13.8
10.9
9.9
10.1
6.9
0
Source: 2007 J.D. Power and Associates Used Autoshopper.com Study. Based to AIUs. Preliminary Data
DEALIX
Over one-third of new-vehicle buyers seriously consider only one model
Number of Vehicles Considered
34%30%
20%16%
0%
5%
10%
15%
20%
25%
30%
35%
40%
One Two Three Four or More
Loyal
DEALIX
Consumers consider multiple brands
Consumers visit an average of 6
dealerships , but they visit only one dealership per
brand
Base: Total Respondents (550); Those RespondingQS6 Please select the statement that best describes your consideration of each make listed below. QS7 How many dealerships did you visit for each mak e?
Yahoo! Search Marketing Proprietary and Confidentia l. © 2007. All Rights Reserved.
DEALIX
Geographic area of consideration grows
68% of consumers are not willing to travel more than
20 miles
32% of consumers are willing to travel farther than
20 miles
A third of consumers will drive more
than 20 milesfrom home
Base: Total Respondents (546)** Don’t know responses removedQS8 Again thinking about the dealerships you visited , think about how far each
dealership was from your home. In miles, please tel l us the distance between your home and the farthest dealership you v isited for each make.
Yahoo! Search Marketing Proprietary and Confidentia l. © 2007. All Rights Reserved.
DEALIX
Key Insights for Your Dealership
> All customers are “internet customers”
> 3rd party leads are essential to reach 20-25% of shoppe rs
> Many shoppers have a different timeline than your s ales team
> You only have one shot to win over a shopper
> Excellent lead management practices increase close rates 2-3X
DEALIX
Overall conversion is steady
45% of leads did not convert
55% of leads converted
Based on registration information supplied by R. L. Polk & Co.Sales/leases have been adjusted for matching effici ency by a factor of 1.36, which represents a 73% historical match rate
The Cobalt Group, Inc. Proprietary and Confidential . © 2007. All Rights Reserved.
One Million New Car Leads
DEALIX
Lost opportunity is still high
90% closed at a dealer other than the one the lead was sent to – “lost opportunity”
Based on registration information supplied by R. L. Polk & Co.Sales/leases have been adjusted for matching effici ency by a factor of 1.36, which represents a 73% historical match rate
Sold at “intended”dealership
The Cobalt Group, Inc. Proprietary and Confidential . © 2007. All Rights Reserved.
DEALIX
All “missed” sales
Based on registration information supplied by R. L. Polk & Co.Sales/leases have been adjusted for matching effici ency by a factor of 1.36, which represents a 73% historical match rate
Sold at “intended”dealership
The Cobalt Group, Inc. Proprietary and Confidential . © 2007. All Rights Reserved.
DEALIX
Too many leads go unanswered
2007
Overall responsiveness 68.6%
Response time average (hrs) 7.1
Quality of responses:
Answered the shoppers questions 28.6%
Use brand or product highlight 25.5%
More than 30% of leads going unanswered.
2007 Cobalt National eMystery Shop, Base: 2,111
The Cobalt Group, Inc. Proprietary and Confidential . © 2007. All Rights Reserved.
DEALIX
Lead response time is slow
2007
Overall responsiveness 68.6%
Response time average (hrs) 5.4
Quality of responses:
Answered the shoppers questions 28.6%
Use brand or product highlight 25.5%
20% of consumers want a response within 4 hours or they’ll go someplace else.*
2007 Cobalt National eMystery Shop, Base: 2,111* “Cars Online 06/07: Understanding the Dynamics of Consumer BuyingBehavior and Customer Loyalty” CapGamini
The Cobalt Group, Inc. Proprietary and Confidential . © 2007. All Rights Reserved.
DEALIX
Poor lead handling contributes to brand defection
QV5 - Those who said they purchased a different make /brand than submitted an inquiry about (301) Which of the following reasons describe why you purchased another make/brand than you submitted an online inq uiry about?
Of those that switched brands, 23% did so because of poor dealer interaction
Why did you purchase a different brand than you sub mitted an onlineinquiry about?
The Cobalt Group, Inc. Proprietary and Confidential . © 2007. All Rights Reserved.
Poor or no response
Bad dealer experience
DEALIX
Quality of lead response is poor
2007
Overall responsiveness 68.6%
Response time average (hrs) 5.4
Quality of responses:
Answered the shoppers questions 25.0%
Use brand or product highlight 25.5%
2007 Cobalt National eMystery Shop, Base: 2,111
The Cobalt Group, Inc. Proprietary and Confidential . © 2007. All Rights Reserved.
DEALIX
eMystery National Shop 2005 vs. 2007
2005 2007
Overall responsiveness 69.7% 68.6%
Response time average (hrs) 6.5 5.4
Quality of responses:
Answered the shoppers questions 25.9% 25.0%
Used brand or product highlights 30.4% 19.5%
2007 Cobalt National eMystery Shop, Base: 2,1112005 Cobalt National eMystery shop, Base: 3,576
The Cobalt Group, Inc. Proprietary and Confidential . © 2007. All Rights Reserved.
DEALIX0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
0-30 days 31-60 days 61-90 days 91+ days
High Performering Dealers Low to Avg Performing Dealers
The Impact of Dealer Lead ExecutionCumulative Close Rates vs. Lead-to-Close Time
2X
3X
DEALIX
Key Insights for Your Dealership
> All customers are “internet customers”
> 3rd party leads are essential to reach 20-25% of shoppe rs
> Many shoppers have a different timeline than your s ales team
> You only have one shot to win over a shopper
> Excellent lead management practices increase close rates 2-3X