By Steve Southin, Co-CEO, PAVE
User Experience, by definition, addresses all aspects of an experience within automotive shopping, purchasing and owning of a vehicle from the customer’s perspective. From interacting with an ad, to interacting with a website and to parking their new vehicle in their driveway, user experience guides the interaction of the customer throughout mobile apps and websites from both visual and functional perspectives. It encompasses the experiential, affective, meaningful and valuable aspects of human-business interaction and product ownership and use.
Here are 5 reasons why User Experience is the foundation of a successful dealership.
1. Stronger Customer Loyalty
Simply put, if users have a negative experience with a digital retailing feature on a dealership’s website or mobile application, it’s likely they won’t return. In this scenario, dealerships only get one shot. Not only do dealerships lose a potential customer, they are also sending them directly to a competitor. Many consumers will choose to do business with a competitor after a poor customer experience.
Loyal customers also make some of the best brand ambassadors. Referrals are the least expensive customer acquisition but also come with higher closing rates. A positive user experience will help dealerships get to that point. Loyal customers account for roughly 20% of a dealership’s customer base, but make up more than 65% percent of its sales.
2. Stronger ROI
With better user experience, dealers get enjoy a better return on investment across all operations. It guarantees that money invested into its software solutions and marketing efforts generates into a measurable value. This results in stronger customer retention and it costs 3 to 5 times more to acquire a new customer than to retain a returning customer.
Measuring the effectiveness of your user experience efforts depends on how many users you turn into customers. Analyzing conversion rates is far more effective in measuring user experience than using sales figures alone. 74% of businesses believe User Experience is the key to increase the rate of conversion.
4. Stronger Productivity More Efficiency
By helping users get information and provide easy to use shopping tools, dealerships let them know that they respect the consumer’s time and appreciate their business. Every interaction between the customer and a dealer’s website should happen in the fewest possible steps with the least friction possible.
Evaluating a trade has been historically time-consuming for both the customer and the dealership – especially when the interaction and transaction is occurring online in a digital retailing capacity. Finding every little scratch and dent to fill in a vehicle inspection form takes time and attention to detail. Dealerships are hesitant to give solid numbers on a sight-unseen trade-in while consumers want hard numbers before coming in. The faster, simpler and more accurate it is to use a digital retail feature, the more likely it is that consumers will complete the process and the more confident a dealership will be in giving a more accurate value.
5. Stronger Customer Experience and Satisfaction
A dealership’s customers are the users of digital retailing software and they are valuable. When the process is easy, pleasant and natural for customers to be able to complete the steps in a digital retailing process, they are more likely to complete a transaction with the dealership. These benefit both the consumer and the dealership and lead to a better customer experience for the consumer and an easier sale for the dealership.
It goes without saying that User Experience (UX) is heavily dependent on the design of an application, integration of a dealership’s brand, and being able to provide the tools and information consumers are looking for while shopping for a vehicle. When 62% of shoppers and consumers base future purchases dependent on past experience, the user experience circumscribes customer loyalty and retention.
User experience should be more than just an afterthought and can affect revenue from many angles. A dealership’s customers expect to be able to engage with them on their terms. Making that process easier will only make the dealership stronger. And that is what leads to increased revenue, retention and loyalty.
About the Author
Steve and his 25+ years of automotive retail and wholesale experience deliver in-depth domain knowledge that was essential in his focus as PAVE’s creator and product architect. Steve also has 15+ years of technical and startup expertise that he gained as an Autotech entrepreneur, with his second recent successful exit being the Bumper App, which he brought to market in 2012 and successfully exited through an acquisition by Vicimus Inc. in 2017.