Automotive Retailing Insights: First Contact with Dealerships More Important Than Ever; Study Finds 75% of Consumers Who Contact Dealerships Plan to Buy Within Three Weeks

Rhea-AI Summary

Marchex (NASDAQ: MCHX) has published a study revealing that potential car buyers in the U.S. are well-informed and ready to purchase shortly after contacting dealerships. Key findings show that 75% are prepared to buy within three weeks, while 91% prioritize trust in their choice of dealership. The study, involving 1,700 consumers and over 228,000 sales-related conversations, indicates a shift in consumer behavior due to the pandemic, with more research done online and a preference for transparent pricing. Dealerships must adapt their sales approach to meet these evolving consumer needs.

Positive

• 75% of prospective buyers ready to purchase within three weeks of contacting a dealer.
• 91% value trust in a salesperson or dealership as much as competitive pricing, indicating a focus on customer relations.
• The study's comprehensive data showcases changing consumer behaviors, providing dealerships with actionable insights.

Negative

• 71% report visiting fewer showrooms, potentially decreasing physical sales opportunities for dealerships.

Marchex (NASDAQ: MCHX), a leading conversational analytics and solutions company that connects the voice of the customer to your business, today released findings from a major study of consumers and their interactions with franchised automotive dealerships showing that potential car buyers in the United States are highly informed and are closing in quickly on a purchase by the time they make first contact with a dealer. In fact, 75% of these shoppers who contact a dealer are ready to buy a car within three weeks—but only if they feel a high level of trust with the dealership, according to the data. Furthermore, 83% of consumers are researching and qualifying dealers more than before and 71% report visiting fewer showrooms than before the pandemic.

The study, titled “Trust, Transparency and the Transaction,” finds that one of the most important keys to establishing trust is being prepared to give consumers an out-the-door price on their vehicle of choice during the first conversation. The Marchex Institute worked with Root & Associates, an automotive research and consulting firm, to uncover new data detailing how COVID-19 has impacted the car-buying process at dealerships across the U.S. since the pandemic hit, as well as other trends. The findings are the result of a large-scale, comprehensive study that included interviews with car-buyers, a survey of 1,700 in-market and near purchase or recently purchased consumers, and analysis of more than 228,000 sales-related phone conversations between consumers and franchised dealers completed in the fourth quarter of 2020. The study finds:

• 97% of consumers interviewed say they are somewhat or very serious about buying when they contact a dealer.
• 75% anticipate purchasing within three weeks of contact. Nearly 40% plan to do so within a week or less.
• 91% say trust in a salesperson or dealership is very or somewhat important in choosing who to buy from. This is equal to competitive price as a consideration and more important than lowest price.
• 39% of consumers use a phone to call or text a dealer to make initial contact, making the phone the leading channel for consumer outreach, far outpacing any other form of initial contact, including walk-ins, email, or chat.
• 71% report visiting fewer showrooms than before the pandemic. The pandemic has caused consumers to spend more time researching options online and by phone before fully engaging a dealership.
• 82% want to know how a dealership is addressing customer protection and safety during the buying process and pandemic. Specifically, consumers are interested in how often a dealership itself is sanitized as well as the cars on the lot.

A summary of the study is available here.

A NEW NORMAL FOR DEALERSHIPS

“The process of buying cars has changed profoundly during the past year. Pre-pandemic, dealerships were hesitant to discuss price before the customer came into their showrooms. In the new normal, the initial call a consumer makes to a dealership is now the make-or-break point of a sale,” said Matt Muilenburg, Marchex Senior Vice President of Automotive. “Dealers cannot operate the way they did in the past. Today, many consumers want to understand what they will pay before they visit a dealership and dealers need to be ready and willing to address that – upfront. A competitive price is one piece of building a trusting relationship. What you say, and often what you don’t, during that initial call, will define if you win the sale.”

According to the study, consumers are looking to limit their time inside a dealership because of COVID-19, and they know exactly what they want because they have spent significant time at home researching vehicles and comparing costs before contacting dealers.

“More than ever, this means dealers need to focus on transparency—they need to be trust providers,” Muilenburg added. “From the moment the consumer calls, texts or walks in the door, the dealer must be prepared to answer questions, provide details, and educate the consumer to build that critical layer of trust. The data shows that dealers who differentiate by establishing trust with the consumer earn the right to charge a competitive price and ultimately sell more cars.”

About Marchex

Marchex understands the best customers are those who call your company - they convert faster, buy more, and churn less. Marchex provides solutions that help companies drive more calls, understand what happens on those calls, and convert more of those callers into customers. Our actionable intelligence strengthens the connection between companies and their customers, bridging the physical and digital world, to help brands maximize their marketing investments and operating efficiencies to acquire the best customers.

Please visit www.marchex.com, www.marchex.com/blog or @marchex on Twitter (Twitter.com/Marchex), where Marchex discloses material information from time to time about the company and its business.

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FAQ

What are the key findings of the Marchex automotive buyer study?

The Marchex automotive buyer study shows that 75% of consumers are ready to purchase within three weeks and prioritize trust in dealerships.

How has COVID-19 changed consumer behavior in car buying?

COVID-19 has led consumers to conduct more online research and visit fewer showrooms, impacting traditional dealership interactions.

What percentage of consumers trust the salesperson when buying a car?

91% of consumers believe that trust in a salesperson or dealership is crucial when deciding where to buy a car.

What should dealerships focus on according to the Marchex study?

Dealerships should focus on transparency and providing upfront pricing to build trust with consumers in the new car-buying environment.

How many consumers use a phone to contact dealerships?

39% of consumers contact dealerships via phone, highlighting it as the leading channel for initial outreach.