When it comes to the customer service industry, many of us are familiar with the oft-repeated mantra of “the customer is always right”. However, in the automotive industry, a common phrase heard around dealerships is that “Buyers are Liars”.
Now, at first glance, this may seem a bit mean-spirited but several studies and surveys have shown that an overwhelming majority of customers lie through their teeth at car salespeople.
Why do they do this? Well, the short answer is that customers think that this tactic will help them get their way and land them a better deal.
However, the situation is a bit more complex than that, so let’s take a deeper dive into the facts and see if we can figure out what’s really going on.
The Dealer-Consumer Disconnect
For decades now, there has been a gradually growing divide between consumers and car dealers. This has now culminated in the large chasm of distrust that we can clearly see today. This distrust, which has been fueled by personal experiences or anecdotal evidence, has left customers feeling as if they need to actively “defend” themselves against car salespeople at every turn.
This has also been exacerbated by the prevalence of the “sketchy car salesperson” stereotype that has been perpetuated in modern mainstream media.
As a result, this leads potential customers – who would otherwise be trustworthy and sincere – to lie to their dealers about relevant factors, ranging from their trades and circumstances to their timeframe and intent.
Don’t believe us? Well here’s what the statistics have to say:
- Only 1 out of 10 consumers believe that being completely transparent with a car salesperson is a good strategy through the overall car buying process.
- 84% of consumers admit to telling one or more mistruths to their car salesperson during their most recent car buying experience.
- 78% of automotive salespeople believe that their customers are dishonest at some point during the car buying process.
The Impact
The belief that the average car salesperson is actively trying to trick consumers – to get them to commit to a purchase – falls apart when you look at the bigger picture. A tactic such as this may be effective at providing short-term profits but it doesn’t provide long-term financial benefits. It is important for dealerships to make their customers not feel like a one-time sale but rather a customer for life. Having a lifelong customer can far outweigh gaining some extra profit from a unit sale today.
One main issue is that many consumers misconstrue their car salesperson fervently trying to close a deal as them being “pushy” or “underhanded”. This belief stems (in part) from the growing divide between salespeople and consumers, which has resulted in costly inefficiencies.
Two very important points support this:
- Dealerships have increased their advertising expenses by an average of 6.3% yearly because the effectiveness of drawing in-store visits from consumers has diminished. Studies have shown that in-store visits have drastically decreased (per dollar spent in advertising) even though leads have not decreased.
- Every year, the cost of a new car has steadily been increasing, while profit per car sale has decreased for dealers every year. Analysts have concluded that the “inefficiency cost” has ultimately gone to online 3rd party retailers who profit from the aforementioned growing divide.
So, why have in-store visits from potential customers been on the decline? Well, in addition to the perceived distrust between both sides, consumers have also been trying to avoid spending a “long time” in dealerships. This has also been supported by increased consumer research times before auto purchases:
One of the top complaints from consumers is that they want to avoid the “long time” spent in dealerships (which averages 3.2 hours). According to them, this is why they do research beforehand – with consumers using multiple online platforms and spending an average of 12.6 hours researching their potential auto purchase. Over the past decade, this research time has increased 8% per year.
The Solution
After hearing all of this negativity, you’re probably wondering if this great disconnect between buyers and car dealers is here to stay. Can this ever-evolving misunderstanding be mended?
Truth be told, these old wounds seem to already be healing as time goes by. We can see this from the fact that online customer reviews for franchise dealership experiences have risen over the past few years; now averaging 4.23 stars. Furthermore, 84% of consumers have stated that they believe that car dealerships are valuable contributors to their local economy.
So, what can both sides do to speed up this healing process? Well, one of the most effective strategies seems to be open and honest communication, in a low-pressure environment, with a salesperson. This seems to be strongly supported by the fact that 92% of consumers have said that they would rather talk to an actual salesperson at a dealership, than a customer service representative at a call center.
Ultimately, it is important to realize that no one side of this equation is to blame for the creation of this problematic divide. Therefore, it is up to all of us to mend this broken trust together, to create a better and more stable industry for both consumers and dealerships alike.
How can we help?
Applied Concepts is the forefront of trying to mend the divide between consumers and dealers. Our programs teach modern retailing techniques grounded in transparency and trust in order to build lifelong customer relationships. Contact us for more information.
