autodeal car buyers survey

In 2017, the AutoDeal Customer Support team reached out to more than 50,000 prospective car-buyers in the Philippines. The purpose was not only to support buyers with their pending inquiries, but to benchmark industry performance and gather insights on what things mattered most to potential buyers.

From approximately 15,000 buyers who made a purchase after using AutoDeal*, our team were able to speak to 2,893 buyers and conduct customer satisfaction surveys as a means to measure their happiness with the buying process and to uncover reasons why buyers chose to purchase from a brand over another. A total of 1,324 buyers completed the tele-survey in full.

Through these calls, we learned a lot, so much in fact that I can’t even do justice to the data set that was developed is in this single article alone.

So, what did these calls teach us about car buyers in the Philippines exactly? Well, let us disclose some initial findings.

The Importance of Brand Affinity

Of all the buyers we spoke to, 26.13% claim that the single most important factor that mattered most to them in their purchase-decision was their brand preference or how they felt that the brand they chose matched what they were personally looking for in a vehicle.

It should hardly come as a surprise, automotive brands both at home and abroad spend big marketing bucks every year defining themselves by attempting to gain dominion over a variety of common buzzwords like “tough,” “powerful,” “safe,” “stylish,” and “reliable.”

Over the last decade, however, brands have had to evolve their messaging so that they can communicate to the buying public that are now more deeply conscious about social, economical, and environmental concerns. This has led to a prevailing increase in the use of terms related to fuel economy, carbon emissions, and corporate responsibility.

However, much in the same way that we indicated how vehicle safety influences buyer decision making, no factors like economy, ownership concerns, or harm on the environment were single handedly chosen as a significant contribution to purchase decisions (making up only 1-2% of respondent feedback). Likewise, even a vehicle's overall features, whether it be engine performance, comfort, and technology, only mustered as much as 7.02% of buyers purchase reasoning.

While car makers know for sure that brand messaging is incredibly important, contemporary vehicle marketing is by no means a picnic. Brands have to be strategic with channel selection, incorporate a variety of consumer engagement plans and have near perfect executions when it comes to the use of new media. While successful campaigns can work wonders in generating sales, there’s little to no mercy for poorly executed campaigns that grow more and more susceptible to social media backfire.

The result? A more complex algorithm in developing brand identify than ever before. As such, knowing your market and in this particular case, understanding what Filipinos want in a car brand, has never been more important.

How a brand represents itself, though, is not just the result of its billboards, TV commercials or hashtag campaigns, but what it actually provides to its customers. That’s right, nothing says more about a brand than what its existing customers say about it, and this is vital to keeping the gears of the candy-factory churning.

The Importance of Ownership Experience

While AutoDeal has been unable to get direct information on ownership experience per se, we found that 17.52% of purchase decision-making occurred because of a referral by a friend or a family member. Astonishingly this was almost as critical as Perceived Value for Money which account for 17.67% and way more prevalent among buyers than product features (remember 7.02%?)

That’s right, almost one in five buyers stated that what their spouse, uncle Dave, or next-door neighbor recommended was more influential than what brands claimed that their products could do. So to hell with your automatic climate control, 9 airbags, and bluetooth, I’m going to buy a car like dear old uncle Dave’s!

Anyway, for full disclosure, since we don’t have the data to turn this claim into an irrefutable fact, I’m going to commit professional suicide and go out on a limb by hypothesizing that the value that buyers attribute to referrals from their peers is pretty important, which hopefully is a result of the experiences that such peers have previously had with said brands.

As such it seems that buyers treat brands in a similar fashion to politicians: they’re no longer just looking for promises, but looking to brands who talk-the-talk and walk-the-walk.

The Importance of Customer Service

For those that have been reading our corporate blog this year, you’re probably already aware of our obsession on customer service metrics like response time. Since we began AutoDeal in 2014, our continuously expediting vehicle sales numbers have shown a direct correlation with dealer engagement and overall reduction in response times.

Well, fortunately our surveys further back-up our findings as 16.24% of respondents stated that overall customer service was the single biggest factor in their purchase decision. That’s right, forget about the vehicle all together, the sale was won on the basis of good ol’ salesmanship.

Soundbites like “I purchased from dealer A because dealer B did not reply to me” or “I purchased from this sales agent because that sales agent never got back to me” are so common they visibly jumped out in my face when reviewing the notes section of the call logs.

To brands and dealers alike, it must be a travesty to lose a sale when a customer is committed to buy on the basis of a poor sales experience.

