Understanding the Path to Purchase

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1 Understanding the Path to Purchase Lisa Allan Research Director SPA Future Thinking

2 Introduction Understanding the purchase decision process within the automotive sector is increasingly complex. In less than a decade the influence of the dealership has been combined with the role of the internet and online in the decision making process. The internet provides consumers with a wealth of information which is now used throughout the purchasing process. As a result the path to purchase is now more involved and whilst the internet, dealerships, discussions with family and advice from friends lead the way for informing decisions a wide array of additional sources are still used including: Seeing the car on the road Consumer reports Car magazines Classified ads Brochures Newspaper reviews TV programmes Our aim is to help you understand the influences on path to purchase and highlight the numerous opportunities to engage with consumers via multiple touch points along the way, including: Influences on the Path to Purchase Dealer visits Friends & family Manufacturer websites Marketing & advertising Motoring media/websites News media Social media 2

3 The Changing Sales Funnel The recent changes in technology have led to the traditional purchase model to be radically changed. Only by understanding the latest path to purchase will you be able to identify channels where investment is required to maximise engagement with potential prospects and how you should be spending money to convert these prospects. Previously the traditional sales funnel involved the buyer: Starting with a shortlist of brands/models Refining to a shortlist with the help of traditional sources Finalising a preferred model and dealer Whilst the decision making process is still similar in length (circa three months) the internet has reshaped this process. 3

4 The New Sales Funnel In today s world we all have our shortlist of cars we want; from dream cars to the realistic and practical choices that need to be made. Considerations now include a number of key outside influences, including emotional drivers. Dealer visits Does a dealer visit initiate interest with a prospect and if so why? Research needs to understand which areas of the dealership resonate; whether it s the cars on display, sales staff knowledge or product demonstrations. News media Have press stories driven awareness to your brand, highlighted a specific aspect of your brand regarding image, quality, reliability both in a positive or negative light? Marketing & advertising Identifying which advertising campaigns have attracted attention ensures efficiencies in marketing spend. Measuring the effectiveness of your campaigns or competitors; understanding which part of a campaign created most desire to identify advertising recall and where it has been seen are key to channelling marketing budgets effectively. Friends & family Highlight the role friends and families play in providing advice, their power to influence and make recommendations in the purchase process. Social media Identify the role of social media, such as Twitter and Facebook, in informing and influencing purchase decisions. Understand engagement with social media campaigns. Manufacturer websites How could your site be improved to engage fully with prospects Motoring media/websites Which are the key sites your prospects utilise to inform and influence their decision making process. How do you perform on these sites? The new revised purchase process does now however see the list of considerations expand as buyers increase their options to fit their needs. The use of media and the internet has led to a continual reassessment of needs as potential purchases are explored, refined, validated or eliminated. This extended assessment includes considerations for not just the car category, brand and model but also finance methods and after sales care. 4

5 The Digital Age Identifying with digital engagement in your brand will enable you to understand how consumers form opinions of your brand, understand their needs and see how they form views of your brand to provide you with opportunities to influence opinion through advertising and engagement. Opportunities of digital Online provides powerful opportunities to inform and therefore influence the decision making process. Whilst consumers will move between both on and off-line channels when considering options, digital offers greater opportunities for interaction and delving into the car features, providing a depth to the experience. As a result understanding the key touch points of online advertising and the entire online experience is now increasingly important for automotive brands. It helps in terms of creating efficiencies in marketing and advertising spend to maximise the experiences of prospects to help brand building and also drive sales. Benefits of digital Digital engagement provides a number of key benefits: Gives buyers confidence: Having access to a wider range of information provides consumers with confidence in the decisions they are making. This is not simply in the choice of car and car features but also in terms of dealership, finance packages and so on. Empowerment: Specifically the rise of online communities has enabled the buyer to have access to the opinions of existing car owners alongside expert opinion or manufacturer sources. For many the owner view is an extremely valuable non-biased source of information and confidence Inspiration: The internet and social media also has the potential to inspire. The decision making process has become more interesting and fun. Opportunities to read expert reviews, use price comparison sites, magazine sites and manufacturer sites all help prospective buyers to have more informed opinions. It also enables the consumer to approach dealerships with greater knowledge and therefore confidence to enable them to get the deal that fully meets their needs. 5

6 Rise of Practicalities The new path to purchase is also complicated by tough economic conditions and low consumer confidence which create additional significant challenges to the car industry. When the serious decision making starts needs will be re-assessed and aspirations will inevitably be tempered by practicalities; and practicalities are increasingly important. Our list of top ten considerations: Purchase price Reliability Fuel economy Driver comfort Look of the car Fuel type Overall the new digitally led path to purchase enables customers to explore, evaluate, follow and discard leads to make a fully informed choice prior to purchase. This means that brands, through marketing and advertising, now have numerous opportunities to engage and influence opinions throughout the process which need to be understood. Here at SPA Future Thinking we work with leading automotive manufacturers and related companies to support their business decisions and planning processes. Safety rating Insurance bracket Handling ability Engine power/ top speed For more information and to learn about what other research solutions we offer the automotive sector please call or Lisa Allan, Research Director. +44 (0)

7 About the Author Lisa Allan - Research Director at SPA Future Thinking Lisa has a broad base of research expertise covering client handling, qualitative and quantitative research, product and solutions development and the management of operational departments. She currently manages our insight and data analysis function in addition to managing client accounts. She is an experienced qualitative and quantitative researcher at all levels and has led and supported programmes across all sectors. Lisa graduated from the Royal Holloway London University with a BSc (Hons) in Psychology and is a full member of the MRS. +44 (0) SPA Future Thinking is the result of a merger between a number of specialist agencies in 2010 and 2011, and has developed to become one of the fastest growing and largest independent market research companies in Europe, with more than 200 employees and offices in the UK, France and Italy and a partner network in 38 countries worldwide. With combined industry experience of over 40 years we offer thought leadership across a wide range of specialisms and we provide genuine expertise and understanding across a wide range of industry sectors. For over a decade SPA Future Thinking has been providing strategic research and actionable insights to a number of leading automotive manufacturers. We offer both custom solutions and analytics and proprietary techniques to help guide the decisions that you make in areas like market development, new product development, innovation, customer satisfaction and experience, brand, communications, buying behaviour and more. 7

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