I bought a car online. There were parts of this digital commerce experience that were good, bad and ugly, but it was possible, which I appreciated as a consumer and a research analyst. If you’re a seller involved in considered purchases, like selling cars or industrial equipment, this should serve as a reminder that now, or in the near future, more of your customers will make those considered purchases through digital commerce channels. Or, they’ll rely on those channels to research their options, compare you to your competitors, evaluate features and functions, configure a product or service, request a quote, assess pricing, apply for financing, or place an order, even if they come into a dealer or a distributor or reach out to a salesperson to seal the deal.
Here’s why digital commerce matters in a considered purchase process…
While many automakers and dealers still try to steer consumers down the traditional path to purchase, a growing number of players embrace non-traditional and more digital methods of targeting, engaging and converting car buyers. For years, automakers have given consumers the ability learn about the brand, make and model and even configure their unique vehicle on the manufacturer website. Unfortunately, this process typically ends with an MSRP, list of and link to local dealers and a trip to the car lot. That’s where consumers often find themselves at the mercy of a salesperson, hoping to find what they wanted in stock and haggling over price while clock ticks.
In 2007, J.D. Power and Associates Sales Satisfaction survey found consumers spent an average of 187 minutes, over 3 hours, at a dealership when making a purchase. And their satisfaction decreased the longer they were there, specifically after 177 minutes. This is bad news for dealers who depend on the traditional sales process. But are you ready for worse news? This number, representative of consumers’ patience with dealers, has declined further in recent years. In 2015, AutoTrader Dealer Sourcing Studies showed satisfaction is now highest in the first 90 minutes and begins to decline after that, dropping to below average satisfaction levels after 150 minutes, or 2.5 hours.
But what if you’re not a car dealer?
While the process for making a considered purchase varies by industry and company, car buying provides an applicable example of how buyers can use digital technology to educate themselves, plan and prepare for the buying process. For buyers, being better educated can expedite the sales process and mitigate the risk of making an uninformed or emotional decision. For sellers, digital commerce and digital customer engagement can shorten the sales cycle and improve the ability to orchestrate and track customer behavior and measure the impact of different marketing and sales tactics on lead to sales conversion. But digital channels also lower switching costs, making it easier for a prospect to shift between competitors than in traditional sales channels.
Then, why bother?
Two reasons the rewards outweigh the risks of digital commerce and customer engagement
- You may not have a choice. Intermediaries are increasingly offering customers access to content and comparison tools. If you don’t offer similar resources or work with those intermediaries, you risk having your brand, products, services and pricing misrepresented to potential buyers. In my case, TrueCar enabled me to comparison shop based on location, available inventory, price and promotion. This information wasn’t always available on manufacturer or dealer websites, but was instrumental in helping me choose a car and a dealership.
- If you won’t do it, your competitors will. Digital disruptors in the auto industry, like Tesla and Audi, were among the first to use digital technology to engage car buyers online and offline. In the insurance industry, companies like Esurance and Progressive offer an online buying process and tools, like price comparison reports, to help buyers educate themselves about a considered purchase. Even if you don’t sell cars or insurance and you target a different type of buyer, these types of experiences have become the new standard.
So what do you do?
Build three core competencies to enable digital commerce for considered purchases
- A customer-led buying process. The good part about buying a car online was the flexibility of the dealer I ultimately bought from, which differentiated them from other dealers. They were willing to negotiate pricing, confirm inventory availability and schedule a test drive via email. Use digital to enable self-service. Encourage sales to respect customer preferences.
- A digital product catalog and rich product content. The bad part of the online buying process was the hand-off from manufacturers’ sites comprised of rich content and immersive experiences to dealer sites that showed available inventory but lacked 360-degree video, high quality images or detailed product information. Use content marketing to enrich commerce.
- A common system for tracking buyer interactions. The ugly part of the buying experience was the ONSLAUGHT of emails, mobile messages and phone calls trigerred by my online vehicle search. Post-sale, I got the same survey request three times. Use CRM, marketing automation or campaign management tools to orchestrate multichannel interactions.