How exactly do car dealerships sell you a car? From your perspective, it may seem straightforward: they advertise it, you haggle a bit, and then you sign the paperwork.
But times are changing. Companies are harnessing the power of “big data,” and that probably includes yours. The vast majority of vehicle buyers research their purchases online, and they’re leaving a digital trail as they do.
By looking closely at that trail, companies can figure out not just what you’re going to buy, but exactly when you’re going to buy it.
Social media sites like Facebook push advertising out to you, but at the same time, they can also be used to pull you in. Rather than wait for you to come to them, savvy salespeople post questions on their pages, often unrelated to the cars they’re selling.
They’ll ask something like, “The road’s ripped up outside our store. Anybody else tired of construction?” and get responses from people eager to vent about it.
To you, it looks like a discussion about roadwork. To the salesperson, it’s a lead. He now has your attention. It seems minor, and most of the replies will go nowhere, but any opening is a chance to build a client relationship, and the salesperson has done it at no cost.
Moving pictures, moving cars
Some salespeople go a step beyond and post videos. Watch carefully and you may see some little tricks in them. A popular one is starting off with the opposite of the video’s message, such as telling you the dealership doesn’t want to sell you a car (but eventually spins and reveals that it does, of course). There might be “pattern interruption” to catch and hold your attention, such as the salesperson putting on and knotting a tie during his spiel.
The video might play up a stereotype, like the annoying used-car salesman, or focus on the seller’s attributes, such as an unusual voice or above-average height. That way, when you come into the dealership, you’re more likely to go to that salesperson because he seems familiar.
Even people who feel confident about their decisions will still have questions, and most find it easier to ask someone they feel they know, even if it’s just by watching him talk on Facebook.
This new type of customer interaction is already changing the face of many dealerships. In some cases, dealers hire people primarily for their knowledge of technology, not cars. With so much vehicle information available on the Internet, customers are already well-versed about what they want to buy. The salesperson’s primary job is getting them to come into that particular store to do it.
Free to talk?
You might have noticed many dealer websites now include the opportunity to open an online chat with a representative. But these sites aren’t just waiting for you to talk to them. In some cases, they’re already watching what you’re doing.
The “tipping point” actually arrived about two decades ago, when data companies went from seeing what people were buying; to seeing the process they went through before they actually purchased. Exactly what could be done with that information wasn’t yet fully known, because it still needed to be fully analyzed to find the patterns.
They’re still learning about all the information, but companies have harnessed enough of it that some are watching while you’re looking at them. Sites like Kijiji and Trader – which host sales from dealers as well as from private sellers – follow customers to see where they are in the buying process.
They know when you’ve just started looking or when you’ve narrowed it down to a handful of models, and they follow you through to when you’re about to visit the dealership to see the car in person.
How that information is actually used depends on who wants to know, and how much they’re willing to pay for each level of data. At the lower end, dealers can determine what shoppers are predominantly looking at in the ads – specific features, warranty, or a used vehicle’s history – and focus on those items in their ads, or they can learn what vehicles are most in demand and price them accordingly.
At the upper end, sellers may have the ability to determine exactly where their customers are in the buying process and what they’re specifically researching. Armed with this, they can know when to push, when to back away, and what they can try to upsell when the customer makes the final decision to buy.
As analysts figure out how to further break apart the stats, dealers may be able to see how they’re doing in relation to their competition, find and profitably price desirable models for their used-car lots, or set their staffing hours to match showroom traffic.
And as big data spreads its tentacles across numerous platforms, including your other online shopping hubs and credit status, there may even be the potential for dealers to know such personal information as how much you’re willing or able to spend to get the car of your dreams.
Not all of this is here yet, but it’s coming, and as business gets tighter, you can expect retailers to increasingly use it. If you go to buy a car and everything falls right into place, it isn’t because the dealer could read your mind. Instead, it might be because he knew exactly what you did before you even set foot inside his door.