Closing the Trust Gap: How Transparency in Trade Leads to Profit
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Despite the efforts of many good dealers, a significant trust-gap still exists when it comes to the dealership appraisal process. In fact, recent research shows only 31% of consumers trust the trade-in value provided by the dealership. This session will explore how transparency in the appraisal process can help you build consumer confidence, acquire more vehicles, and improve your bottom line.
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Closing the Trust Gap: How Transparency in Trade Leads to Profit
- 1. Closing the Trust Gap in the Trade-in Process: How transparency in the trade process leads to profitability Kerri Wise VP, Dealer Training and Industry TrueCar Title Sponsor
- 2. CONFIDENTIAL Auto 500+ Sites Publisher The TrueCar Network *Available in participating club territories BENEPLACE
- 3. 3CONFIDENTIAL TrueCar Trade Transaction 17 Digit VIN Vehicle Interview Offer Condition Report
- 4. 4CONFIDENTIAL Insights and best practices based on consumer and dealer research • Online Mystery Shops • Management Interviews • Website review • Focus Groups • Survey Research • Consumer Journey Diaries
- 6. CONFIDENTIAL Despite the best efforts of many good dealers, a large “Trust Gap” still persists 2% 2% 4% 4% 9% 5% 5% 9% 7% 18% 9% 27% 30% 38% 34% 12% 15% 26% 30% 37% 42% 42% 40% 43% 38% 48% 46% 49% 42% 50% Politicians Used Car Dealers New Car Dealers Stock Broker Journalists Real Estate Agents Home Repair Contractors Lawyers Auto Mechanics Your Company's CEO Bankers Police Officers Teachers Airline Pilots Doctors Very Trusting Somewhat Trusting Level of Trust by Profession 84% 80% 79% 73% 57% 56% 50% 49% 47% 47% 46% 34% 30% 17% 14% Source: YouGov Omnibus Study (April 2017) n=1,165 US Adults; ”Your Company’s CEO” – n=561 US Adults. In general how trusting, if at all, are you/would you be of information you receive from each of the following people?
- 7. 7CONFIDENTIAL Consumer trust in trade-in values is low Source: TrueCar Research Diary; Total n=352; Buyers n=51; Non-Buyers n=301 Top Box: Completely/Somewhat Agree Percent of consumers that trust each type of information given by dealers Vehicle Information 73% Financing Terms 45% Asking Price 40% Trade-in Values 31%
- 8. 8CONFIDENTIAL Pain points in the dealer process solidify consumer distrust Waste of Time “Firstly, they were confused why I was there... I drove a long way to visit them and it was a waste of time” Online Disconnect “The people who contacted me from dealerships knew nothing about my car that I wanted to sell and the car I wanted to buy...They were confused & lost.” No Transparency “They wouldn't give me a number over the phone at all, they wanted me to drive all the way out which is at least an hour. “ No Validation “I wasn’t sure if the offer the dealer provided me for my vehicle was fair” Sales Pressure “I specified that I was trying to sell my car instead of trade in for another one.” Source: TrueCar Research
- 9. 9CONFIDENTIAL Family-Owned Dealer #1 Sales Volume Leader in Area Buy car online Prior purchase with Dealer Pre-approved loan before visit Get monthly payment before visit Specific Contact Person Up-front Trade-In Offer Convenient Location Good dealership reviews Knowing what others paid Up-front Price Incentives & Rebates Large Inventory Easy F&I process Preferred vehicle match No Pressure Experience 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 35% 45% 55% 65% 75% 85% 95% Easy/DifficulttoFind Importance to Consumer Traditional dealership messaging fails to address the trust gap • When thinking about your decision regarding which dealership(s) to visit, please tell us how important each of the following is to you when selecting a dealership. • How difficult or easy was it to obtain the following information about dealerships? Most Important/Hard to FindLeast Important/Hard to Find Most Important/Easy to FindLeast Important/Easy to Find
- 10. 10CONFIDENTIAL Consumers seek out 3rd party sites for independent info and validation 75% 23% 10% 6% 3rd Party Dealer Website Manufacturer Auto App Website/App Consumers rely on for Trade-in values Source: J.D. Power and Associates 2017 New Autoshopper study “ Visited multiple car shopping sites, as well as looking at other people selling a similar car privately with the same mileage, and options and things, and I just picked somewhere in the middle.” – Lesley W
- 11. 11 Dealers who can directly solve consumer pain points in the trade/appraisal process have an opportunity to differentiate themselves and acquire cars at a competitive cost to market
- 12. 1212 Give consumers the ability to obtain a upfront/specific offer
- 13. 13CONFIDENTIAL Consumers are skeptical of vague offers/ranges
- 14. 14CONFIDENTIAL Many consumers want an upfront specific offer on their trade and are willing to provide a high level of detail Transaction 17 Digit VIN Color, Options, Mileage, Condition Offer
- 15. 1515 Create digital parity across different channels
- 16. 16CONFIDENTIAL Consistency is key to building trust 3rd Party Valuation Sources Dealership Website (Trade Widget) Showroom
- 17. 1717 Put your best foot forward through a customized response
- 18. 18CONFIDENTIAL Don’t forget the basics 5X Faster in initial response Respond Fast Customize the Response 32% More likely to confirm the trade-in vehicle details Consistent Follow-up 30% More follow-up attempts What differentiates Top dealers?
- 19. 19CONFIDENTIAL Focus on the trade first (not selling them a car)
- 20. 20CONFIDENTIAL Emphasize your low pressure process
- 21. 21CONFIDENTIAL Show enthusiasm about their vehicle
- 22. 22CONFIDENTIAL Show enthusiasm about their vehicle
- 23. 2323 Sell the value of engaging further with you
- 24. 24CONFIDENTIAL Sell the value of engaging further with you
- 25. 25CONFIDENTIAL Sell the value of engaging further with you
- 26. 26CONFIDENTIAL Sell the value of engaging further with you
- 27. 27CONFIDENTIAL Sell the value of engaging further with you
- 28. 28CONFIDENTIAL Sell the value of engaging further with you “Our Shares Program is a unique, upfront, and transparent way to have the customer self-discover and to get involved in retailing of their car… This results in greater margins and capture rates are over 70%.” - TruWorth Auto
- 29. 2929 Help the Consumer understand the “Why”
- 30. 30CONFIDENTIAL Show them the value impacting options and condition that affect the offer Off Color, one key, and above average mileage Standard Color, two keys, and below average mileage
- 31. 3131 Involve them in the process
- 32. 32CONFIDENTIAL Avoid a “silent walk around” and involve the consumer 3X More likely to provide 5-star rating when given a side-by-side appraisal 1.5X More likely to trade or sell their vehicle when given a side-by-side appraisal 47% 53%Yes No Did Dealer Conduct a Side-by-side Walk around? Consumers that receive a Side-by-side walk around
- 33. 33CONFIDENTIAL Why does the consumer matter? “If you’re competitor focused, you have to wait until there is a competitor doing something. Being customer focused allows you to be more pioneering.” Jeff Bezos CEO, Amazon A consumer first mentality will help you win in the long run
- 34. ENJOY THIS SESSION? Post about it on social media using the hashtag #IS20G! Share some love for your favorite speakers! Title Sponsor Contact Info: Kerri Wise VP, Dealer Training and Industry TrueCar kwise@truecar.com