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2007 Dealer eBusinessPerformance Study:
The New Buying Influences
Presented by The Cobalt Groupin partnership with Yahoo! and R. L. Polk & Co.
October 18, 2007
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New buying influences
Brand and dealership loyalty is
diminishing
Consumers consider more makes,
models and dealerships,
broadening the top of the purchase
funnel
New Internet-based influences act
like filters within the funnel
Consumers use filters to narrow
their selection and determine who
theyll do business with
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Purchase funnelShopping filters
Pre-selection filter Search
Advertising Website appearance
Engagement filter Initial response
Quality of response
Transparency of communication
Purchase filter
Dealership reviews and rankings Sales professionalism, reviews and price
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Research componentsFive sub-studies
Two consumer surveys: 550 vehicle shoppers and purchasers
1000 vehicle purchasers
1 million leads from 1,140 dealerships representing35 brands matched with DMV data to assess sales rates
and time to close
2100 dealerships in eMystery shop campaigns encompassing20 brands
20 onsite visits to top performing dealers
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Pre-selection filterCar buying starts on the Internet
Search is the primary tool
for filtering dealerships
Website is a key extension
of the dealer's showroom
Online advertising grows
dealer sphere of influence
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All customers are Internet customers
Base: Total Respondents (550)Q4 When researching auto dealerships, which of these online search enginesdid you use to obtain information? (Please select all that apply.)QS10Which of the following resources did you use to gather information whileshopping for your new vehicle? OR are you using to gather information whileshopping for your new vehicle?Q0You mentioned that you used the resources shown below to research andshop for new vehicles. How did you reach each of these websites?
Car shoppers are
qualifying dealersby researchingonline & using
search for vehicledealershipresearch
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Internet used more than traditional media
48%
37%
23%
20%
11%
12%
Viewed cars/models available at thedealerships online
See if they had a dealership website
Find reviews about the dealership online
Called to see what cars/models were
available
Checked newspaper classifieds to try to
find more information on the dealership
Used the yellow pages to look for the
dealership
Did you do any of the following before actually
visiting the dealership?
Base: Total Respondents (550)Q14 Thinking about the last dealership you visited, did you do any of thefollowing before actually visiting the dealership?
Online
Offline
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Consumers consider multiple brands
Consumers visit anaverage of 6dealerships, but
they visit only onedealership perbrand
Base: Total Respondents (550); Those RespondingQS6 Please select the statement that best describes your consideration of eachmake listed below.QS7 How many dealerships did you visit for each make?
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Geographic area of consideration grows
68% of consumers are notwilling to travel more than
20 miles
32% of consumers arewilling to travel farther than
20 miles
A third of consumerswill drive more
than 20 miles
from home
Base: Total Respondents (546)*
* Dont know responses removedQS8 Again thinking about the dealerships you visited, think about how far each
dealership was from your home. In miles, please tell us the distancebetween your home and the farthest dealership you visited for each make.
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Internet is the primary resource for information
67%
40% 36%31% 29% 29% 28%
19% 17% 15%
64%
30% 30%26%
20% 20% 18%21%
12% 12%
Made me AWARE ofdealerships
Helped me LOCATEthe dealerships
Driven by
or seen
before
Friends &
Family
Search
engines
Dealer
websites
OEM
websites
TV ads Newspaper
Classifieds
Yellow
Pages
Radio Billboards
Base: Total Respondents (550)Q1a-Q1d Thinking about dealerships youve visited, which of the followingmade you aware of the dealerships?/helped you locate the dealerships?
How do consumers find and choose which dealerships to visit?(Choose from a list of 18 sources)
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Internet is the primary resource for information
36%31% 29%30%
26%20%
Made me AWARE ofdealerships
Helped me LOCATEthe dealerships
Driven by
or seen
before
Friends &
Family
Search
engines
Dealer
websites
OEM
websites
TV ads Newspaper
Classifieds
Yellow
Pages
Radio Billboards
Base: Total Respondents (550)Q1a-Q1d Thinking about dealerships youve visited, which of the followingmade you aware of the dealerships?/helped you locate the dealerships?
