Have you ever wondered why car shoppers wind up on third-party sites like AutoTrader, CarGurus, TrueCar and Cars.com? After all, none of these sites own inventory or can sell a car.
It all comes down to psychology: the overwhelming emotion that consumers feel during the car-buying process is fear, and it kills conversions and lowers gross-profit.
The end result is the perpetuation of what I call the "circle of distrust."
It is this psychology of fear and distrust that drives car shoppers to third-party sites seeking reassurance. They are so uncomfortable with car dealerships that they seek external resources to affirm the dealership choice they are making. Sometimes, that "third party" can be a trusted friend or family member that has personal experience with the dealership, but more frequently, the car buyer is on their own when choosing a dealership.
The lack of trust between buyers and dealers, along with the advent of the Internet, led to a proliferation of third-party sites designed to intervene and protect the consumer — which is why dealers began investing with these sites; to bring them buyers. Dealers had little to no trust equity with buyers, so they unknowingly began "renting" trust from third parties.
The challenge is that these "outsider" messages are often detrimental to the dealerships because these third parties accept the "rent" dealers are paying, and spend it on promotions that exploit consumers' fear and distrust of dealerships. In essence, the third-party sites are actually renting trust to car dealerships to fund their own advertising campaigns to capture more consumer trust.
These ads typically suggest that buyers would be better-positioned and protected by leveraging the respective third-party site. In turn, this tactic further erodes trust between consumers and dealerships, exacerbating the original problem and leaving dealers in a constant state where "renting trust" seems like the best solution.
At its core, the most important element of a car deal is trust. Why? Trust means higher closing percentages and higher gross-profit. It means building a relationship directly with consumers, earning their loyalty and referrals.
The only way to escape the circle of distrust is to focus on building trust with your customers, employees, and community. Every business decision made should ultimately build trust. If it won't, then the decision needs to be reconsidered. Dealers must be hyper-focused on building trust in their process, advertising, and every single touch point.
Here are three ways that dealers can build trust to break the circle of distrust:
1. Focus on online reviews. If car buyers don't have friends or family who have had experience with your dealership, the next best place for them to discover more about what to expect is by reading what strangers are saying. Consider negative reviews and respond appropriately because this feedback will help you see where you are falling short on the trust scale. Research shows that dealerships with fewer or poorly rated reviews are spending more money renting trust from third-parties.
2. Offer more consistent and transparent pricing across all channels. Typically, a consumer visits 20 websites throughout the buying process. If you rent trust from third-parties and have different pricing on different sites, including your own website, this will reinforce a customer's distrust. The primary reason that car buyers say they chose one dealer over another is transparent pricing. So, if they see one price on your website and a different one on a third-party site, it will negatively impact their perception of your dealership.
3. Make the process easier and faster. The top complaint from buyers is the length of time it takes to buy a car. Leverage the right technology to make it easier and more convenient for them to buy from you than from any other dealership.
On the most basic level, trust is a firm belief in someone's reliability. When we trust a dealership — and the individuals who work there — we are confident in their honesty and integrity. Building a foundation of trust with consumers and employees is crucial for the long-term success of your business, so make sure you're positioning your dealership as fair, transparent, and consistent.
