Boost Customer Experience With an Improved Trade-In Process

October 27, 2019 in Customer Experience

Customer experience. It’s the cornerstone of the mobile economy. Think about it. Why do consumers love Apple and Amazon? 

Apple, Amazon, and other companies at the forefront of the mobile economy deliver a customer experience that exceeds expectations. They provide a personalized, efficient experience that people rave about. 

Now think about the mobile experience of the typical American car buyer. How is the automotive industry performing? 

Our industry might lead the way in technological innovations in product design and development. But when it comes to our customers’ online shopping experience, we need to be honest with ourselves. 

We’re a straggler. 

Despite a wealth of examples demonstrating that resisting change in the mobile economy is a certain path toward obsolescence, we continue to do just that.  

Out With the Old, In With the New Car Buying Experience

Let’s take a closer look at the current state of affairs in today’s automotive industry. 

We Sell, Instead of Letting People Buy 

Amazon and other leaders have shown that the secret to success in the mobile economy is to facilitate the buyer’s journey, while staying out of the customer’s way and always allowing them to choose their own adventure.

We Use Technology to Generate Low-Value Leads 

Today’s mobile technology allows us to engage consumers in a much deeper and more meaningful way than traditional contact harvesting. Understanding a person’s behaviors and motivations opens the door to a personalized experience. Harvesting phone numbers and dialing for dollars is a thing of the past. 

We Reskin Outdated Processes 

Rather than inventing new applications that harness the power of mobile technology, we dress up our old processes with a superficial facade. The stereotype of the disingenuous sales rep is replaced by an impersonal chatbot. The confusion of closed door negotiations is replaced by cloudy online calculators that give the customer false expectations for the numbers they will actually see in-store. 

The way forward requires us to let go of some “tried and true” processes. Methods that have served us well in the past are now holding us back. 

The power of mobile technology is that it offers us a blank slate to design new processes that create shared value for our industry and its customers. Our task is to step forward into the role of the designer and craft those new processes according to the wants and needs of all stakeholders, from the living room to the board room. 

The Trade-In Process as a Gateway for Change 

Consider the following: 

  1. Researching trade-in value is the number one most frequent activity automotive consumers do while shopping online. 
  2. The trade-in process is at the front end of the buying journey. Consumers begin calculating their trade-in value at the very top of the funnel. 
  3. Today, the trade-in process is perhaps the single worst aspect of the automotive customer experience. It represents everything that we’re doing wrong. 

A 2018 Black Book study revealed that a trade-in value far below the buyer’s expectations is the second-most likely factory to kill a retail deal. 

As such, the trade-in represents a unique opportunity to transform the automotive customer experience. 

The trade-in process is a potential gateway to an overhauled buying journey that can bring the automotive industry into alignment with the modern mobile marketplace. And as we’re about to demonstrate, the steps to begin this transformation are clearly defined and well within our immediate reach. 

The Trade-In Sets the Tone for the Buying Journey

Today’s trade-in process is confusing and intimidating. As we look forward to the task of reinventing the car buyer’s journey, this is perhaps the lowest hanging fruit - and also likely the largest. 

More than half of all new and used car purchases involve a trade-in, representing more than 8 million retail opportunities every year. 

Simply put, the trade-in sets the tone for the buying journey for the majority of car buyers. Trade-in value determines how much equity a customer has in their car, which ultimately determines their monthly payment. Often, the trade-in value determines whether or not the customer can transact at all. 

Injecting transparency, connectivity, and consistency into what has previously been a black box from the consumer’s perspective can have a profound impact on sales efficiency metrics throughout our industry. 

Many among us continue to view the trade-in as an ancillary consideration. Smart dealerships, however, are already beginning to view the trade-in process as the key to the retail deal - and these dealerships will lead the way toward the three new tenets of transparency, connectivity, and consistency. 

Identifying the Obstacles for Dealers and Consumers

A number of obstacles stand in the way of a new trade-in solution. In order to move forward, we need to understand each of these obstacles from the appropriate perspective. 

The Buyer’s Perspective:

  • The customer doesn’t understand how the seller determines the trade-in value of their vehicle. 
  • The customer doesn’t understand many of the important factors that impact the value of their trade-in.
  • Online valuation ranges give the customer an unrealistic expectation that puts them at odds with the seller. 

The Seller’s Perspective: 

  • The seller may not want or need the customer’s trade-in. 
  • The seller may need to invest significant resources in order to remarket the trade. 
  • The seller is ill-equipped to accurately value non-core vehicles. 
  • Online valuation ranges are often insufficient for the seller’s purposes. 

