Insights Gleaned

Hidden insights gleaned from J.D. Power by Ralph Paglia on the Dot Com Insider. Page 1 of 4

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Editor's Corner Ralph Paglia currently serves a CRM Program Consultant assigned to On The Road With
Forum work with major Car Companies in North America. In this capacity, Ralph
Industry Insider Ralph draws upon over 20 years of experience working in Automotive by
Events Calendar Retail and then working with hundreds of dealers during consulting Ralph Paglia
Resources engagements where his mission is to find ways to use the Internet and
Head to Head Information Technology to sell more cars and make more money.

Insights Gleaned From the…
2003 JD Power Autoshopper.com Study
Noteworthy Automotive Industry Trends

Car Company use of the Internet to market new and Certified Pre-Owned (CPO) vehicles, and car buyer's use of the Internet to
research information about those vehicles continues to gain momentum… JD Power verifies this trend in their 2003
Autoshopper.com Study. They report that the Automotive Internet User (AIU) percentage, from among all vehicle buyers, has

http://66.102.7.104/search?q=cache:r2-FqRjP1cUJ:www.dotcominsider.com/insightsralph.html+ralph+paglia&hl=en&gl=us&... 11/15/2006


increased to 64%.

2 out of every 3 vehicle buyers now use the Internet in their automotive shopping process (was 60% in 2002)
Among Import buyers, pre-purchase online shopping is higher.

Significantly, many online vehicle shoppers have NOT predetermined their preferred new vehicle before starting to shop
online. It is important that both OEM's and dealers do NOT assume that their customers will somehow arrive at their dealerships
after seeking, or even receiving information about their vehicles from online sources.

49% of new vehicle buyers were influenced by what they found using the Internet when they decided what make/model to buy
(up from 40% in 2002)
24% of all buyers report that information received while using the Internet had a "big impact" on the make/model they
purchased
(up from 16% in 2002)
AIUs often visit two or more OEM Web sites, indicating that they are shopping for vehicle makes and models using the Internet
(both within a make, and among other brands)

As car buyers seek more balance in the information they gather prior to making a purchase decision, they are attracted to
specific aspects of OEM, Dealer and independent information sites. Brand and specific model details available to car buyers
through OEM web sites are being supplemented by independent reviews, expert opinions, value analysis and pricing
information available through third party buying services and independent research sites.

Several OEM's and their dealers are receiving marketing and sales benefits from the "credibility factor" associated with
leading independent information sites. Through joint marketing and lead routing relationships with Kelley Blue Book
(KBB.com) and Edmunds.com, these OEM's and their dealers receive benefit from the consumer following of these third party
sites. KBB and Edmunds both continue to be among the more heavily frequented automotive Web sites and are highly rated in
usefulness by consumers when compared to other independent automotive Web sites. Dealers can tap into this marketing power
by using OEM Certified Web Services providers (such as Reynolds Web Services) and making certain that the links to their
dealership site are activated through the OEM's compliance management program… And, then checking to make sure the links
are working properly!

Why Does this Research Matter to Dealers?
JD Power's research further underscores the fact that Dealers are being affected to a significant degree by current trends in the
online shopping process.
49% of all new vehicle buyers stated that the price they agreed to pay, when they purchased, was influenced by information
received online
(up from 41% in '02)



21% of all vehicle buyers reported that the Internet was influential on their choice of which dealer to buy from
(up from 14% in 2002)
30% of all vehicle buyers visited a dealer Web site during the shopping process they used before making a purchase decision
Almost 50% of dealer web site visitors submit a request for information (Lead) from a dealership before they buy
13% of all vehicle buyers contact a dealer online before purchase

When an AIU gets turned off by a dealership because of something related to Web Services - no dealer Web site, no
vehicle specifications, no inventory, slow response to inquiries, not answering direct questions, not providing price quotes and
availability information or sending "just come on in" low value responses - they don't give up on buying a particular car; they
simply give up on that dealer and go to another one.

Automotive marketing professionals are best served by continuing to develop the usefulness of their Internet presence
through the use of increased interactive content. Increasing the research value of their sites is shown to be directly related to
positive user attitudes, leading to increased site usage as a shopping resource - contributing increased positive impact to the
dealer's ROI from investing in Web Services.
Twenty percent (20%) of all vehicle buyers purchase their vehicle from a dealer whose web site they visited online… prior to
taking delivery.
The above factoid highlights and underscores the need for dealers to continuously maintain updated and interactive sites that
contain the content that car buyers want.

Dealers that are active in Web Services management are aware of the benefits delivered by their Integrated Marketing
programs. Among those dealers who list their inventory online, 65% report that their Web site is an effective sales tool. Dealers
that do not provide updated inventory listings and search tools within their web sites are not experiencing as much success…
46% report that their web sites are effective.
Clearly, the JD Power report shows that car buyers want detailed information from dealers at an earlier stage in their purchase
cycle. Dealers that provide what car buyers want, are being rewarded with more business. The longer each shopper stays on your
dealer's Web site, the less time they will have to visit a competitor's site… A site that is, in many cases, marketing and
promoting a different brand.

Who is the Automotive Internet User?
As JD Power has reported in previous years, the typical online shopper (AIU) is both younger and more affluent than those
buyers who do not use the Internet to do automotive research. Without boring you with too much detail, they are:
46 years old
$81,000 per year average income
56% are college graduates
27% live in metropolitan areas
62% are male



We also know from reading the JD Power research that if a vehicle shopper desires to avoid dealing with dealership sales
staff, then they are more likely to shop for vehicles online and submit a request (Lead) related to making a buying decision.
During 2003 the value of convenience and saving time has become a greater priority to car buyers who use the Internet as part of
their shopping process. Alternately, the tolerance levels that online vehicle shoppers have with slow response times, low value
content within emails and phone calls that focus on how dealers want to sell vehicles, rather than how the customer wants to
buy, is far less than in the past.

NOTE: Information used in preparing this review and editorial content was provided by
" JD Power and Associates
" The Reynolds and Reynolds Company
" Mercedes-Benz USA

Ralph Paglia
Reynolds Transformation Solutions
mail@ralphpaglia.com
Cell: 505-301-6369


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