How do consumers find and choose which dealerships to visit?(Choose from a list of 18 sources)
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Key online sources are used throughoutthe shopping funnel
SEARCHSEARCH
ENGINESENGINES
DEALERSHIPDEALERSHIP
WEBSITESWEBSITES OEM WEBSITESOEM WEBSITES
33RDRD PARTYPARTY
CONTENT SITESCONTENT SITES
SOCIALSOCIAL
NETWORKINGNETWORKING
Learn about vehicle
makes/models Get a feel for the dealership
Find other buyer reviews on
dealerships Find out how many dealers
were close to where I live Find out if dealerships had
any special offers
Find out dealership inventory
on cars/models I want
Look up dealership address
and contact info
I used the following online sources to
Base: Those Responding: Newspaper inserts/classified ads (173); Radio ads(105) ; Local phone books (147); TV Ads (177); Magazines (68) Indicates percentage is significantly higher than the all-source average at 95%confidenceQ3 Now, thinking specifically about each of the resources you used to researchdealerships, which of the following helped you
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Consumers are submitting quotesat multiple points
Base: Total (550); Submitted a price quote (346)Q11: How many requests for price quotes did you submit on the Internet?Q12: What kind of site(s) did you use to submit your price quote?
Did you submit any requests for price quotes on the Internet?
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Engagement filterLead handling is key to performance
Lost opportunity is high
because lead handling is poor
Poor lead handling can also
cause brand defection
Dealers can turn the tide
through transparency
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Overall conversion is steady
45% of leads did notconvert
55% of leadsconverted
Based on registration information supplied by R. L. Polk & Co.Sales/leases have been adjusted for matching efficiency by a factor of 1.36,which represents a 73% historical match rate
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One Million New Car Leads
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Lost opportunity is still high
90% closed at a dealerother than the one thelead was sent to lostopportunity
Based on registration information supplied by R. L. Polk & Co.Sales/leases have been adjusted for matching efficiency by a factor of 1.36,which represents a 73% historical match rate
Sold at intendeddealership
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All missed sales
Based on registration information supplied by R. L. Polk & Co.Sales/leases have been adjusted for matching efficiency by a factor of 1.36,which represents a 73% historical match rate
Sold at intendeddealership
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Too many leads go unanswered
2007
Overall responsiveness 68.6%
Response time average (hrs) 7.1
Quality of responses:
Answered the shoppers questions 28.6%
Use brand or product highlight 25.5%
More than 30% of leads going unanswered.
2007 Cobalt National eMystery Shop, Base: 2,111
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Lead response time is slow
2007
Overall responsiveness 68.6%
Response time average (hrs) 5.4
Quality of responses:
Answered the shoppers questions 28.6%
Use brand or product highlight 25.5%
20% of consumers want a response within 4 hours ortheyll go someplace else.*
2007 Cobalt National eMystery Shop, Base: 2,111
* Cars Online 06/07: Understanding the Dynamics of Consumer Buying
Behavior and Customer Loyalty CapGamini
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Poor lead handling contributes tobrand defection
QV5 - Those who said they purchased a different make/brand than submitted aninquiry about (301) Which of the following reasons describe why you purchasedanother make/brand than you submitted an online inquiry about?
Of those that switchedbrands, 23% did sobecause of poor
dealer interaction
Why did you purchase a different brand than you submitted an onlineinquiry about?