Those who win, go on to win more

    In the AutoDeal system, there are 2,079 sales agent accounts at more than 300 dealers spread throughout the 4 corners of the Philippines as of this writing. In total we estimate that the sales agent earnings from the commissions generated by AutoDeal in 2017 will conservatively amount to more than P100,000,000 ($2,000,000 USD)**. Not bad, eh?

    Of the sales agents in our Lead Management System, more than 50% of the sales that are remitted by dealers (and as such can be attributed to a specific agent) are made by 5% of the sales agent user base.

    The trick? Well, actually there isn’t one.

    However what is important is for dealers, sales managers, marketers, and the like is the ability to maintain accurate data on their customer’s source of origin. The highest yielding partners on AutoDeal (who generated approximately one hundred or more sales in 2017) are not winning due to voodoo, the Force, or clairvoyant abilities, but due to a systematic understanding of assigning the right people to handle online leads. Once the right people are in place and they realize they can start making more money, sales just expedite and conversion rates grow.

    In a recent meeting with one of our dealer clients, she described an initial reluctance among team members to try new sales channels. It’s hardly surprising, psychological studies have shown that many of us have a deeper fear of the unknown than we do of a known negative outcome; it’s apparently a tendency that affects more of us than we’d like to admit.

    When referencing AutoDeal, she stated how reluctant agents were to try it out at first, but once they started generating sales they quickly grew more engaged. Today, she claims that many agents not currently enrolled in AutoDeal are now asking if there’s a “spare slot” as those using the system are easily making up between 10-20% of their monthly sales quota.

    In 2018, new features in AutoDeal will provide agents to now have a deeper understanding of how well they’re performing versus other agents of the same brand. With this, we’re hoping that team members will be able to get more information on how to self-evaluate themselves.

    35.3% of buyers are abandoned if they do not purchase immediately

    When it comes to observing the fruits of one’s labor, or in this the case, the number of sales generated from a specific marketing engagement, a degree of patience is often required.

    To put it simply, buyers enter a lead funnel at varying levels of “readiness” and while dealers seem incredibly competent at handling prospects with immediate purchase intent, a lot of waste is generated through an inability to stay in contact and nurture leads to fruition.

    To highlight this, when we surveyed consumers, 2 to 3 months after their inquiry date, we found that 37.40% of them had already made a purchase, 18.5% were no longer interested in any shape or form, and 35.3% were still interested with a high degree of purchase intent. A further 6.58% claimed to be “still interested, but not yet ready to buy” and a further 2.2% chose not to disclose any information.

    With that said, unbeknown to many dealers, there’s a huge chunk of potential buyers gearing to buy who might otherwise be lost to competitors if they fail to maintain any degree of communication. Dated leads also become increasingly difficult to track often failing to be correctly accredited to their original lead source when a final transaction occurs.

    This 35.3% is what we widely refer to in our literature as “the honey pot.” Now, who’s got a sweet tooth?

    Conclusions

    The findings from our discussions with car-buyers leads us to the conclusion that success in sales can be attributed to 3 pillars of similar significance: Brand, Ownership Experience, and Salesmanship. As such, it’s hardly surprising that car makers continue to invest in new ways to connect with consumers while at the same time looking to their existing customers to help drive success stories.

    The main challenge for brands with Salesmanship is mostly due to the franchised dealer business model and the inability/discomfort of car makers getting granular in dealer operations. While new-age brands like Tesla try to address this with direct distribution to consumers, it’s uncertain if this model will ever truly be successful in the U.S., let alone make it to other countries. For now, shared end-to-end systems are a good way to transmit vital information and intelligence about customer acquisition and sales conversion by source. Feeding sales data up river from the showroom floor to the marketing division is a great way for brands and dealers alike to understand their sales channels.

    Other factors like price point and product capabilities, while important are commonly susceptible to ever changing market variables like volumes of disposable income and fickle alterations to opinions about technology, style, and comfort.

    While in the future, we might see consumers purchasing vehicles by interacting with AI or by selecting them from giant vending machines, I believe such innovations will not diminish the significance of brand appeal, ownership, and salesmanship. Whether we’re actually buying a car or subscribing to a mobility partner, the foundations of what influences consumers should remain consistent for as long as brands strive to differentiate themselves from each other.

    One thing is for certain though; for the foreseeable future, success in deriving sales from online channels will still be largely influenced by sales agent response time. 

      

    *Sales figures are generated through sales remittance reported by dealers, customer feedback forms and over-the-phone surveys.

    **Commission figures based on earnings of P6,000 per sale.

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