Not that long ago, the idea of buying a car on the Internet without ever “kicking the tires” was foreign to many people. But not anymore. Online car sellers like Carvana, TrueCar and CarsDirect have become major competitors of traditional brick-and-mortar dealerships.
As a result, some dealerships are rethinking how they do business. Here are three tips that can help you compete successfully with online car sellers.
1. Deliver an outstanding in-store customer experience. About 70% of car buyers still want to visit a traditional dealership to physically inspect and test drive a car before making a purchase, according to research conducted by Capgemini, a global consulting and technology firm. This presents an opportunity to attract new customers by making sure they have a positive experience when visiting your dealership.
Given the ease of price-shopping online, a dealership’s service could be the deciding factor when customers buy a car. One way to improve customer service is to change your sales compensation structure from commission to salary with bonuses. This may provide an incentive for salespeople to focus more on delivering outstanding service and less on using hard-sell tactics that turn off many customers.
2. Make it easy for customers to browse your inventory online. Many customers will want to check out vehicles on your website before coming into the store for a test drive. Your website should use responsive, interactive technology that gives customers a clear view of available vehicles. This includes 360-degree vehicle photos and the ability to “open” the doors and inspect the interior.
Also be prepared to interact with customers online. This might require dedicating and training an employee to assume the role of a digital car consultant who can answer customers’ questions online and help walk them through the digital shopping experience.
3. Switch to a fixed-pricing model. Most online car sellers use a fixed, no-haggle pricing model that appeals to buyers who don’t want to go through the traditional price negotiation process with a salesperson. This is especially true for many younger car buyers who prefer shopping for a car online and want to make a fast purchase decision.
Adopting fixed pricing can lead to other benefits as well, such as higher customer satisfaction, better online reviews, higher gross sales, and the ability to attract and retain a younger and more diverse salesforce.
Competition from online car sellers isn’t going away — if anything, it’s likely to increase. So it’s time to formulate strategies for how your dealership will compete in the future.