In recent months, some OEMs have instructed their dealers to remove CTA buttons with payment calculation tools which are powered by vendors who are NOT in the authorized OEM digital retailing program. While I understand the OEM’s desire to move all dealers to one consistent payment process, the mandates are having some unintended consequences.
There is also a fair argument from digital retailing vendors in the OEM programs which have to share their monthly revenue with the OEM program managers. Why should they be paying a percentage of their sales each month when the program allows vendors who are paying less commission?
But here is the rub:
Dealers are seeing less leads when consumers are forced to go through a full digital retailing experience.
The mandate would have made more sense during the COVID-era hype which tried to force dealers to believe that consumers wanted to purchase their next vehicle completely online. The mandate makes less sense today, when you consider dealers are removing full digital retailing platforms in favor of more targeted CTA buttons.
There are always exceptions to any trend.
The use of any technology in automotive retail often comes down to leadership vision, training, and accountability. If a General Manager has a clear vision for improving the online retailing experience, these stores may have great success with a single digital retailing tool, online and in the showroom.
Dealers who want a fully connected platform are finding success when partnering with technology companies like CarNow and AutoFi because of their integration, training, and support. Bolting a DR tool on a website is not a viable solution for modern retailing growth.
But what if you don’t buy into the DR hype?
I speak often with dealers who feel that consumers do not want to fully utilize an online process to purchase their next vehicle. In addition, it’s clear that since so many consumers are underwater with their loan-to-value ratio, even if they wanted to transact online, their deal needs to be handled in-store.
Why should dealers pay for software that is not aligned with the consumer path to purchase?
I’ve been closely working with some dealer groups to optimize their online shopping experience and also to control online experiences using data from the CDP. This has forced me to look at Form Completion Rates (FCR) and effective conversion rates across many vendor tools.
I’m not the only one who thinks that some of the digital retailing tools need to be redesigned or removed. Here are two independent voices that confirm what I am seeing in the data:
Here is a quote from Tom Moore, COO of the Morgan Auto Group
“The data I see does not support that a large percentage of consumers want to fully purchase a car online. There are too many decisions related to a vehicle purchase and the questions which consumers have are often best resolved in the showroom, or in conversations with a member of our variable operations team prior to their showroom visit. Consumers want information on their trade or what they can afford as a payment online, so we need to provide simple, fast tools for them to use. The highest converting retail tools we have tested are those from TradePending .” – Tom Moore
TradePending has taken a different approach for converting online shoppers to customers with their powerful three-button CTA stack. Time and again, I have seen that the conversion rates on their trade and payment tools far exceed industry trends.
I also spoke with Erin Langston who is a consultant to many dealer groups seeking to optimize their online conversion rates. Here is what she shared:
“I have seen a decline in leads from traditional DR tools. The payments CTA from TradePending is more aligned with consumer shopping patterns because the consumer does not feel that they are committing to purchasing a vehicle. These leads also have a high closing rate.” – Erin Langston
So maybe it’s time for OEMs to rethink their mandates which look counterproductive when dealers need all the opportunities they can get to sell cars.
Modern retailing is in flux – CDPs will help
I’m hoping that as dealers invest in Customer Data Platforms (CDP), the online website experiences will be more personalized and relevant for return customers. Right now, most websites treat returning customers as new consumers even though they have so much data on file that could be used to make applicable offers and align the process with the customer’s needs.
Online conversion rates will soar when consumers feel recognized and appreciated for their loyalty.
Dealers who master their own first-party data have the best shot at retaining and converting online shoppers.
