Enhancing Customer Experience: Why Car Dealerships Lose Business to Competitors

In today's automotive landscape, where customers have more choices than ever, car dealerships face a unique challenge: retaining customers and winning their loyalty. Despite offering the same vehicle brand, many dealerships lose business to competitors. Why does this happen? The answer lies in the customer experience.

Having spent two years working with a major OEM, I was fortunate to learn the trends that cause dealers to get poor customer experience scores. I was also able to truly understand why customers would give them a shot but leave to do business with the competition. It was a great time to be involved in this project because our industry saw drastic changes from inventory shortages with market-driven pricing to the normal pre-COVID grind of needing to work to earn a living.

Virtual Shopping: The Digital Showroom

In the age of digital transformation, virtual shopping experiences have become increasingly popular, especially in the automotive industry. Customers are now accustomed to browsing and purchasing products online and expect the same convenience when shopping for cars.

However, not all car dealerships have adapted to this shift in consumer behavior. Some may lack a user-friendly website with comprehensive vehicle information and intuitive navigation. Others may fail to offer virtual tours or video demonstrations of their inventory, leaving customers feeling disconnected from car-buying. Some "rejector" aspects of a virtual experience include how the dealer markets their business and how simple it is to make the ride to visit them.

For this argument, I would like to focus on the lead-handling strategy. I have found that when looking at these "rejector" reports and comparing them to unsold leads in the dealer's CRM, there are many comparisons as to why their BDC or Internet sales department could not set the appointment. In some cases it is because it was difficult to get a straight answer on price. In other cases, the customer felt the dealer took too long to respond (response time). There are also situations where inventory questions were not answered properly. This topic can be dissected in thousands of different ways.

In contrast, competitors who invest in accountability, coaching, and proper tools (like AI) will often have increased appointment ratios and ultimately contribute to more sales. These dealers prioritize online customer engagement and are more likely to capture the attention of prospective buyers. By providing immersive virtual experiences that must later be replicated with the in-person dealership visit, they create a seamless transition from online browsing to offline purchases.

In-Person Shopping: The Importance of Personalization

Even for customers who prefer traditional in-person shopping, the dealership experience plays a crucial role in their decision-making process. A welcoming atmosphere, knowledgeable staff, and personalized service can make all the difference between a satisfied customer and one who walks away.

Unfortunately, some car dealerships fall short in these areas. Pushy sales tactics, lack of transparency, and a focus solely on closing the sale can alienate potential buyers and drive them toward competitors who prioritize building long-term relationships over short-term gains.

Conversely, dealerships that prioritize customer satisfaction and invest in training their staff to provide exceptional service stand out from the competition. By taking the time to understand each customer's needs, offering tailored recommendations, and fostering trust and transparency throughout the buying process, they create a memorable experience that encourages repeat business and referrals.

Conclusion: Elevating the Customer Experience

In a highly competitive market, customer experience is the key differentiator to make or break a dealership's success. Whether through virtual shopping experiences or in-person interactions, customers expect convenience, personalization, and transparency every step of the way.

To stay ahead of the competition and win the loyalty of today's discerning car buyers, dealerships must prioritize enhancing the customer experience across all touchpoints. By leveraging technology to offer immersive virtual showrooms and investing in staff training to deliver exceptional in-person service, they can create a seamless and memorable car-buying journey that keeps customers returning for more.

Ultimately, it's not just about selling cars—building relationships and exceeding customer expectations at every opportunity. By making the customer experience a top priority, car dealerships can retain their existing customers, attract new ones, and thrive in an ever-evolving automotive landscape. The time to maximize training and development is more crucial now than ever because our industry needs to be realigned with understanding the basics but with a modern retail approach! We at Dealer eTraining specialize in delivering training and coaching services for dealers and OEMs at all levels and we invite you to see what we can do to enhance operations in the dealership.