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The Detroit Bureau
Mercedes-Benz Tops New Car Shopper Satisfaction Survey
Showroom policies likely to close – or lose – deals.
When she began looking for a new car, Chris Anderson had her heart set on a midsize Ford sedan. But in the end, she wound up buying from the Detroit maker's cross-town rival General Motors. It wasn't that she liked her new car better.
It was the dealer she liked – or more precisely, the Ford dealer she didn't want to buy from.
And the Detroit saleswoman is not alone.
What happens when a customer walks into the showroom can have a big impact on what they buy – or where they buy – says Fran O'Hagan, an automotive analyst whose annual Pied Piper Prospect Satisfaction Index is aimed at measuring which dealers and brands do the best job in treating prospective car shoppers.
And this year, the study found Mercedes-Benz repeating as the industry leader.
The Pied Piper study relies on so-called “mystery shoppers” who go through the car buying process at thousands of U.S. showrooms each year subtly notating how well salespeople handle such basics as providing buyers with a vehicle walk-around, brochures and test drives, things O'Hagan explains “correlate highly with whether a customer buys.”
Not surprisingly, he adds, manufacturers who have carefully defined the sales process and who have convinced dealers to consistently adopt those practices tend to have a significantly higher closing rate – the percentage of customers who walk into a showroom who actually drive off with a new vehicle.
For the industry, as a whole, the figure is a mere 15 to 20%.
The good news, contends California-based O'Hagan, is that, on the whole, “dealerships all over the U.S. do a better job selling cars today” than they did when the first Pied Piper Satisfaction Index, or PPSI, was released in 2007.
That said, there's a big gap between the best and worst brands and showrooms and, the analyst cautions, there have actually been some setbacks in recent years.
O'Hagan revised the study this year but found those brands that have traditional done well continued to lead the pack, while marques that previously fell to the bottom continued to lag.
Mercedes-Benz came in at the top with a score of 113, followed by Infiniti at 110, Lexus at 106, and Audi and GMC tied at 104.
Mercedes, O'Hagan notes, has been the industry leader for four years running – after long being a mid-pack brand.
That reflects a conscious corporate decision to improve the way the German maker's U.S. dealers treated customers – and it was reflected in not only improve PPSI scores but improved closing rates.
“The way your salespeople sell is relatively simple to change,” the analyst suggests, “and the payoff is more sales.”
So, perhaps, it's not surprising that some of the market's poorer-performing brands lag in the dealer survey, Scion at the bottom with a score of 88, Mitsubishi at 89, and Mazda and Chrysler following with scores tied at 94.
It's perhaps less of a surprise that Lincoln, rounding out the bottom five with a score of 96, has said it wants to transform the sales experience at its showrooms as it rebuilds the brand.
Part of the challenge, however, is to not just lay out a better sales process on paper, O'Hagan stresses, but actually to get dealers to buy in – consistently.
“There are some Scion and Mitsubishi dealers who perform brilliantly,” he explains, but they don't do so consistently.”
Some of the things that distinguish a good dealer from a bad appear unexpectedly simple.
It starts with the way shoppers are greeted when they walk into a showroom.
Pied Piper's mystery shoppers are told to record whether they are given brochures and offered test drives. Putting a shopper behind the wheel, O'Hagan notes, is one of the most effective ways to clinch a deal.
Yet, one of the biggest surprises is how often sales people fail to ask the most basic question: “Are you ready to buy?”
While the PPSI suggests the car buying process has, on the whole, improved, there were some setbacks and weak points.
O'Hagan says the biggest problem is the Internet.
About 80% of U.S. car shoppers now begin the buying process online, he notes. But there's a big difference between the way good and bad dealers respond. Among those in the top quartile of the 2013 survey, 93% will respond to a customer's online query within 24 hours. Among dealers in the bottom quartile, only 16% respond.
“The internet side of the business is the wild west,” O'Hagan says. “There's a huge difference between dealers that do a good job and a bad job selling online,” and in the long run, that can make the difference between not only success or failure for a showroom but for the brand it represents.
The Detroit Bureau
Mercedes Doing the Best to Close the Deal
Mercedes-Benz dealers are most likely to deliver customers the sort of shopping experience they want – and then close the deal, according to a new study.
Asian luxury dealers were close behind, along with Jaguar and Cadillac, according to the latest Pied Piper Prospect Satisfaction Index which uses so-called “mystery shoppers” to measure the way potential car buyers are treated.
The study looks at 60 different sales activities, from the simple act of greeting a customer when they walk into the showroom to providing a test drive.
Surprisingly, salespeople proved reluctant to take one of the most important steps of all, actually asking a prospect if they're ready to close the deal.
“The world has changed dramatically with the advent of the Internet,” said Pied Piper research chief Fran O'Hagan. Twenty years ago, the dealer was the gatekeeper, controlling every aspect of the car buying process.
Today, however, “A customer can go to the showroom knowing as much as you want.
So, the role of the salesperson has changed.”
And so has the balance of power.
The best dealerships recognize and adapt to this shift, he explained, noting that the pace of change is so rapid – and the best brands have adapted so quickly – that a company that scored third in the Pied Piper study in 2008 would rank near the bottom in 2012 with the same score.
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Mercedes-Benz Tops at Handling Shoppers, Finds New Study, But even the best makers have slipped coming out of recession
Mercedes-Benz is doing the best job treating potential buyers when they walk into the showroom, reports a new study, which is one reason the maker has continued building demand as the luxury market recovers.
But while it's the third year in a row that the German marque led the annual Pied Piper Prospect Satisfaction Index, its score actually slipped from last year, and the industry, on the whole, has seen a declining in the handling of “ups,” or customers who come to the showroom, cautions analyst Fran O'Hagan.
“Industry-wide, treatment of car shoppers has declined almost across the board,” said O'Hagan, adding that “the easiest explanation is that the number of salespeople declined during the recession and has yet to bounce back, even though sales are picking up again.”
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The Detroit Bureau
Mercedes Dealers Best At Treating Potential Customers
Product, product, product?
Perhaps, but even the best vehicles won?t sell unless dealers know how to work with their customers, and according to a new study, Mercedes-Benz leads the way when it comes to doing the best job on the showroom floor.
Not surprisingly, luxury makers lead the way when it comes to satisfying customers during the shopping experience, according to the latest annual Pied Piper Prospect Satisfaction Index, which uses a cadre of ?mystery shoppers? to see how dealers across the country perform.
Lexus ranked second, in the PSI, with Land Rover, Acura and Jaguar rounding out the Top Five.
But Detroit brands lead the way, in the 2010 study, when it comes to improving the way their dealers work with customers.
Ford, Lincoln and Chevrolet all scored above industry average for the first time since the study was launched, four years ago.
In fact, Chevy was the only mainstream brand in the Top Ten, followed by Ford and Honda.
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Mercedes-Benz on top of shopping survey: Study finds many makers losing frustrated customers.
A happy customer, it's been said, is a repeat customer.
Yet a surprising number of automakers and their dealers seem to almost go out of their way to frustrate potential buyers, sending them scampering over to the competition.
That's a key finding of the Prospect Satisfaction Index, an annual study by the California research firm, Pied Piper.
It reveals that Mercedes-Benz dealerships ranked highest in the newly released 2009 PSI, which looks at hidden facets of sales process, and how lookers are converted into serious prospects.
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