Drive Up Sales And Satisfaction: The Power of Automotive Mystery Shopping
For most people, buying a vehicle is a significant financial and emotional investment, probably the second-largest they will make outside of buying a house.
Customer journeys are long and involve many points of contact between company and consumer. The average customer will spend 40 days finding their next car, and after-sales care can last for years. The decision making process is complex, taking in factors such as budget, features, status, safety, and brand reputation.
The market is shifting towards electric and hybrid drivetrains, ownership models are evolving, and vehicles are increasingly being sold as technology products rather than automotive. These developments are shortening sales cycles, and look set to fundamentally change the relationships between producers, dealers, and consumers.
In this rapidly changing environment, Customer Experience (CX) is emerging as a crucial battleground. According to Deloitte, 78% of consumers now consider CX to be an important factor when purchasing a vehicle. However, after completing a purchase, 48% of consumers are never contacted by the manufacturer and 22% are never contacted by the dealer.
There is a world of opportunity available to the businesses who can bridge this gap between expectation and experience.
In this blog, we look at the role of customer experience in the automotive industry, and how Mystery Shopping initiatives help brands improve their CX performance.
The Current CX Landscape for Automotive Sales
Costs are rising but so are satisfaction levels
The cost of vehicle purchasing in the U.S. has become a lot more expensive over the last five years. The first jolt came from the arrival of COVID-19. Assembly lines were frozen, and a shortage of semiconductors meant producers faced difficulties sourcing the chips they needed for vehicle computer systems. Since the end of pandemic restrictions, the twin threats of global supply chain issues and rising energy prices have weighed heavily on both the new and used car markets.
The result is that, since 2019, sticker prices have increased by 30%, while real wages have grown by only 5%. The average cost of a new car in December 2023 was $48,759 – compared to $36,718 in 2019 – and monthly payments have reached a near-record $770 a month.
At the same time, while customer satisfaction rates have fluctuated between 60-72%, overall they are trending in a positive direction. As Forrest Morgeson, Associate Professor of Marketing at Michigan State University, states: “despite higher prices, value perceptions have improved as well”. Customers are paying more for their vehicles, but almost every aspect of the driving experience – reliability, safety, gas mileage – is improving.
Customer journeys combine online and offline
Customer journeys in the automotive industry are long and take in many online and offline touchpoints. During the initial research phase, 95% of customers use online resources as their initial source of information. 71% of those customers use Social Media to inform their choices, with the most common channels being YouTube and Facebook.
Dealerships are reacting to this shift, with 74% reporting that they now provide more detailed information about their vehicles online. Many dealers also leverage Youtube to advertise new stock, offering the viewer a run down of features and a virtual test drive.
As the customer moves closer to purchase, they start to want a more tangible experience. While 94% of customers will contact dealerships via a website, this is typically where customers cross over from online to offline. Understandably for such a large purchase, 81% of buyers want the opportunity to see, touch and drive a car before completing a sale, and 95% of car sales still happen in physical dealerships.
From these statistics, we can conclude that brick-and-mortar dealerships with a strong online presence are currently the most likely venue for customers looking to buy a vehicle, when compared with wholly online or offline competitors.
The Importance of Customer Experience in the Automotive Sector
High-consideration purchases require trust
For most buyers, purchasing a vehicle represents a serious investment, and positive customer experiences are crucial to build the trust and confidence required to get deals over the line. 88% of car buyers say they consider trust as important when purchasing through a dealership, and 55% admit they would pay more to purchase from a dealer they trust.
Trust and confidence are essential factors in an industry where few have the expertise to make fully informed decisions, and where there are a lot of innovative products on the market (such as EVs, hybrids and semi-autonomous vehicles) which have not yet undergone long-term real-world testing.
Despite this, car dealership salespeople are considered one of the least trustworthy of all professions, even below politicians. Customers believe they face what economists call ‘price discrimination’, where the cost is determined by bargaining position, and judgements on the amount certain people are willing to pay. There are also perceptions of high-pressure and unethical sales techniques, with sales staff prioritizing their own commission at the expense of the customer’s best interests.
Trust is essential to the vehicle purchasing process, and it is hard to come by in the automotive industry.
Emerging technologies and changing ownership models
It is no overstatement to say the automotive industry is currently undergoing a seismic shift, not only in terms of the types of vehicles on the market, but also in the way vehicles are sold and owned. This will have far-reaching consequences for the role of customer experience.
Sales of electric and hybrid vehicles have increased 250% since 2018 – many with semi-autonomous driver assist features – and this has changed the nature of vehicles from automotive products to technology products. In fact, 55% of all new car purchases are influenced by the technology that comes included with the vehicle.
This rapid development is expected to shorten sales cycles, with customers requesting yearly updates to their in-vehicle technology, rather than replacing the entire vehicle every 3-8 years.
Vehicle ownership models are also undergoing an evolution. In addition to more traditional purchase and leasing options, Chinese-Swedish brand Lynk & Co offers limited subscription use of their vehicles, and even car borrowing for their members.
These changes will put car dealerships and manufacturers in far more regular contact with their customers, and place greater focus on their customer service and after-sales care. It will also make brand loyalty and customer retention far more pressing concerns.
Increasing competition making CX a differentiating factor
Competition is increasing for automotive retailers. Some dealerships now offer countrywide delivery, extending their geographical reach and encroaching on the territories of local dealers. Subscription services and car-sharing platforms are eroding the dominance of traditional ownership models. Buyers also have access to far more information, with higher levels of transparency provided by online reviews.