Transparency: Bridge the Expectation Gap

When consumers shop at Amazon, they expect to find virtually any product on the market from the convenience of their home or office. 

They expect to find all the information they need to research that product, including a significant volume of reviews from other customers. 

They expect to order that product instantly, and for it to be conveniently delivered to their doorstep in a timely manner. 

Consumers trust Amazon because Amazon meets or exceeds these expectations. 

Unfortunately, consumers have very different expectations when it comes to buying a car. 

Car buyers expect to be inundated with phone calls and emails from numerous dealers after they submit their contact information online. They expect dealers to grind them relentlessly until they agree to a showroom visit. They expect to see a sales price that’s higher than the initial quote. They expect to get a trade-in offer that’s lower than the initial quote. And they expect to spend hours in unpleasant negotiations. 

As a result, consumers don’t trust car dealers. This is as true today as it has ever been. 

Transparency is the factor that can usher trust into the customer experience for car buyers. The path to transparency is easier than you might expect. 

Focus on Timely, Quality Communication 

From your very first correspondence with a customer you need to begin building trust. This is different than selling, and it involves more than just providing the reasons why they should buy your brand or the value your dealership will add to the transaction. 

Give them concrete, reliable pricing up front. Include useful information about what is in your current inventory, and the lead time for units that are not. If you have late model units in your used inventory, or even comparable off brand units, share that information as well. 

Open the trade-in dialogue as soon as possible. Help the customer get prepared for the trade-in process by providing useful information and setting their expectations correctly. If you are currently providing a trade-in estimate on your website that is far from your actual trade-in offers, stop. No estimate at all is far better than a bad estimate. 

Implement Customer-Assisted Trade-In Appraisals

Instead of having your customer wait in the showroom while you evaluate their trade-in, bring them along with you. Engage them in the process as much as possible. Guide them through the steps you take to determine their trade-in value. 

Ask questions about the vehicle throughout the process. You will likely be surprised how much information the customer is willing to share when they perceive trustworthiness. 

Weave the customer in to the trade-in process. Educate them about the factors that are impacting their offer, and guide their expectations to keep them in line with the offer you will make. 

Become an Educator

If you don’t want or need a customer’s trade, tell them so. Spend an extra 10 minutes explaining the costs involved with detailing, repairing, and remarketing the vehicle. Talk to them about transport costs and auction fees, and how these are playing into your offer. 

If you’re not familiar with the customer’s make and model, don’t speculate. Consult useful resources, and share those resources whenever possible. An independent 3rd party appraisal is indispensable in this regard. 

At every step, your goal is to educate the customer. They will appreciate your help and they will value your perspective. If you take this approach, you will build trust. 

Connectivity: Preserving the Human Element

In many areas of the mobile economy, artificial intelligence is successfully replacing human interaction. In the right application, artificial intelligence is an amazing advancement. In the automotive buyer’s journey, however, artificial intelligence may be overreaching its current capabilities. 

Buying a vehicle is one of the most emotional and costly purchases an individual will ever make. The process is inherently incompatible with generic lead forms that harvest name, phone, and email address without attempting to understand any of the buyer’s motivations. 

Who will be the primary driver for the vehicle? What preferences does the driver have? How will the vehicle be used? Will it serve multiple functions? What features and options are most important to the driver and to the buyer? These are the questions a quality sales professional asks. 

Currently, we use the latest lead and traffic generation tools to pencil as many deals as possible by month-end, rather the crafting personal relationships. We stack up hundreds of low-quality leads, and then close them at an alarmingly low ratio. These few successes come at the expense of trust, customer loyalty, and advocacy for our brands. 

In the case of trade-in valuation tools, we sacrifice a critical point in the customer’s journey in order to churn out more of these low-value leads. We use artificial intelligence to assign a value to any vehicle, while ignoring two universal truths: 1) Every used car is as unique as the person driving it, and 2) A used car is only worth what someone is willing to pay for it. 

We’ve allowed technology to replace human interaction at a point in the buying journey when customized, personalized interactions are absolutely necessary. The path to more meaningful connectivity in the car-buying journey is clear. 

Replicate the In-Store Experience Online

Your website should be designed as a seamless extension of your showroom. Not as a one-touch platform designed to push ads and harvest contact data. You never get a second chance to make a first impression, and for almost all of your potential customers, their first impression will come from your website. 

In the store, your customers are greeted warmly and made to feel comfortable. They have access to helpful staff, useful information and services, and a first-hand view of all your inventory. 

Questions are fielded in an open dialogue with your representatives taking time to listen, learn, and ask more meaningful questions in return. 

How does your online experience compare? 

