Automobile dealers have been on a roller-coaster ride over the past five years—an up-and-down cycle that has included pandemic-induced showroom closings, price inflation and inventory shortages that have frustrated car buyers. Perhaps unsurprisingly, J.D. Power reported that in 2022, customer satisfaction with the new-car buying process declined for the first time in a decade.
How can dealerships get back on track to create a great experience for customers? And how important is it?
Ask Andrew Wiley, owner of Consumers Auto Warehouse, a used-car dealership in Staunton, Virginia. As car buyers started relying more on internet research and online shopping, particularly post-pandemic, Wiley saw the writing on the wall for his 24-year-old dealership.
“With all the information available online, used cars are becoming as much of a commodity as new cars,” he said.
Wiley wanted to make sure customers did not see his dealership as the same as all the others.
“Shoppers can see photos, details, prices—and at some point, everything looks the same,” he said. “We did not want to allow ourselves to be turned into a commodity, so we doubled down on the customer relations part and spent more time trying to differentiate our dealership.”
At Consumers Auto Warehouse, that customer focus means personalized communications from the moment someone makes contact with the dealership—including handwritten thank-you notes and birthday cards. It means creating social media content that is relevant and directed specifically at the community, ranging from suggesting school field trip destinations to building community around friendly games related to upcoming sporting events using square pools.
Connecting with the community is key. And a customer focus also means deploying a customer relationship management (CRM) system to handle as much information as possible about the dealership’s buyers—then using that information to create meaningful, appropriate messaging, even after the sale.
More than 60% of his dealership’s business is repeat and referral, Wiley said. And he gives a lot of credit for that to his customer-centric approach. Industry veterans say that to build that kind of loyalty, dealers need to start with a sales process designed around the way today’s shoppers want to buy.
“Too often we still hear dealers talking about ‘controlling the customer,’” said Bill Reid, manager – special projects for indirect financier Credit Acceptance and himself a former dealership executive. “That’s old-school; it means getting customers to go through the process the way the dealer wants, rather than the way the shopper prefers.”
To really lean into the customer-focused approach, dealerships should streamline the buying process to make it less abrasive and stressful for customers, Reid said. Industry sales veteran Ari Robinson agrees. To build customer loyalty, dealers must shift how they think about working with shoppers. “Dealers are so used to providing a transaction, but in today’s world they should think about improving the entire experience,” said Robinson, a market area manager for Credit Acceptance.
For Robinson, the difference between transaction and experience begins when a car shopper first contacts the dealership. A warm and immediate first contact—whether that’s in person, on the phone, via text or online—is the first and critical step in that person’s car-buying experience. If you get that experience right, you’re on the path toward establishing a relationship with the customer. “Rapport is king,” Robinson said.
What else does a customer-centric experience entail? According to these experts, dealerships should consider:
1. Upfront education for the customer:
Successful salespeople take the time to first explain to the customer how the process will work at their dealership. Reid and Robinson recommend explaining how the dealership operates and outlining the purchase process—before the customer starts looking at vehicles.
“The best dealers I’ve observed take the time to engage with the customer, set expectations and outline the process right off the bat,” Reid said. “At that early point, it’s also great to have a manager or finance manager come by to introduce themselves. All of this helps put the customer at ease.”
2. A needs-based sales approach:
Besides explaining the dealership’s process, that upfront discussion can also give the salesperson insight into the customer’s personal situation. Taking a needs based approach means gathering information: Asking how the customer drives, how much the shopper wants to pay, what features are important. Those needs help the salesperson direct the customer to appropriate vehicle choices.
“Ask the customer, ‘What’s got you looking for a vehicle?’ Make checklists and write up questions the salespeople can ask,” said Eric Macedo, a Credit Acceptance market area manager. “Once you have the information, tell the customer, ‘Let me show you cars that would fit your needs.’
“People often come into a dealership with an idea about what they want, but sometimes the salesperson needs to say, ‘That may not be the best or most affordable vehicle for your needs.’”
3. Transparency:
Today’s customers expect transparency more than ever—in pricing, vehicle details and F&I options. It’s up to the dealership to provide clear and consistent information so the customer knows what to expect. That includes consistency between what’s posted online and what’s said in the showroom or on the lot.
At Consumers Auto Warehouse, Wiley said: “Transparency is baked into our culture. Occasionally we sell a car that has a problem that, for one reason or another, we don’t fix. Maybe it’s the power on the passenger seat, for example. Or we had a hailstorm that left tiny marks in the paint. We tell people that upfront. It didn’t cost us to share that information, and it builds trust with the customer. It doesn’t pay to hide anything.”
4. A seamless hybrid or omnichannel purchase process:
Today’s car shoppers are likely to switch back and forth between online research and in-store experiences like test drives. The best process needs to move fluidly with customers between all of those channels, to satisfy their taste for convenience. “Whether the customer starts online and finishes the purchase in store or does it totally online—and all options should be available—there should be synergy so that in every aspect you can give the customer a high level of service,” Reid said. Part of that is having continuity so that the customer doesn’t have to start from scratch when moving from online to in-person interactions.
5. Early, regular and clear communications:
That starts as soon as the customer makes contact with the dealership and continues post-purchase. Keep the communications as personal as possible, said dealer Wiley, including post-purchase emails. His staff maintains a lot of information—customer names, family members, interests, birthdays, driving preferences—that they use to tailor their email messages.
“A lot of dealers want a quick fix. They buy a system that blasts out 10,000 emails at a time,” Wiley said. “We spend a lot of time creating our communications to be as individual as we can be with people. And that includes not just the ‘sold’ customers but also the customers we’ve just missed, too.” For instance, he said, customers with prime credit may receive car care information every six to eight weeks, while a buyer with credit issues might receive friendly tips on how to improve their credit rating.
6. The right dealership culture:
Dealership leaders know that no process, system or initiative will work without support from the top. Dealer principals and key executives are in charge of creating a culture that focuses on the importance of the customer journey and supplying regular, ongoing and consistent training to reinforce this with the staff.
Finally, remember that the sales process doesn’t end when the customer drives away with a new vehicle.
“I’m huge on reviews,” Macedo said. That means sending out surveys for customer feedback and capturing reviews everywhere, including placing a sign on the reception or service desk with a QR code to direct shoppers to the dealership’s Google review site.
“Use every opportunity to ask: How was your experience? What can we do better? Make sure the customer is 100% satisfied,” Macedo said.
“Most people are excited about buying a car; take a photo of them and post it online.”
At Consumers Auto Warehouse, Wiley’s team hangs poster-size canvas prints of customer photos and testimonials on the walls of the dealership. A big-screen monitor also displays rolling reviews. That way, he said: “The first thing someone sees when they enter the dealership is what their friends and neighbors are saying about us. That is something that puts people at ease.”
Reid at Credit Acceptance takes it a step further, saying dealers should periodically audit the sales experience to see what the dealership looks like from the customer’s perspective. That might mean deploying secret shoppers, hiring a chief of sales experience or using a CRM platform that records incoming calls—and having the staff learn by listening to how well customers are handled.
“A customer service manager tends to manage problems when they come in,” Reid said. “What many dealerships don’t have is a team member focused on creating a great customer experience. I’d suggest that a dealer create that position—so that the person’s only job is keeping a finger on the pulse of what customers are saying, training employees, reading through CRM entries and working to strategically improve sales and service.”
The bottom line for success? Said Reid: “Be obsessed with the customer experience.”
