Today’s consumers often consider convenience and time spent making a purchase to be as important as a product’s price. Why go to the store for the same laundry detergent, paper towels and cereal you always purchase when you can automate delivery on a timeline that works for you?
There are purchases consumers continue to make in person, especially for big-ticket products like vehicles. However, shoppers seek out convenience and time savings in the car buying process, as well.
Technology companies that provide software to dealerships to make their operations as seamless as possible are instrumental in helping dealerships close deals quickly and efficiently. And software-based solutions are most effective when they’re backed by strong, accurate and reliable data.
I meet with technology organizations regularly that use Market Scan’s data to power their solutions, as well as companies that are considering adding our capabilities to their offerings.
Here are six points I hear from them as they develop new software and improve existing tools:
- Dealership customers want to see consistent pricing throughout the purchasing process, from initial online research to driving a vehicle off the lot. This means the software tools we provide must also reflect these consistencies.
One of the biggest complaints customers have when they’re purchasing vehicles is the disconnect between the pricing they see in their initial research and the options they’re provided in-dealership. Discrepancies throughout the process can send them to several dealerships, forcing them to consider vehicles they weren’t originally interested in and breaking customer trust. When dealership technology providers all use the same strong set of data to power their solutions, customers see consistent pricing throughout the purchasing process. - Along with consistent pricing, customers want a wide range of purchasing options with a variety of terms, down payment options and more. Our solutions must support this breadth of information.
While the “penny perfect payment” verbiage is important – as discussed, customers want to see accurate, consistent pricing throughout the purchasing process – it is most effective when it’s taken one step further and customers can see a variety of purchasing options. This total visibility ensures customers choose the deal that works best for their lifestyles and budgets, and dealerships can provide fair offers that respect their profitability requirements. Technology partners making software in the pricing realm do best when they develop tools that enable both consistency and variety. - Connection among software tools in every part of the sales funnel is essential.
All dealership technology providers create software designed to support dealership efforts in some part of the sales funnel, making connection and integration among tools especially important. For example, one tool that provides online retailing could send customer information to area dealerships that have the vehicles the customer is interested in. Throughout the sales funnel, dealerships have smoother operations when software solutions use consistent data and can “talk” to each other, making the purchasing process smoother for both the sales team and customers. - We need accurate data from all sources – including dealerships – to truly offer the most effective dealership solutions.
It may seem obvious, but technology providers looking to use comprehensive data must pull it from all five data classes that impact vehicle pricing. Along with consumer, municipality, OEM and lender data, this includes dealership data, which is often overlooked. In many states, laws governing how dealerships operate can be interpreted in a variety of ways, making each dealership’s business model slightly different, sometimes even among dealers within dealership groups. Truly comprehensive software will account for each dealership’s unique methodology and data, helping to mold an effective strategy around the dealership instead of forcing dealerships to change their business practices to incorporate new technology. This provides the backbone for accurate, consistent pricing and the variety of options consumers have come to expect and appreciate. - The Federal Trade Commission’s CARS Rule is on the horizon and is expected to tighten requirements on car sales. Any technology provider offering pricing or vehicle information will be impacted, and the way the entire US automotive retail industry operates will change.
Expected to go into effect in the foreseeable future, the FTC’s CARS Rule is designed to “add truth and transparency to the car buying and leasing process.” Among other requirements, it prohibits misrepresentations about material information; requires dealers to clearly disclose the offering price, which is the price anyone can pay to get a vehicle, excluding only required government charges; makes it illegal for dealerships to charge consumers for add-ons that don’t provide a benefit; and requires dealers to get consumers’ expressed, informed consent before charging them for anything.The rule is likely to have major implications for dealerships and technology partners that help calculate vehicle pricing and payments. Market Scan data already includes all the information dealerships will soon be required to provide to consumers, enabling dealerships and technology companies using our data to provide the information before the rule goes into effect. This shows transparency and builds trust among customers. - As technology providers, we’re very good at creating effective software solutions. However, we can use some guidance when it comes to industry trends and data providers can offer this support.
Technology providers do a phenomenal job creating and providing effective tools that help dealerships keep their operations running smoothly. However, the focus is on their technology, not keeping up with industry trends. At Market Scan, we pride ourselves on providing guidance to the technology providers by using our data to help them understand the industry. While there are many data providers that charge for support, implementation, onboarding, ancillary products and more, we at Market Scan are willing to meet with our partners as needed and at no additional cost. Automotive retail is most effective when all aspects of the industry create a seamless customer experience, and technology providers can best do their job when they truly understand the data available to them and its benefits.
Consumers are increasingly focused on convenience, timeliness and transparency, and automotive retail software tools are integral to supporting dealerships as they meet customer expectations. By backing technology providers’ solutions with industry leading data and ongoing support, Market Scan empowers technology providers to lend transparency and trust to dealerships throughout ongoing shifts in the industry.