A decrease in showroom traffic caused by COVID-19 accelerated dealer adoption of new remote sales platforms and capabilities, according to the newly released 2020 U.S. Sales Satisfaction Index Study by J.D. Power, an information technology firm in Troy.
“The pandemic provided dealers with a wide-open path to allow different approaches to sell vehicles outside of their traditional showroom sales process,” says Chris Sutton, vice president of automotive retail at J.D. Power. “It’s revealing, too, that 44 percent of online shoppers are now selecting the exact vehicle they want from inventory on a dealer’s website, which is an increase of 13 percentage points from January of this year.
“The more shoppers are exposed to remote communication and actual online buying options, the more they may prefer these methods in the future over traditional showroom visits. Nearly one in four buyers say their purchase experience during the pandemic will make them less likely to shop in person in the future. These lasting effects make it imperative for dealers to step up their digital offerings to remain competitive.”
The study, now in its 35th year, was redesigned for 2020. It now places a higher emphasis on digital retail and remote buying. Digital retail activities measured in the study provided the opportunity to select a vehicle, receive credit approval, review finance and insurance products, agree on a purchase price, and complete paperwork. All these activities saw a spike during the onset of the pandemic and, while many declined from May-June, are still up nearly 50 percent from January.
The study also found that as dealerships refined digital procedures, buyer satisfaction increased among digital customers. Most notably, satisfaction among buyers who finalized a price online was nearly identical to those who didn’t finalize a price online before the pandemic began. By May and June, satisfaction among buyers who agreed to a price online was 42 points higher (on a 1,000-point scale) than among those who hadn’t.
Most buyers admit COVID-19 affected their buying processes in unexpected ways and were more satisfied as a result. Satisfaction among buyers who say their process wasn’t affected at all is seven points lower than among those who were affected. Buyers who completed most of their paperwork online had the highest satisfaction rating, with an average score of 873, 35 points higher than those who didn’t complete paperwork online. Similarly, satisfaction scores among those who had more virtual communication was 17 points higher than among those who didn’t.
Reviewing finance and insurance products online increased after COVID-19, but it’s still uncommon — 7 percent of buyers say they reviewed products online during the March-June timeframe. However, the take rate among buyers who reviewed products online is higher compared with those who reviewed products in the showroom.
On average, vehicle brands have a higher Net Promoter Score than their dealer base, with nearly a 20-point gap on a 100-point scale. However, there’s also a wide range of gaps between the two groups that vary by brand, the largest of which is 34 and the smallest of which is -2. Key performance indicators that have the highest effect on buyer satisfaction index scores include sales consultant completely understood needs (92), vehicle delivered in perfect condition (55), and finance staff not too pushy selling additional products (52). These key performance indicators are met nearly 90 percent of the time. Net promoter score measures customer advocacy for the model they own and can be a strong predictor of future business growth.
Tesla, which was profiled for the first time, received a Sales Satisfaction Index score of 804. The automaker is not officially ranked among other brands in the study because it doesn’t meet ranking criteria. Unlike other manufacturers, Tesla doesn’t grant J.D. Power permission to survey its owners in 15 states where it is required. However, Tesla’s score was calculated based on a sample of surveys from owners in the other 35 states.
Lincoln ranks highest in sales satisfaction among luxury brands with a score of 827. Lexus (826) and Mercedes-Benz rank second in a tie. MINI (824) ranks highest in sales satisfaction among mass market brands. GMC (804) ranks second, and Buick (803) ranks third.
The U.S. Sales Satisfaction Index Study measures satisfaction with the sales experience among new-vehicle buyers and rejecters, who shop a dealership and purchase elsewhere. Buyer satisfaction is based on six factors, in order of importance: delivery process, dealer personnel, working out the deal, paperwork completion, dealership facility, and dealership website. Rejecter satisfaction is based on five factors: salesperson, price, negotiation, dealership facility, and variety of inventory.
The study is based on responses from 35,816 buyers who purchased or leased their new vehicles from January through June. The study is a comprehensive analysis of the new-vehicle purchase experience and measures customer satisfaction with the selling dealer. The study also measures satisfaction with brands and dealerships that were shopped but ultimately rejected in favor of the selling dealership. The study was fielded from July through October.
J.D. Power offers consumer insights, advisory services, and data and analytics. It has offices in North America, Europe, and Asia Pacific.