Customers want more engaged sales staff, less pressure to buy, longer test drives, and a greater 'sense of occasion'

A largely mass-market survey of 3075 recent new car buyers has found almost one-in-five were not entirely happy with how the experience went at their dealer.

The study, conducted by market research and analytics firm J.D. Power and called the 2018 Australia Sales Satisfaction Index (SSI), also found about 20 per cent of interviewed buyers and lessees indicated the sales person merely “partially understood” their requirements in the first place.

Sales consultants came under further scrutiny from the 17 per cent of participating customers who apparently were not asked about their preferences at all when buying the new vehicle. Given the plethora of choice, this strikes ones as a clear oversight.

Other findings included a consensus from many that test drives were typically too short: While more than four-in-five customers chose to take a test drive, half of them only spent 20 minutes or less in the vehicle, with 19 per cent experiencing only 10 minutes or less on the road.

In fairness, more and more brands are offering extended test drives, of 24 hours or more, either as official policies or at the dealer’s discretion. Holden springs to mind as one example of the former.

Quite how you’re supposed to make your mind up after 10 minutes at the wheel is mystifying, but as a former new car sales-person myself, I have seen such policies enacted.

Tellingly, customers experiencing a test drive lasting 31 minutes or longer (12 per cent) are more satisfied than those who experience 10 minutes or less on the road (821 vs. 807 respectively, graded on the firm’s 1000-point scale).

Sales consultants are also seen as pressuring customers to buy. The study finds that younger shoppers (below 40 years) and first-time new-car buyers experience “higher levels of pressure from the dealer to purchase a new vehicle”, at 35 per cent and 24 per cent, respectively.

This factor is clearly why more and more brands are starting stores with fewer direct transactional elements, from the Subaru ‘Do’ store model to the more subtle and ritzy ‘Mercedes Me’ store in Melbourne’s CBD. Many are dealer-backed, but many also are not.

Korean luxury startup (and Hyundai sub-brand) Genesis has announced plans to have luxury-couture style flagship stores, but no traditional dealerships when it finally launches in Australia. Cars will be for sale, and contracts can be signed, but test drives will all happen off-site.

Furthermore, while a new car is a major purchase for the vast majority of consumers (second behind a house for many), only 56 per cent of customers recalled any special ceremony taking place during the handover. It may seem trite, but such things appear to work.

“Providing acknowledgement via a special ceremony not only enhances sales satisfaction scores compared with instances when no ceremony takes place (827 vs 779, respectively) but also increases the proportion of customers who 'definitely will’ recommend the selling dealership to friends and family (70 per cent vs. 54 per cent, respectively),” the study found.

J.D Power’s SSI study is particularly important in 2018, since headwinds facing Australia’s 60-plus new car brands – a weak housing market, financial sector reform, an imminent election and potential ‘cyber car’ reform – might suggest those at dealer level make sure nobody is walking away dissatisfied with their purchase.

 

“Given the slowdown in sales, it is essential that sales consultants spend the required time with each shopper to identify the best model and variant for their requirements,” agreed J.D. Power Australia’s director Bruce Chellingworth.

“Simply ‘pushing metal’ won’t help the dealership gain positive referral, ensure customer loyalty or promote the brand. In an increasingly competitive market, it is imperative that dealers understand and build trust with their customers.”

As you can read in more detail here, car sales dropped by 3.0 per cent in 2018, despite significant incentives provided by car brands to their franchise dealers to move metal. It was the first year of contraction in some time, and followed an all-time record haul in 2017.

What about specific brand ranking, you ask?

Among the 11 mass market brands ranked in the study, Holden and Mazda ranked highest in a tie with a score of 822/1000. After Holden’s recent sales woes this should provide some relief. Market sales leader Toyota ranked third with a score of 815, followed by Nissan (804) and Ford (802).

BMW ranked highest in sales satisfaction among luxury brands, with a score of 861, ahead of Audi on 836 and Mercedes-Benz on 814. Clearly, premium brands are creating a happier buying experience, according to those interviewed. For more detail on that, read a recent story we wrote here.

For background, ‘buyer satisfaction’ is based on six measures: the dealer sales consultant; delivery process; dealership facility; ‘working out the deal’; paperwork completion; and the dealership website. The study was fielded from March 2018 through January 2019.

Of course, customer satisfaction surveys often yield discrepant results. We have an aggregation of such stories here.