If your website places a higher priority on harvesting information than sharing information, you have some changes to make. Use technology as a conduit to connect potential buyers with real people. In this way, you can create a stellar first impression and begin building trust before the customer visits your showroom. 

The results will be deeper conversations and deeper connections between your audience and your business. 

When It Comes to Sales Leads, Quality Beats Quantity

Lead generation for lead generation’s sake is a mistake. In today’s marketplace, many dealers find themselves drowning in a sea of unqualified leads. They’re playing a high-volume, low-quality game. And they’re actually paying several 3rd party “services” to perpetuate this problem. 

Turn them off. 

Spend your time nurturing relationships with a smaller batch of high quality, high intent leads. Craft personalized, tailored responses that resonate with your customer. Let your customers know you’re available to help them personally every step of the way. If the customer isn’t asking you about their trade-in right away, you should ask them. 

Imagine how much more qualified a lead would be - and how much better the customer experience would be - if the customer knew that you were listening to their needs, understanding their unique situation, discussing all of the details openly, and providing a personalized buying journey - before they ever set foot in your showroom. 

Consistency: Be Like Ali

If you’ve never heard of Ali Reda, please allow us to introduce you. 

In 2017, Ali sold a staggering 1,582 vehicles. He averaged 130 vehicles per month. This one man sells more cars than the average dealership in his home state of Michigan. His sales numbers have been submitted to the Guinness Book of World Records. 

Known by all of his colleagues as a gracious and humble man, Ali goes out of his way every day to build personal relationships with his customers and provide an exceptional level of service. 

Reda defines himself as “more of an adviser than a car salesman.” 

If a customer can’t afford a new car, Ali advises them to go home, save their money, and come back when their finances are in better shape. He often refers customers to competitive dealerships whose vehicles might better match that person’s particular lifestyle. 

If a customer totals a vehicle they bought from Reda, he helpfully walks them through the process of dealing with the insurance company. And he’s been known to drop everything and offer his aid to customers who are stranded with a flat tire or whose vehicles have broken down. 

In a February 2018 article in the Detroit Free Press, Ali said, “People come to see me with their automobile problems and I’ll solve the issue. Like, somebody comes in who owes more on a car than it’s worth. Well, we need to sit down and figure out the best plan for now and how not to let that happen again in the future.” 

Ali turns the automotive industry on its ear by proving that human connection and consistent service sell cars (lots of cars) and keeps people coming back for their future purchases. 

Be like Ali. Exceed expectations, and do it consistently. 

7 Tips to Provide an Exceptional Customer Experience

Here are seven key ways to begin delivering an exceptional customer experience. Obviously these seven things alone are not enough, but these are all simple changes you can implement quickly to begin your organization’s transformation. 

  1. Provide customers with timely, quality responses. Listen, learn, and ask questions. Replace chatbots with conduits for communication with live people. 
  2. Train your organization to stop viewing the trade-in as an ancillary consideration and prioritize the trade-in process as the key to closing more retail deals. 
  3. Adopt a policy of transparency in the trade-in process. Involve the customer in the trade valuation directly. Make the trade-in an educational process for the customer. 
  4. Embrace a culture of honesty at every stage of the buying journey. 
  5. Replicate the in-store experience online. Every feature should provide a service or information. Avoid harvesting contact data when the buyer has not shown strong intent. 
  6. Focus your sales organization on fewer high-quality leads. Stop paying for the problem of drowning in unqualified leads with very low closing rates. 
  7. Be like Ali. Exceed your customer’s expectations every single time. Earn their loyalty and their referrals with exceptional service. 

Consistently Delivering an Exceptional Customer Experience

For many organizations, this transformation may be as simple as making a few website updates and scheduling a few training meetings to discuss policies around the trade-in process. For others, significant progress might require changes in personnel and revised incentive plans. But for any organization, the transition to an exceptional customer experience will be rewarding. 

When you consistently provide an unparalleled experience, you will begin to build trust among your customers and your community. Your customers will appreciate your honesty and transparency, and they will share that appreciation with others. They will refer business to you, and they will return regularly for service, repairs, and for future purchases. 

Internally, a consistent process is one that you can successfully measure, track, and fine tune. It creates accountability and efficiency within your dealership. It leaves nothing to interpretation among your team members. It facilitates replication and repeatability, which are the keys to growth and expansion. 

Companies like Amazon and Apple have defined the expectations of today’s consumers. And while the automotive industry has earned its reputation, we are certainly capable of changing it. We have our work cut out for us. 

We can begin by implementing transparency, connectivity, and consistency in the trade-in process. Connect with The Appraisal Lane today to learn how we can help you enhance your customer experience with a modern, mobile trade-in process.