Primary research can be extremely valuable for the automotive sector. In fact, it has the potential to impact the numbers that count.
Autotrader's story is one example of how primary research can give you invaluable insight into your customers' buying behaviour. Autotrader is in the businesses of connecting car buyers to car sellers. There are a range of people who advertise on their website; private sellers buying ads to list car(s), automotive dealers and associations, ad agencies and auto manufacturers.
The company website receives upwards of 15 million unique visitors per month. However, it was difficult for them to gauge how consumers were responding to online advertising. Many advertisers looked at metrics like the number of phone call and email leads. However, in reality, very few automotive shoppers call or email the dealership while shopping for a car.
To figure out how advertising impacted the volume of walk-in traffic at dealerships across the nation, it was essential to understand how shoppers made initial contact with the dealer, whether or not they were autotrader.com customers.
At geographically diverse dealerships (including manufacturers, independent and franchise dealership types, luxury and non-luxury brands, new and used), shoppers were intercepted as they were leaving, at times throughout the week which were varied to capture high and low traffic days.
It was found that dealers' perceptions did not align with the consumers' actual behaviour:
- Advertising accounted for roughly 25% of all dealer walk-in traffic
- Advertising drives more dealer walk-in traffic than friends and family
- 54% of shoppers said that they were lead to the dealership by internet
Therefore, the internet is the main source which drives dealer walk-in traffic.
To determine which websites were responsible for driving walk-in traffic, further research was conducted. Independent sites drive roughly half (45%) of all dealer walk-in traffic by the internet, followed by dealer sites (32%), search sites (14%), manufacturer sites (6%) and other sites (3%).
Despite the findings, car dealers were still not convinced, arguing that the data was weighted and the study was controlled. The research was then modified to focus on car buyers at individual stores instead of all car shoppers visiting dealerships. To do so, buyer lists were sourced from dealer clients, and customers were contacted over the phone after they had made a purchase. In total, over 75,000 car buyers were interviewed.
To gauge the effectiveness of this research, the purpose and outcome was determined by surveying salespeople 3 months after the study was completed.
According to salespeople, the purpose of their research was to show value (73%), up-sell (42%), save downgrades (34%), and save or win back cancellations (17%). After 3 months, the results were either no change (44%), saved downgrades (25%), up-sell (20%), and saved cancellations (11%).
Primary research can be used to help Autotrader.com salespeople consult customers. For example, in consulting national customers who display advertising on the site, they can conduct exposed/unexposed ad effectiveness to help them understand the impact of their campaigns.
To do this max-diff messaging tests were conducted to understand which messaging appealed to car shoppers when selecting a car. After testing 39 different messages, a simulator called the Autotrader Messaging Wizard was created for salespeople to use when discussing marketing messaging with customers.
In this wizard, filters like "new car shoppers" can be applied along with company differentiators (eg. family owned, free maintenance, ease of financing). The simulator then ranks from high to low which message is most motivating to the shoppers they are targeting.
Whilst primary research can reap valuable insights, it is impossible to measure everything. for example, there will always be shoppers who come to the dealership and leave without buying anything, for various reasons (they couldn't agree on price, or the dealer didn't have the car they were after).
In Autotrader's case, the ultimate measure of the effectiveness of primary research is the number of customers saved from downgrades, and the number upsold.