This is the story of how classic and cutting-edge qualitative research methods were used to diagnose the automotive path to purchase and to enhance the dealership experience.
What We Did
In the Summer of 2014, Doyle Research and DrivingSales, an automotive dealership consulting and training company, conducted a comprehensive research program to:
- Understand actions at the dealership that influence consumer perceptions.
- Define key experiences that lead to engagement or kill the opportunity.
- Identify what car shoppers want in a retail experience.
Method(s) to the Madness
Buying a car is a big deal. It is a complex, lengthy and emotional process. There are many phases. It’s a lot of money. To understand the totality of this experience, we employed a mixed-method qualitative research design which included both classic and cutting-edge methods. This allowed us to understand the complexity of the process and to diagnose the path to purchase.
Here are the qualitative methods which were used, and to what end:
Webcam Interviews (Cutting-Edge Method)
When people buy a car, where do they begin? Online. So we conducted six webcam interviews with participants who were in the research phase of car-buying. They shared their screen and we were able to see exactly what they were doing online. Through this method, we saw what kind of sites they accessed, in what order, and the reasons for their behavior.
Geo-Storiessm (Cutting-Edge Method)
As seasoned researchers know, there are two ways to conduct qualitative interviews. The first is via a pre-recruit. An example of this method is a shopalong, in which we recruit participants who plan to buy an item within a specified time interval. We then meet them at a specified retailer and watch them shop for the item. Although this method has many advantages (and, in fact, we used it ourselves in this research), these retail excursions are semi-staged. They are not authentic. The second way to conduct qualitative interviews is via an intercept, in which we ask shoppers whether they have a moment to talk with us. The problem here is that in many cases people refuse to participate because they (understandably) dislike being interrupted.
To overcome these hurdles, we invented Geo-StoriesSM, real-time, geo-validated qualitative interviews conducted at the moment of product experience – the research equivalent of lightning in a bottle. This method enabled us to intercept auto shoppers who had gone to the dealership that day on their own accord and who agreed to talk to us then and there.
In-Home Ethnographies (Classic Method)
We conducted 18 ninety-minute in-home ethnographies with automotive shoppers who were either close to purchasing a car or immediately post-purchase. The three markets were San Diego, Minneapolis and suburban New York City. In-homes enabled participants to relax, get comfortable and delve into all the nuances, emotions and complexities of the process and purchase. Several women provided tremendous depth about how and why they were intimidated by the process. We heard loud and clear that some car shoppers want to avoid car salespeople as much as possible. Several questioned what value the dealership offers and wanted to buy online. All of these interviews were videotaped, which allowed us to create compelling consumer testimonials later used for dealership training.
How It Works
Through precision geolocation-tagging, participants in a mobile panel received a text message when they were at a car dealership. After a short mobile survey determined that they were there shopping for a new car (as opposed to getting their car serviced or buying a used vehicle), we interviewed them by phone. We also asked them to take a selfie and to snap a few pictures of the dealership they were visiting. Through this method, we were able to obtain authentic, in-the-moment insights about the process of buying a car – why they were there, what they thought and what they liked and didn’t like. A follow-up online bulletin board group was conducted a few days later to obtain additional feedback.
Dealership Drive-alongs (Classic Method)
For six of the in-home ethnographies, once a rapport had been established with the participant, we accompanied them to the dealership and tagged along as they shopped for a car. After the shop-along (or drive-along, really) we asked what they liked, what they didn’t like and how the experience could be improved. During one in the New York area (which lasted three hours), Tony, shown below, actually bought a car!
Quantitative Research Follow-Up
Following the qualitative research, a quantitative research firm conducted an online survey with 1,300 new vehicle purchasers by. Principal components analyses (PCA) were run to determine what was important in considering dealerships during the pre-shopping, active shopping and post-purchase phases. This analysis provided dealers with specific, actionable guidance on how to approach different types of buyers.
Many new vehicle shoppers find the car-purchasing experience stressful and unpleasant. Over half indicated that they would buy new cars more frequently if it weren’t such a difficult and intimidating process. We discovered three main roadblocks:
- Great expectations
- Communications breakdown
- A serious lack of trust
The Zappification of Retail
Most of the people we talked to believe that dealerships have gotten slightly better over the years. The problem is, other verticals have gotten substantially better. Other categories (think Zappos) provide unfiltered reviews, pricing transparency and a low-pressure retail environment. Car dealerships don’t. A number of participants questioned why they had to go to a dealership. Why couldn’t they just buy a car online? This is the new normal. Car shoppers want what other retail categories provide – convenience, fairness, control and autonomy.
The average number of customer visits to dealership before buying a car has plummeted. Ten years ago, Americans visited five dealers before making a purchase, according to McKinsey. Today the average number of visits is 1.6. And we found that in 61 percent of cases, shoppers’ first interaction with a dealership is walking on the lot. People go online, avoiding the dealerships until the last possible moment. Then they visit, and because they haven’t engaged beforehand, often have a poor experience. Here’s why.
Poor Dealership Websites
They’re cluttered, confusing, hard to navigate and shoppers don’t trust the information provided. Over half of new car shoppers don’t visit dealership websites at all. Shoppers rely on third party sites instead like cars.com and autotrader.com.
Outdated Communication Practices
People no longer want to talk to their nearest and dearest, let alone to a car salesperson. Dealership contact forms that require phone numbers and sales strategies that emphasize personal contact backfire, particularly among Millennials. The auto manufacturers don’t help, continuing to require that salespeople hit monthly quotas for phone contacts. What would help? Allowing indirect forms of communication such as email and texting.
Too Little, Too Late
The result of these barriers is that car shoppers avoid interacting with the dealership until very late in the process. And when they do visit, they often have a poor experience with a salesperson they just met
Serious Lack of Trust
The biggest problem we found is that lack of transparency has poisoned the process. Many shoppers fear being taken advantage of. It doesn’t help that car salespeople don’t ask about their needs, dealerships fail to post prices and lengthy back-and-forth negotiations often ensue. Too often, the relationship is seen as antagonistic and fraught.
Time for a Paradigm Shift
Over half of car shoppers said they would buy a vehicle more often if the process was not so difficult. Car dealerships need to rethink engagement, provide greater transparency and forge connections with new car shoppers earlier in the process. For example, see the table at the bottom of the page.
The Times, They are A-Changin’
A handful of dealerships are embarking upon a new way of doing business. Sonic Automotive has launched a program in which shoppers get a new car in 90 minutes with no haggling. Subaru of Wichita has non-commissioned salespeople and “no gimmicks” pricing. And Autonation is launching a completely online sales channel that is expected to go live by the end of this year.
So let’s return to our objectives. This research is being used to design training programs for car dealerships. Will car salespeople be motivated by a bar chart or a customer satisfaction number? We think not. Car salespeople will, however, be motivated by authentic footage of real car buyers talking about their concerns. We hope this article will encourage readers to believe in the power of qualitative research. Long the “ugly stepchild” of quant, particularly in this era of Big Data, qualitative can generate tremendous insights about complex, emotional topics such as the automotive path to purchase.
What To Do
Visit the lot when it’s closed to avoid car salespeople.
Provide a self-guided sales channel for car buyers early in the process in which they can tour car dealerships without a salesperson, perhaps with the assistance of a tablet or smartphone.
Don’t trust the salespeople they just met at the dealership.
Provide car shoppers with an easy way to connect with a salesperson prior to coming in. Prominently list salesperson bios and email addresses on the website.
Don’t want to talk to a salesperson.
Stop requiring phone numbers on dealership websites and allow shoppers to communicate indirectly with dealerships.