As U.S. auto sales competition tightens for what is still a healthy pool of customers, brands are turning to traditional levers such as bigger financial incentives. Hyundai, however, is bringing something new to the game: a program called Shopper Assurance that aims to improve the buying experience.
The pitch to customers: “We’ve simplified every step of the process to help make buying your new car as enjoyable as driving it.” It’s launching in Miami, Orlando, Dallas and Houston and will roll out to all U.S. Hyundai dealers early next year.
The car buying experience is infamously frustrating to American consumers and especially to millennials, who want to handle as much of the process as possible online, such as how Tesla offers. But Hyundai’s research found that if the brand could address four pain points, 84% of consumers would visit a dealership that offered solutions over one that did not.
“It is the future of car-buying, and our commitment to creating a flexible, efficient and better way to purchase a car in partnership with our dealer body,” stated Dean Evans, CMO of Hyundai Motor America.
That’s why Shopper Assurance offers:
- Transparent Pricing: Participating dealers post the fair market pricing on their websites (MSRP minus incentives and any dealer-offered discounts) so customers know exactly what the market pricing is for the vehicle, reducing negotiating time and eliminating the frustration of widely advertised incentives not being available on dealer web sites.
- Flexible Test Drive: Customers can contact the dealer through a Hyundai platform that allows them to schedule a test drive by phone or by app in available markets, for delivery of the test-drive vehicle at a location of their choice.
- Streamlined Purchase: Buyers can complete most paperwork online before visiting the dealereship for a vehicle in the dealer’s inventory, including applying for financing, obtaining credit approvals, calculating payment estimates and valuing trade-ins.
- Three-Day Money-Back Guarantee: Return the car for a full refund as long as it’s got less than 300 miles.
“For nearly a decade, the word ‘Assurance’ has been synonymous with Hyundai and represents our efforts in redefining the car ownership experience,” Evans noted. “Shopper Assurance is the next step in that tradition and is car buying made simple. We expect this to be a differentiator, as our research showed that 84% of people would visit a dealership that offered all four features over one that did not. It is the future of car buying, and our commitment to creating a flexible, efficient and better way to purchase a car in partnership with our dealer body.”
Hyundai hopes that improving the customer experience will lift sales in the U.S., which were down by 15% through September compared with a year earlier, while the overall light-vehicle market was down only less than 2 percent in the same period.
Hyundai has struggled mainly with the fact that it’s relatively light on SUVs and crossovers compared with sedans, and American consumers have shifted significantly away from the latter. Hyundai hopes to get about 700 of its 820 dealers to go with the voluntary Shopper Assurance program. Its Genesis luxury brand will get something similar in 2018.
For more insights, we spoke with Dean Evans (right).
How did you settle on the four pillars of the Shopper Assurance program?
We did extensive research, some of that internally over the last two years, asking customers what they wanted. We had good ideas, from being close to customers for years, about test drives. And what were other companies like Amazon and other remote business models like grocery stores doing to bring products to people? There were some studies out there and we said, look at the pain (points).
How does Shopper Assurance balance the growing expectations that consumers have for being able to handle most of the car-buying experience digitally with the need to also improve what happens in the dealership?
It’s a balancing act all the time with retailers and customers. Every store runs a little differently. We’re trying to highlight overall improvement categories like time saved without being too prescriptive, and dial in a better experience over time.
When you hear millennials don’t care to go into dealerships, can you address that?
We have to be good at bricks-and-mortar and online. How we’re utilizing the human in the middle isn’t one or the other. It’s about who’s integrating all that newness in the model that works best for the customer and for the brand.
How transparent is pricing under Shopper Assurance? You’ve still got the issue of trade-in values.
We can’t dictate pricing to the dealer body, but we recognize in the marketplace that there is a transaction price that consumers all kind of figure out and go get in the research process through TrueCar and Edmunds and so on. When a customer comes to a Hyundai retailer, especially online, I want that number that they want to sell their car for to be about the same as everyone online says it should be. We want our price to validate that.
Because of all those variables, and because the dealer network is at various stages of adoption, we’re staying at the high level in this year. But some dealers, even tomorrow, could be down to the penny with the price, a guaranteed trade-in and digital signage online. I want the customer to see only maybe a $500 difference between my trade and what they see on Kelly Blue Book and CarMax. We’re trying to show them transparency, not guaranteeing some online transactional-level sale price.
Do consumers remember Hyundai Assurance, which you launched in 2009 to guarantee you’d pick up car payments if someone bought a Hyundai and later lost their job?
What they think of Hyundia today is that we’re definitely a value brand and a rational brand, and with these assurances, and they pop up every once in a while. That’s why we attach this to “Assurance”: There’s some value in that and we love the word. How do we make the customer more at the center of our world? We think this could be the Assurance that’s most memorable over time.
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