Customers Take Their Time

The Internet has sped up many things, but it has slowed vehicle buying as consumers spend more time online before heading to the dealership to do the deal.

“People are taking longer as they shop for vehicles and do research online before they're ready to buy,” says Ralph Ebersole, an automotive retail veteran and consultant to Cars.com, an online car-buying service.

“We're seeing the shopping cycle extended as much as 20%,” Cars.com President Mitch Golub tells Ward's.

One reason is consumers are spending cautiously during the economic downturn, he says. But it is also because “they are doing their homework before buying.”

And there are more products to study, what with auto makers now offering more than 300 vehicle models, Golub says.

Ninety-two percent of U.S. car buyers with Internet access research vehicles and check dealership inventories online before buying.

The new-car shopping process begins on average six months before a purchase. It's shorter for used cars, with the process taking about three months.

Dealerships need to extend their follow-up processes to take into account the longer shopping cycle, Ebersole says. “They've got to look beyond the 72-hour push” and not assume every shopper contacting the store is ready to buy.

He recommends dealership follow-ups of 30 days, 60 days, 90 days and even beyond.

Dealerships that don't set up such processes will lose business, he says during a Cars.com webinar on driving sales in 2010.

There should be more opportunities for dealerships to do just that, as this year is expected to surpass the relatively dismal 10.4 million new-car deliveries and 36 million used-car sales of last year.

“The good news is that all predictions say the business is turning the corner,” Ebersole says.

Because of the longer buying cycle, customers are better armed with information when they arrive at dealerships, says Michael Tyman, a former dealership salesman manager and now CEO of Professional Success, a consulting firm.

“Sales people need to go beyond the line of, ‘When can you come to the store?’” he says.

He recommends offering something of value — such as a coupon or professional trade appraisal — to customers who schedule a sales appointment.

Time remains valuable to car shoppers, so Tyman recommends promising them an appointment in which they are the sole focus and not sharing the salesperson's time with three other customers.

“You need to create a VIP experience,” not make shoppers “feel they are entering a retail nightmare zone,” he says. “Tell them, ‘I'm setting an hour of my time solely for you and your needs, and I'm setting up cars you are interested in driving.’”

Conventional wisdom is that modern car shoppers know exactly what vehicle they want when they contact the dealership after doing extensive research.

But surveys dispute that notion, Ebersole says. “Two-thirds of people who contact the dealership by phone or email end up buying something different from what they originally intended.”