The 5 Habits of Effective Digital Car Dealerships

Nov 17, 2021
Erin Lomax, Cox Automotive VP Ops Consumer Marketplace

Estimated reading time: 6 minutes

Between the inventory shortages plaguing the entire auto industry and the digital revolution that’s changed the way people buy cars over the last two years, it’s safe to say the car dealership has experienced some change.  

At Cox Automotive, we’ve studied consumer behavior, examined how some dealerships thrived during the uncertainty of the pandemic and taken a magnifying glass to the overall car buying journey from end to end — all to help our clients be successful and drive business forward into 2022 and beyond.  

What we found is that successful and highly effective dealerships have something in common: they’re focused on creating a frictionless digital experience and leveraging their data and their people to put the right customer in the right car.  

Here are the 5 habits of highly effective digital dealerships: 

1. Ensuring every VDP is best in class.  

VDPs are the first touch point with a vehicle for most consumers—and they won’t put up with something spammy, photoshopped or suspicious. They’re comparing descriptions, pictures and prices with other vehicles (aka your competitors). They’re used to doing this—and they’re savvy. High-quality listings are essential; successful dealerships deliver consistently accurate, informative and appealing VDPs to create a positive connection and drive consideration. Videos, 360-degree spins, descriptions written like a human are all important facets of a VDP.  

Especially as more dealers are expanding inventory to reach beyond your immediate market and DMA, your VDP can make or break you. Highly effective digital dealerships are taking advantage of consumers’ willingness to drive between 50-200 miles1 for their next vehicle by optimizing their digital curb appeal a la VDP.  

More VDP best practices for boosting conversions 

2. Focusing on personalization and relationships.  

From coffee to cars, people want a personal experience when making a purchase. Think about it: aren’t you a little pleased when you open your Starbucks app to redeem your free birthday coffee—or when Amazon suggests products based on your purchases? These types of personal experiences make customers feel more connected and inherently create a positive experience. 

Consumers are even willing to give websites and companies more personal information if it results in a better experience. One of the pieces of low-hanging fruit dealers can work with is personalized payments; these are simple options that make a big difference. 67% of car buyers want to see personalized payments when shopping.2 If you’re not leveraging the free consumer tool, My Wallet, by adding your preferred lenders, you’re missing out. My Wallet lets customers shop by budget, entering information like credit score, trade-in and down payment early in the process.  

The information a customer enters then integrates with our digital retailing product, Accelerate My Deal, which delivers more-qualified leads further down the purchase funnel.  

See how personalization is key to a better car buying experience.  

3. Using digital retailing to create a superior customer experience.  

Speaking of digital retailing, we all know shoppers’ desire to do more online has increased over the last few years, and really got going when the pandemic hit. We’ve seen a shift from interest in starting the deal online to an increased interest in finalizing the deal, making the transaction and acquiring the vehicle (home delivery) online.   

We studied dealerships that became more efficient and more profitable amid the challenges of 2020 (we call them Thrivers) and learned that Thrivers agreed that offering more digital options to customers is critical to the retail success of any dealership — and that the digital changes they’re making now will create long-term benefits.  

By offering a digital retailing suite—like Accelerate My Deal—you’ll save time and money by working with more qualified leads further down the purchase funnel. And when you offer digital retailing along with options for a traditional sales experience, you can create a seamless customer experience that extends from digital to the dealership, which is exactly what customers want.  

Accelerate My Deal and My Wallet make a great team. Learn more about how you can implement them to drive qualified leads more likely to convert.  

4. Leveraging data to make decisions. 

With the changing landscape of online tracking and marketing, you should lean on your own data from CRMs to build custom audiences and target customers effectively. 

86% of dealers agree that having accurate and complete customer data is a priority at their dealership.3 Armed with accurate and up-to-date information, highly effective dealerships are moving away from mass ad campaigns in favor of targeted digital marketing. 

Juggling a combination of online tracking, targeted digital marketing, transparent OEM incentives and personalized communications using data from their CRMs, these dealerships are ensuring the right messages are reaching the right customers. 

Your data could be your competitive advantage if you’re delivering personal messages to people at the right time, like when they’re coming off lease or due for service. When you use data to drive relevancy and personalization, you get more qualified leads and deliver a better experience to the customer.   

Get more strategies on how to build a digital dealership that meets customer expectations.  

5. Investing in their staff.  

Success starts with people; technology enables the process.  

Your dealership’s staff is an important part of your success today and in the future — and it’s imperative that you lean on them to help build your digital ecosystem. When we studied thriving dealers, those whose businesses became more efficient and profitable in 2020, 73% made employee satisfaction as important as CSII scores. 

Use text, chat and virtual assistants to stay connected to your customers—they want to stay in touch and using these platforms allows you to communicate how they want and build a relationship throughout the car buying and owning journey.  

Building out a digital ecosystem requires all employees to be all in, and the time is now. Interest in working in dealerships is growing, digital retailing is becoming a must-have and you have a unique opportunity to get good people in the door by investing in their development and offering new types of positions and tasks. One dealership we studied took its chat service in-house and transitioned about 15% of salespeople to showroom coordinators, who champion and manage the digital interface with customers.   

Becoming an Effective Digital Car Dealership 

As you gear up for 2022, think about how you can implement some—or all—of these habits of effective digital car dealerships. Whether you start to home in on making sure your vehicles have top-notch curb appeal or you build out processes and systems with your staff to enable a better customer experience, the things you do in 2022 will carry you through the continued digital revolution our industry continues to undergo. And if you need help on where to start, reach out to one of Autotrader’s Dealer Success Consultants. They’re here to help you drive your business forward into the future—next year and beyond. 

1Chip Shortage and Car Buyer Behavior August 2021  

22021 Digitization of End-to-End Retail Study 

3 Profits & Efficiency: Implement Best Practices from Today’s Top Performing Dealerships