The result is that 84% of buyers now look at multiple websites to check if vehicle price and features are consistent, and most will visit 3 or more showrooms before making a purchase. Customers are therefore more likely to favor companies with professional and navigable websites, which complement attentive customer service at showroom level. This also demonstrates the importance of understanding customer journeys, so each point of interaction leads customers onto the next, and doesn’t let them slip away to a competitor.
Related Read our guide to Improving Customer Experience
How Do Automotive Dealerships and Rental Agencies Benefit From Mystery Shopping Initiatives?
True customer perspective
Mystery Shopping gives dealerships an unbiased and unvarnished assessment of the way they are serving their customers. By contrast, internal auditing is open to skewing, as the people reporting may stand to benefit from what they report, or staff may identify the auditor and adjust their behavior accordingly.
Sales of add-ons
Brand Agents can assess whether sales staff are cross-selling and upselling additional services and promotional offers, as well as the ways in which these items are being offered.
Focus on customer needs
The needs of the customer are paramount in the sales process, and Mystery Shoppers can evaluate whether sales staff are effectively tailoring their approaches to meet customer requirements and brand expectations.
Improved brand experience alignment
Mystery shopping goes beyond staff interactions to assess whether the entire customer journey, from start to finish, matches the company’s designed experience.
Avoid legal risks
Dealerships have to comply with laws governing vehicle registration and sales, privacy, and financing. They can use Mystery Shopping to identify any areas for improvement before compliance issues arise.
Customer service in automotive sales faces an uphill challenge when it comes to consumer trust
Boost sales conversions
Brand Agents can identify shortcomings in the sales process that negatively impact conversion rates, including any deviations from designed procedures.
Data-driven decision making
Mystery shopping provides businesses with an accurate and up-to-date assessment of their current performance, giving brands data they can depend on to inform strategic decisions.
Competition benchmarking
Comparing customer experience metrics against their rivals allows brands to identify strengths, address weaknesses, and develop points of differentiation.
Improved employee engagement
Positive mystery shopping reports can be leveraged to boost staff morale, and serve as an independent measure on which to base bonus payments. They can also be cited by brands as proof of company commitment to customer service.
Related Learn how SEC helps automotive brands to improve their customer experience
What Can Mystery Shoppers Inspect at Car Dealerships and Rental Agencies?
When businesses partner with Mystery Shopping agencies, they are free to choose the KPIs that matter for their specific operations. However, some factors brand agents can report on are of particular interest for automotive sales and rentals:
Vehicle condition
Is the vehicle as advertised online?
Is the mileage as claimed?
Is there any additional damage that wasn’t visible in the online listing?
Is the vehicle clean?
Customer Service
Is the experience consistent across all channels?
How was the appointment scheduling process?
How quickly are customers greeted?
Are sales staff friendly and professional?
Are clients offered refreshments?
Staff communication skills
Are staff knowledgeable?
Are they able to explain key features in a digestible way?
Are staff transparent about vehicle histories?
Do staff listen to customer needs and respond to concerns?
Have finance options been clearly explained?
Upselling and cross-selling
Are additional services and products offered?
Are they appropriate?
How forcefully are these additional opportunities pursued?
Ethics of sales reps
Are sales staff using high-pressure techniques?
Product pricing and discounts
Is pricing consistent across dealerships?
Online
Is the website easy to navigate?
Are all the web pages and links functional?
Are the vehicle details complete?
Is it easy to book an appointment?
Brand image
Does the dealership experience align with the brand’s advertised image and personality?
Legal compliance
Does the dealership comply with laws governing privacy, large cash payments, equal credit opportunity, and the used car rule?
Do the finance options comply with ‘Regulation Z’, aka the Truthful Lending Act?
Showroom
Are the waiting areas clean?
Was the temperature too hot or too cold?
Were posters and marketing materials current and available?
After-sales care
Are customers contacted for feedback?
How are warranty claims handled?
Final Thoughts
Car dealerships and producers are operating in an environment of fluctuating costs, rapidly developing technologies, and evolving customer expectations. Customer journeys are becoming increasingly complex, and the way vehicles will be purchased, owned, and serviced is set to undergo significant change.
Against this backdrop of upheaval and uncertainty, customer experience has emerged as a key battleground. It provides brands with key differentiating advantages, and consumers with the reassurance they require for high-consideration purchases.
Mystery shopping initiatives are a valuable tool for automotive businesses looking to gain unbiased insights into their customer experience. Brand Agent reports help to identify areas for improvement and implement data-driven strategies aimed at enhancing customer loyalty, boosting brand reputation, and increasing sales conversions, as well as measuring the impact of these strategies.
At Service Evaluation Concepts, we have decades of experience partnering with automotive brands and dealerships, providing them with data they can depend on, for the KPIs that matter to their business. Drawing on a resource of over 600,000 brand agents worldwide, we are equipped to handle even the largest mystery shopping initiatives. We inspect what you expect to give you the insights you need to make meaningful improvements to your customer experience, enhance your brand reputation, and increase conversions.
CEO & Managing Director of Service Evaluation Concepts. Dedicated to driving brand experience forward with the tools that ensure the reality in the the customer corridor is aligned with the promoted brand value proposition.
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