Top 14 Reasons People Buy New Cars
By
Marty Bernstein, Contributing Editor AIADA
Let's
rename CRM to a more appropriate phrase. CRM is not customer relations
management, to be truly effective (not to mention efficient and
economical), it really should be called customer relations marketing.
This subtle shift implies that understanding the needs, wants
and desires of your customers and potential customers is of paramount
importance. And that's marketing, not management.
Consumers resent being considered faceless numbers in a data base
somewhere. It's almost as poorly perceived as the ubiquitous telephone
answering trees — "if you want service dial 1" — is not
good service. Establishing a rapport with a new car buyer begins
the minute they enter the front door. What is the motivation that
has brought them to your dealership?
Why do they want to buy, at least look at a new car, truck, mini-van
or SUV? Until now this has been at best, a SWAG on the part of
the salesperson. Now there is accurate, projectable, demographically
reliable data.
The information provided by BIGresearch of Columbus, Ohio, a market
intelligence firm that provides analysis of consumer behavior
through a syndicated consumer intentions monthly survey of 7,000
respondents that identifies opportunities in a changing marketplace.
Called the consumer intentions and actions (CIA) survey it has
a 1% +/- margin of error.
Even though David Letterman has made the top 10 lists famous,
there are more quantifiable reasons why people buy a new car,
truck, min-van or SUV. Here are the results of the most recent
consumer survey.
|
Reason
|
What
motivated you to consider
buying a new car? |
%
|
|
14 |
Lease
on old car is up |
4.8% |
|
13 |
Wanted
a vehicle with new "techy toys" (Nav, DVD, etc.) |
6.2% |
|
12 |
Needed
a vehicle with more room |
9.0% |
|
11 |
My
significant other wanted a new car |
11.9% |
|
10 |
Needed another car for my family |
14.0% |
|
9 |
Financing
deals/incentives too good to pass up |
14.3% |
|
8 |
Wanted
a vehicle with better safety features |
14.6% |
|
7 |
Like
the styling of the new models |
15.0% |
|
6 |
Not
really sure, other |
17.0% |
|
5 |
Old
car just died |
17.6% |
|
4 |
Wanted
a car with better gas mileage |
19.2% |
|
3 |
Old
car was always in for repairs |
20.4% |
|
2 |
Tired
of the old car, I wanted something new |
22.0% |
|
And
the top reason why is... |
|
1 |
Old
car had high mileage |
35.2% |
Source:
BIGresearch The sum of % totals may be greater than 100% because
respondents could select more than one answer.
Every
automotive sales training program I've seen has guides to helping
establish the rapport or relationship with the shopper, but there
is little similarity between brands, product knowledge notwithstanding.
Knowing the reasons why helps direct the person to product more
effectively.
A
winner of a 'salesman of the year' award from a major dealer told
me, "After introducing myself, I like to sit with a shopper
to get basic information (name, address, etc.) because it helps
me better understand their needs and helps qualify them for what
they can afford. Then I show them a specific vehicle. And my customers
like this, they're not being pushed to the spiff of the day vehicle."
What type vehicles are under consideration by consumers?
Only
a finite number of consumers are in the market to buy a new vehicle
at any time — the number is about 10 percent. Comparing data from February
(10 percent) with March (9.4 percent) 2005 showed a decease of 0.6 percent in purchase
intent. Shifts were also noted in the type of vehicle under consideration.
Rank |
Type
Vehicle |
%
Shoppers |
1 |
Car |
57.9% |
2 |
SUV |
26.4% |
3 |
Truck |
17.8% |
4 |
Minivan |
11.8% |
5 |
Crossover |
9.3% |
Source:
BIGresearch The sum of % totals may be greater than 100% because
respondents could select more than one answer.
What Brands Are Being Considered For Purchase
Intentions
Here's
a quick snapshot look at the top five nameplates for those planning
to buy new in the next six months:
| Car |
SUV |
Truck |
Minivan |
| 1.
Toyota |
1.
Ford |
1.
Ford |
1.
Dodge |
| 2.
Volkswagen |
2.
Chevrolet |
2.
Dodge |
2.
Ford |
| 3.
Ford |
3.
Jeep |
3.
Chevrolet |
3.
Honda |
| 4.
Buick & Lexus (tie) |
4.
GMC |
4.
Toyota |
4.
Toyota |
| |
5.
Honda |
5.
Nissan |
5.
Chevrolet |
Source:
BIGresearch
What Are Consumers Prepared to Pay?
Obviously
the cost of vehicle enters into purchase equation. This will enable
sales personnel to direct the shopper to either a new vehicle
or one previously owned.
| Price
Range |
%
of Shoppers |
| Under
$10,00 |
0% |
| $10,001
to $15,000 |
7.4% |
| $15,001
to $20,000 |
22.2% |
| $20,001
to $25,000 |
23.7% |
| $25,001
to $30,000 |
18.7% |
| $30,001
to $40,000 |
18.9% |
| $
40,001 and up |
9.1% |
Source:
BIGresearch
The
Bottom Line?
There's
a lot of valuable information in this article, some if not all
of it is not or seldom provided by manufacturers on a regular
basis. Develop and compare your data with the national numbers
to make this more pertinent to your store and market. It will
help generate more business. As shifts occur in consumer reactions
and perceptions, the AIADA will update our members.
(Source: AIADA)
|
