Mobile Consumers Are Calling

Mobile Consumers Are Calling:

How Inbound Phone Calls Help Auto Dealers Win Customers, Influence Brand Loyalty

A Marchex Industry Trends Report
Summary

The massive rate of mobile phone adoption has ushered in a dramatic shift in consumer behavior for the U.S. automotive industry. Consumers researching cars, parts or services are no longer content to visit a website, fill out a form or send an email outlining their needs. With a smartphone in practically everyone’s hand, consumers want immediacy and human connection. In short, they want to talk. Auto dealerships are experiencing a significant increase in the volume of phone calls from consumers, which directly corresponds to the rise of smartphone growth. In a September 2013 study, Google found that more than half of consumers searching for cars, parts or services on their mobile phones are “very likely” to click on a phone number to call a business. The intent of these consumers cannot be overstated. As dealerships start to recognize phone calls as mobile’s fastestgrowing source of lead generation – and as more ad dollars pour into mobile marketing to drive these phone calls – there has never been a greater need to understand at scale what, exactly, happens after a consumer connects with a dealership over the phone.

Marchex, a mobile advertising technology company, examined 2014 data from ad-driven phone calls to dealerships to determine how dealers can better capture leads over the phone.

The data strongly indicates that the auto industry has a tremendous opportunity to maximize profits with incoming calls for parts and services. More importantly, capturing leads for parts and services strategically engenders customer loyalty. When maintenance and repairs are done well, customers come back, industry executives and analysts say.

Marchex postulates that brand loyalty is a valuable commodity that also drives sales of new and used cars – a critical factor in creating long term, sustainable growth. Brand loyalty keeps dollars flowing to manufacturers, years after customers have driven their cars off a dealer’s showroom floor.

74% Call dealerships to inquire about parts and services.
Parts and services: Big profits, big chance for customer stickiness

The National Auto Dealers Association (NADA) released its annual deep dive into dealership sales and financial trends in May and found that for all dealerships, sales for parts and services rose nearly 4% from $81.35 billion in 2012 to $84.59 billion in 2013.

That marks the third consecutive year these sales exceeded $80 billion, according to NADA, noting that service work is an “integral part” of a dealership’s operations.

Customers streaming through the parts and services channel present a prime opportunity for dealerships to nurture leads that translate to future car sales. Dealerships need to pay particular attention to Millennials, who represent a strong “DIFM” (Do-It- For-Me) opportunity when it comes to paying for auto services.6 Cultivating such relationships also saves money. Indeed, it costs far less for manufacturers to sell to a satisfied repeat customer than to win a loyalist away from a competing brand.

Furthermore, when customers end up choosing auto maintenance specialists – e.g., Jiffy Lube, Maaco, Midas –over dealerships for parts and services work, brands get hit twice: first, they lose out on the job; and second, they lose the chance for customers to see new cars on the lot.

Missed opportunities

Whether consumers call about new or used cars, parts or services, Marchex found several instances in which dealerships failed to capture leads effectively over the phone. In particular, the analysis showed:

  • 16% of calls go unanswered.
  • When customers DO connect with a dealer representative, 63% of the time there is no attempt to get the customers to make an appointment.
  • 66% of the time representatives do not ask for the customer’s contact information.

By addressing these three key issues, dealerships can expect to increase customer conversion rates by 20%, according to the data.

Conclusion

Ultimately, dealerships must seize on building relationships every step of the way throughout the online-to-offline customer journey. This means nurturing leads from the moment the phone rings, to when a customer appears in the lobby, to even after that customer leaves the lot.

Sources:
  1. Source: “The Role of Click to Call in the Path to Purchase,” Google. September 2013.
  2. Based on 1,000 randomly selected phone calls from Marchex Auto Study in Q2, 2014.
  3. “How Auto Makers Keep You Coming Back,” The Wall Street Journal. January 22, 2013.
  4. Source: National Automobile Dealers Association, NADA DATA report, 2013 and 2014.
  5. “And service work, whether for warranty repairs or a quick oil change, is still an integral part of dealership customer service and operations.” NADA DATA 2014 report.
  6. BB&T Capital Markets, 2014 Presentation by Bret Jordan, CFA, Equity Research Analyst for the AutoCare Association.
  7. “How Auto Makers Keep You Coming Back,” The Wall Street Journal. January 22, 2013.