Automotive Marketing Research Study by Dennis Galbraith
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© 2005 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. The Future of Automotive Internet for AAISP Dennis Galbraith, Senior Director
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Automotive Marketing Research Study by Dennis Galbraith presented to the 1st Digital Dealer Conference in 2006
Transcript of Automotive Marketing Research Study by Dennis Galbraith
© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
The Future of Automotive Internetfor AAISP
Dennis Galbraith, Senior Director
2© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Automotive Internet Usage Among New-1 vs. Used2-Vehicle Buyers 8-Year Trend
25%
40%
54%60% 60%
64% 64%67%
14%
26%
34%
43%47% 47%
54% 53%
0%
10%
20%
30%
40%
50%
60%
70%
80%
1998 1999 2000 2001 2002 2003 2004 2005
New-Vehicle Buyers Used-Vehicle Buyers
2Based to total used-vehicle buyers. Source: J.D. Power and Associates 1998-2005 Used Autoshopper.com Studies
1Based to total new-vehicle buyers. Source J.D. Power and Associates 1998-2005 New Autoshopper.com Studies
3© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Internet Impact on Car Buying Purchase Decisions
Internet Impact on Purchase Decisions
4%
4%
4%
8%
9%
11%
6%
7%
8%
13%
15%
13%
12%
26%
22%
21%
11%
10%
0% 10% 20% 30% 40% 50% 60%
2003
2004
2005
2003
2004
2005
Big ImpactSome Impact
Based to all New-Vehicle Buyers
DealerSelection
LenderSelection
4© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Internet Impact on the Different Purchase Decisions
Internet Impact on Purchase Decisions
25%
26%
27%
24%
23%
26%
24%
25%
25%
27%
27%
25%
52%
53%
50%
49%
51%
49%
0% 10% 20% 30% 40% 50% 60% 70% 80%
2003
2004
2005
2003
2004
2005
Big ImpactSome Impact
Based to all New-Vehicle Buyers
Price Paid/ Offered
Make/ModelSelection
5© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Most Influential Consumers Are Automotive Internet Users
• 72% of auto-enthusiast magazine readers are AIUs
• 74% of new-vehicle buyers who are frequently asked about vehicles by others are AIUs
• 75% of “Auto Experts” are AIUs
Based to all new-vehicle buyers
6© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
The Internet Is Vital to Buyers Under 40
• 80% are Automotive Internet Users
• Internet impacts their decision making– 67% impacted in their make/model selection– 64% impacted in their price paid/offered decision– 33% impacted in their dealer selection
Based to all new-vehicle buyers under 40 years of age
7© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Primary New Online Buying Services
Dealers Cost Per Sale for Online LeadsPrimary New
0%
5%
10%
15%
20%
25%
30%
25 75 125 175 225 275 325 375 425 475Dollars Per Sale
Perc
ent o
f Dea
lers
Median$140
Average$220
12%$500+
8© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Member Services
Dealers Cost Per Sale for Online Leads Member Services
0%
5%
10%
15%
20%
25%
30%
25 75 125 175 225 275 325 375 425 475Dollars Per Sale
Perc
ent o
f Dea
lers
Median$125
Average$172
7%$500+
9© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Primary Used Online Buying Services
Dealers Cost Per Sale for Online LeadsPrimary Used
0%
5%
10%
15%
20%
25%
30%
25 75 125 175 225 275 325 375 425 475Dollars Per Sale
Perc
ent o
f Dea
lers
Median$160
Average$261
15%$500+
10© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Classified Advertisement
11© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Advertisement or Product Demonstration?
12© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
New-Vehicle Online Purchase Funnel
Total New-Vehicle Buyers
100%
New-Vehicle AIUs67%
RequestedReferral
21%
Sourced Online12%
33%Did Not Use Internet for car shopping
68%Selected a dealer and went to store without
submitting a lead
45%Bought from a different dealer
Base = Total Buyers
13© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Other Links from Site to Store
• Instant Message
• Phone
• Video Phone
• In Person– Ups– Appointments
14© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Request for Test Drive Appointment
• Description of Sales People– Picture– Background– Video
• Calendar Selection
• E-Mail Confirmation
• Phone Confirmation
15© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
The Internet’s advantages resemble the consultative selling process
• Listening
• Matchmaking
• Demonstrating
16© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Listening
• Browse– Navigation– Naming Conventions– Speed
• Search– Language rather than word
17© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Honda: “Does Ridgeline come in Red” produces Redrock Pearl Ridgeline
18© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Matchmaking
• Product selector tools (there are now 300 plus models to choose from) – Attribute based queries– Others like you– Lifestyle matching
19© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Online Product Demonstration
• What features are available?
• What benefits does it provide?
• How does the product work?
• How does the product compare?
• Why should I care?
• How can I be sure?
• What is the value proposition?
20© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Lexus offers links to videos to learn about safety features.
Why this feature is effective and how it can be improved:•Audio and video help shoppers understand the functionality of the features•Safety benefits are clearly explained•Text is easy to understand and avoids technical jargon
Demonstrate Vehicle Safety
21© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Demonstrate Superiority of the Vehicle
Ford uses video to distinguish the F-150 from its competitors.
22© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Demonstrate lifestyle adaptability and payload versatility of the vehicle
Land Rover demonstrates cabin seating and cargo space by displaying actual people in the vehicle.
Why this feature is effective and how it can be improved:• Allows for visualization of passenger seating and cargo capacity
23© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Dealer Site Activity
Dealership Web Site Communication Funnel
Visited a Dealer Web Page¹ Topics Discussed by E-Mail³
¹Based to Total AIUs²Based to Total AIUs Visiting a Dealer Web Site³Based to Total AIUs E-Mailing a Dealer (multiple response allowed)
E-Mailed to Dealers²
7%
67%
77%
Others
Ask if Vehicle in Stock
Price Quote on a Vehicle
Yes 51%No 49%Yes 48%No 52%
24© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
David McDavid - 8 Brands
25© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Bob Howard Auto Group – 16 Brands
26© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
PowerDirect.com – 25 Brands
25 Brands
27© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Galpin – 8 brands sorted by price or body style
28© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Integration
Offline Online In Store
IntegratedAdvertising
IntegratedSales
Engagement: Advertisement Vehicle Sales Person
29© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Online Marketing Changes to Come…
• Current Practices – Leads– Sites ask
customers to choose– Advertising
by ad medium– Get customers
into the store– Configure exact
vehicle
• Future Successes– Appointments– Sites listen to
customers and help– Advertising by
relevance– Get customers
engaged– Configure to a range of
vehicles
30© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Parting Advice
31© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Media Usage Is Changing
Be sure your advertising budget moves in the same direction the consumer is moving.
32© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Communicate the Way the Customer Wants To
• Phone
• Instant Message
• Appointment
33© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Greater Transparency and Disclosure
Don’t expect the next buyer to settle for less information than you did when you bought the vehicle.
34© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Know Thy Product.
Consumers have never been more informed. Salespeople need to be product professionals even if they are new to the job.
35© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Work Every Lead
Work every lead as though the person who just entered your electronic store mattered as much as the one looking you in the eye.
36© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Great Dealer Sites
Build a great dealer site and drive traffic to it with options like local search.
37© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Internet Is Not Just For Incremental Sales
• Parts
• Accessories
• Repair
• Maintenance
• Stimulate Referrals
• Repeat Sales
38© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Read or Listen
• www.OnlineAutomotiveReview.com– Dealer Edition Online Automotive Review– Fixed Operations Edition Online Automotive Review
• Digital Dealer
• Wards Dealer Business
© 2005 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.
Thank You
Dennis Galbraith, Senior Director
805-418-8221
