Rethinking the Approach
According to Google’s Think Auto report, 29% of car buyers would consider purchasing their next vehicle online, and 40% of millennials are confident about doing so. Given this shift, it became imperative to assess how chat applications influence consumer experiences, lead generation, and overall sales effectiveness for dealerships.
To evaluate the role of chat in automotive retailing, 7 Communications conducted a national research study using 570 mystery shop sessions across 192 Canadian dealerships, analyzing chat effectiveness across three key phases of the buyer journey.
- Shopping Stage: Initial inquiries about dealership policies, vehicle availability, and general information.
- Consideration Stage: More in-depth questions about specific models, inventory, pricing, and offers.
- Decision Stage: Discussions related to finalizing a purchase, booking test drives, and financing options.
Despite dealerships investing in chat applications to streamline digital interactions, their actual effectiveness in converting leads and supporting the car-buying process remained uncertain. Key challenges identified included:
- Incomplete Chat Sessions:
- Across all three phases, 55% of chat interactions were incomplete, with dealerships failing to fully engage or answer customer inquiries.
- Unresponsive agents, unsuccessful transfers to sales representatives, and terminated conversations significantly hampered the digital customer experience.
- Ineffective Lead Follow-Up:
- While 74% of dealerships captured leads during chat sessions, only 46% followed up beyond an automated response.
- This lack of engagement resulted in lost sales opportunities, as consumers often moved on to competitors.
- Limited Chat Capabilities:
- Many chat agents (both human and AI-driven) were unable to answer basic dealership or inventory-related questions.
- Only 33% of chat sessions in the Decision Stage included branded assets (brochures, videos, pricing details)—missing a critical opportunity to convert prospects.
- Dependence on Store Salespeople:
- While human agents could troubleshoot better than chatbots, only 30% of chat sessions in the Decision Stage were fully completed—indicating that chat applications alone are not yet capable of handling high-intent buyer inquiries.
Despite dealerships investing in chat applications to streamline digital interactions, their actual effectiveness in converting leads and supporting the car-buying process remained uncertain. Key challenges identified included:
- Incomplete Chat Sessions:
- Across all three phases, 55% of chat interactions were incomplete, with dealerships failing to fully engage or answer customer inquiries.
- Unresponsive agents, unsuccessful transfers to sales representatives, and terminated conversations significantly hampered the digital customer experience.
- Ineffective Lead Follow-Up:
- While 74% of dealerships captured leads during chat sessions, only 46% followed up beyond an automated response.
- This lack of engagement resulted in lost sales opportunities, as consumers often moved on to competitors.
- Limited Chat Capabilities:
- Many chat agents (both human and AI-driven) were unable to answer basic dealership or inventory-related questions.
- Only 33% of chat sessions in the Decision Stage included branded assets (brochures, videos, pricing details)—missing a critical opportunity to convert prospects.
- Dependence on Store Salespeople:
- While human agents could troubleshoot better than chatbots, only 30% of chat sessions in the Decision Stage were fully completed—indicating that chat applications alone are not yet capable of handling high-intent buyer inquiries.
7 Communications identified several key opportunities to enhance the effectiveness of chat in automotive retailing:
- Enhancing Responsiveness & Completion Rates:
- Dealerships need to prioritize chat as an active lead engagement tool, ensuring all chat sessions are answered and completed.
- Implementing structured training programs for chat agents and store salespeople can help improve response times and accuracy.
- Improving Lead Nurturing & Follow-Up:
- Dealerships should treat digital leads with the same urgency as walk-in customers, integrating chat leads directly into their CRM for proactive follow-up.
- Automating personalized responses beyond a generic thank-you email can improve customer retention and conversion rates.
- Integrating Branded Assets & Sales Content:
- Providing high-quality images, videos, brochures, and promotional offers within chat sessions can keep customers engaged and informed.
- Phase 2 results showed that agents who proactively shared branded assets had higher engagement rates, demonstrating the importance of visual and interactive content.
- Championing Store Salespeople’s Role in Chat:
- Ensuring that store salespeople actively participate in digital chat sessions can bridge the knowledge gap between online inquiries and in-person visits.
- Investing in chat-to-video or live agent handoff features can improve customer trust and facilitate conversions.
- Refining AI & Chatbot Capabilities:
- AI-driven chatbots need to be trained beyond scripted responses to handle more complex automotive queries.
- Hybrid models (AI + human agents) should be deployed to escalate inquiries seamlessly when necessary.
The findings from this research provided critical insights into how dealerships can optimize their digital retailing strategy:
- Reduction in incomplete chat sessions: By addressing agent availability and improving pass-through rates, dealerships can significantly reduce the 55% failure rate in chat interactions.
- Increase in lead conversion rates: Structured follow-up strategies can turn the 74% of captured leads into tangible sales opportunities, preventing loss due to lack of engagement.
- Improved customer satisfaction and trust: By integrating branded assets (brochures, videos, offers) in at least 50% of chat sessions, dealerships can enhance customer experience and nurture stronger relationships.
- Optimized use of sales teams in digital retailing: By ensuring salespeople are involved in the Decision Stage, dealerships can more effectively guide high-intent buyers toward purchase completion.
Ultimately, the study revealed that chat can be a powerful tool for automotive digital retailing if properly implemented and managed. Dealerships that prioritize seamless chat experiences, lead follow-ups, and proactive engagement will be best positioned to capitalize on the growing trend of online car buying.
Core Contributors
.jpg)