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Poor or noresponse
Bad dealerexperience
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Quality of lead response is poor
2007
Overall responsiveness 68.6%
Response time average (hrs) 5.4
Quality of responses:
Answered the shoppers questions 25.0%
Use brand or product highlight 25.5%
2007 Cobalt National eMystery Shop, Base: 2,111
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Quality of lead response is poor
2007
Overall responsiveness 68.6%
Response time average (hrs) 5.4
Quality of responses:
Answered the shoppers questions 25.0%
Used brand or product highlight 19.5%
2007 Cobalt National eMystery Shop, Base: 2,111
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eMystery National Shop2005 vs. 2007
2005 2007
Overall responsiveness 69.7% 68.6%
Response time average (hrs) 6.5 5.4
Quality of responses:
Answered the shoppers questions 25.9% 25.0%
Used brand or product highlights 30.4% 19.5%
2007 Cobalt National eMystery Shop, Base: 2,111
2005 Cobalt National eMystery shop, Base: 3,576
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Purchase filterNewest influence: dealer reputation
The emergence of a
powerful new purchase filter
Consumer ratings and
reviews influence purchase
decisions
Dealership location and
loyalty are less of an
influence today
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Newest influence: dealer reputation
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Experiences influence other buyers
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Dealership reviews/rankingbecoming more pervasive
Base: Total Respondents (550)
Q7a Now wed like you to imagine there was a dealership review site providingcustomer satisfaction ratings generated by other customers who visited ordid business with the dealerships in your area. How likely would you be touse this type of site?
Q7b And how likely would you be to post your own reviews or comments aboutlocal dealerships on this site?
73%
58%
How likely would you be to:
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Impact of reputation is growing
Q13 - Those who visited at least one consumer opinion source/site (214)
Thinking about what you looked at on the customer opinion sites regarding cardealerships, please tell us how much the following statements describe you andyour opinions where 5 means it you describes you very well and 1 means itdoesnt describe you at all.
Car purchasers who visited customer review sites said thisstatement described them well:
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Impact of reputation is growing
Car purchasers who visited customer review sites said thisstatement described them well:
Q13 - Those who visited at least one consumer opinion source/site (214)
Thinking about what you looked at on the customer opinion sites regarding cardealerships, please tell us how much the following statements describe you andyour opinions where 5 means it you describes you very well and 1 means itdoesnt describe you at all.
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Impact of reputation is growing
Car purchasers who visited customer review sites said thisstatement described them well:
Q13 - Those who visited at least one consumer opinion source/site (214)
Thinking about what you looked at on the customer opinion sites regarding cardealerships, please tell us how much the following statements describe you andyour opinions where 5 means it you describes you very well and 1 means itdoesnt describe you at all.
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Impact of reputation is growing
Car purchasers who visited customer review sites said thisstatement described them well:
Q13 - Those who visited at least one consumer opinion source/site (214)
Thinking about what you looked at on the customer opinion sites regarding cardealerships, please tell us how much the following statements describe you andyour opinions where 5 means it you describes you very well and 1 means itdoesnt describe you at all.
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Dealership Preference Selector
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Buying attribute importance
Q13 - Those who visited at least one consumer opinion source/site (214)
Thinking about what you looked at on the customer opinion sites regarding cardealerships, please tell us how much the following statements describe you andyour opinions where 5 means it you describes you very well and 1 means itdoesnt describe you at all.
The Cobalt Group, Inc. Proprietary and Confidential. 2007. All Rights Reserved.
Price
Professional Sales staff
Online reviews
Location
Loyalty
7.75
7.23
5.14
1.85
1.32
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Summary and Implications
New filters influencing customers as they move through thepurchase funnel
Online location and brand is as important as offline
Shoppers make decisions based on quality of early communication
Quality of communication may be more important than ever
Customers seek, value and reward transparency
Reliance on customer reviews and dealer ratings is increasing
Invest in dealership staff to drive strong reviews Grow your review base to create a powerful marketing tool
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For more information on the 2007 Dealer eBusiness Performance Study go to
www.cobaltgroupresearch.com
Thank You.
http://www.cobaltgroupresearch.com/http://www.cobaltgroupresearch.com/