In carsales’ first comprehensive examination of sentiment towards dealers since the beginning of the pandemic, Australian car buyers didn’t hold back.
The Australian car market is running hot with new car sales rebounding, used car prices appreciating and a slew of enticing new models destined to hit Australian shores before year’s end.
But exactly how are these and other factors affecting Australian car buyers’ relationships with dealers?
And what are the key messages the auto industry needs to hear and action?
In carsales’ first comprehensive examination of sentiment towards Australian car dealers since the beginning of the pandemic, Australian car buyers didn’t hold back. The survey, which polled over 9000 car buyers between January 14–16, 2021, generated strong responses on everything from when they intend to buy, to their experience of purchasing a car from a dealer.
But overwhelmingly two key factors were clear from the research:
1. CONSUMERS WANT TO BE DELIVERED ‘DEALS’
2. AND THEY WANT TO ‘BUY NOW’
To help new and used car dealers capitalise on these key findings, we enlisted the assistance of Ren Blanning, Head of Business Consultancy at carsales and from the creative agency built on behaviour, Hardhat, Behavioural Science expert Dan Monheit.
“When it comes to buying a car, promotions and deals are a part of the language Australian car buyers have come to expect,” Blanning starts.
“A consumer’s perception of the value is what sells cars, and the ability to convey this online, in your carsales listings, has never been more important.”
“Once, dealers communicated the value proposition face to face in the showroom. Now, the landscape is digital. Consumers are now looking at dealer inventory on carsales well before they meet any salesperson face to face and for dealers— they’re more qualified prospects as a result.”
Blanning continues: “So ask yourself: Do my online pricing, photography and comments convey why my vehicle is the best value car in its competitive set on carsales? And does my carsales listing communicate clearly why my business is the best for the consumer to buy from?
“If you can nail these points in your carsales listings, your value proposition is crystal clear and you will be a step ahead of your competition.“
Blanning also notes the importance of consistent communication and engagement when following up with a sales prospect.
“Once you’ve connected with a sales prospect, it’s critical to align all communication and engagement with your carsales listing.”
“Salespeople must understand the vehicle and its position in market, and be able to clearly communicate its value proposition to the sales prospect over email, on the phone, by text, and on the showroom floor.”
Monheit says that the thrill of a good, on-the-spot deal can be too good to refuse.
“Despite cars being the type of purchase we hold on to for years, getting a good deal ‘right now’ is still highly motivating. As humans, we’re wired to value short-term incentives over long-term ones,” explains Monheit.
“This is a concept referred to in Behavioural Science as ‘Temporal Discounting.’ “As car buyers, this means that the thrill and endorphins that come with nabbing a good deal today can easily override our more pragmatic, long-term thinking,” Monheit explains.
SO HOW DO YOU MAKE THIS WORK FOR YOU?
Monheit continues: “Short-term incentives can often be more motivating than long-term ones. For example, offering customers a $1000 gift card upon purchase can have much more appeal than offering two years of free servicing—even though the servicing is likely worth far more.
“Where possible, look for ways to provide customers with a feeling of instant gratification. That helps them scratch the immediate itch.”
Blanning: “The art and skill of conveying value via your online merchandising are critical. It is an area that requires focus, dedication and the right resourcing.”
“Invest in professional photography that shows off the unique attributes of your inventory. Upload a branded video to your carsales listings that shows off the quality of your showroom and people, and of course, take the time to craft comments that resonate with consumers emotionally… Spell out clearly why they wouldn’t want to shop for a car anywhere else.”
It’s clear that apprehension towards using public transport, interest in domestic auto-based travel and flexible work arrangements are fuelling demand for cars. In turn, the carsales survey delivered the highest measure of ‘urgency to buy’ recorded since the onset of the pandemic in early 2020.
“Speed is of the essence for dealers when consumers are highly motivated to buy a car,” says Blanning.
“A slow follow up to an enquiry will simply see the consumer move on to the next car and the next dealer.”
Blanning speaks from recent personal experience, highlighting how slow follow up influenced her own car-buying journey in January.
“I purchased a new car myself in January. The first two dealers I engaged promised to call me back with details and pricing—they never did.
“I purchased from the third dealer I engaged with, who delivered me with speed of service and made the transaction easy,” she explains.
“Ensure that you have the processes in place to acknowledge and follow up enquiries submitted outside of your business hours. Two out of five enquiries to dealers are submitted outside of the traditional 9am–5pm.
“Then focus on cutting down the time it takes to convert an enquiry to an in-person, showroom appointment,” Blanning advises.
Monheit highlights the effect of the COVID-19 pandemic on consumers’ desire to ‘buy now’.
“With big-ticket items like overseas travel off the list, and the heightened demand for personal safety and hygiene, it makes sense that Aussies are buying cars as they transition to ‘COVID-normal’ lifestyles,” he says.
“Much of this can be pinned down to the Projection Bias; our tendency to assume that our future selves will have the exact same set of priorities and preferences as our current selves.
“While it’s inevitable that eventually, many of us will be back on public transport, back in the office and, hopefully, back overseas for an annual holiday, our current selves have a very hard time believing this will ever be the case,” ends Monheit.
SO HOW DO YOU MAKE THIS WORK FOR YOU?
Blanning: “Auto responses, such as those via SMS and email, are a quick and cost-effective way to acknowledge an enquiry and set the expectation that you will be in contact as soon as possible. “And if you’re overloaded with enquiries, consider investing in an AI solution like Conversica. This can nurture prospects with natural two-way conversation until it’s time for your sales team to take over and organise a showroom appointment.
Monheit: “Projection Bias provides a golden opportunity to capitalise on motivation in the moment. People will make all sorts of decisions—many of them long term—based on the the assumption that they’ll always feel exactly as they do, right here, right now.”
Further reading:
Tesla dominates Australian EV sales
Overseas success highlights local CPO opportunity
From the carsales CEO – March 2021
