How Auto Dealerships Use Business Text Messaging

We’ve teamed up with JD Power and Corso Consulting to conduct our own research and compile the latest data on business texting and how it relates to car dealerships. As you will see, texting has become the preferred channel of communication with dealerships and any dealer that is not engaging with their customers via text messaging is missing out.

The Rise of Business Texting

How did we get here? Many readers may remember 1998– when SMS texting became widely available. If you were part of the few that were willing to pay the fees and patient enough to tap out a message on a 9-key flip phone, you probably could never imagine how ubiquitous texting would become.

Gradually over the last two decades, texting has become our primary channel of communication–the place we turn to send and receive information. Texting is the channel that the vast majority of individuals, and by extension the world, uses to transact the business of their daily lives–including buying a car.

The State of Business Texting

Texting vs Email

Why is there such a great disparity between texting and email? After all, they both send digital messages instantly from one smartphone to another. The difference is a factor of trust–which is found in the answer to the question–“who can send messages to me?”

Anyone that has your email address (or buys a list) can send you an email. We tend to hold our phone numbers closer and only give them to people or companies we trust, so texting becomes a naturally curated inner-circle. The result is that we trust the sender of texts, and don’t trust the sender of emails. And because of this trust, we’re more likely to receive notifications, check often, and respond quickly to texts.

Texting vs Phone

Certainly phone calls must fare better against texting than email, right? Not really. Especially when it comes to customer communication.

Consumers have similar trust issues with phone calls as they do with emails. They don’t trust that businesses will value them enough to deliver important information in a personal way. Companies have misused phone communication for years. For this reason, iOS 13 released a new feature that allows you to ‘silence unknown callers’ which will all but eliminate robocalls from a business.

And while most consumers ignore phone calls from businesses, they feel entirely different about receiving texts from businesses.

Make it Snappy

In today’s on-demand world, consumers have grown accustomed to services being available instantly. They want effortless experiences delivered now. We wrote about this topic in-depth in our piece titled The Great Shift. Text messaging is ripe with the opportunity to deliver fast and frictionless experiences that today’s consumer has come to expect.

If you rely solely on email and/or phone to engage with customers, you are missing out on the most important factor leading to customer satisfaction.

The Unfortunate Reality at Dealerships

After reading through all of these compelling stats, you would think that the vast majority of dealerships would be taking advantage of such a rich opportunity. That’s not the case. Although dealerships have much to gain by being ahead of the curve, the data would suggest that most are not.

Of the small businesses we surveyed who use text messaging as a communication channel, a surprising 69% are using personal phones to connect with customers. This represents a large potential risk of lost information and breach in consumer privacy.

Texting’s Impact on Customer Service Index (CSI)

Generational Differences

With the adoption of any technology, there will be generational differences. Across all generations, automotive service customers have a strong preference for text messaging, however dealerships aren’t responding to their preference

Service Satisfaction

No one likes being left in the dark or having to constantly check in on progress when their vehicle is in for service. Texting is an easy way to deliver a better experience and keep customers informed. Texting not only outperforms phone calls, but creates a 190 point gap vs. no service advisor communication.

Service Loyalty

The true test of customer satisfaction is found in the answer to the question “Will you return?” In a recent report by Black Book, they indicated that the lifetime value of a loyal customer is over $53k. Service department use of text to keep customers informed creates the highest level of loyalty.

Texting’s Impact on Sales Satisfaction Index (SSI)

Generational Differences

Sales is the pipeline to the margin-rich service business opportunity. The generational differences we saw in service are greatly flattened when it comes to contacting sales. Across almost all generations, texting is the preferred method of making initial contact with the dealership.

Sales Satisfaction

As we stated already in this report, 76% of consumers say that speed is the most important factor in customer satisfaction. There’s no place that is more true than the sales process. Time is money. Texting is an easy way to speed things up and increase the bottom line. Buyers who text with their dealership report the best customer experience resulting in a 27 point gap in non-premium brands.

Sales Loyalty

“Will you buy again?” That’s the ultimate question and the one every dealer wants to know the answer to. Well, we’ve researched that for you. The answer is that they will be much more likely to buy again if you text or chat with them prior to their visit. We feel the reason for this is psychological. When texting or chatting, the buyer is able to stay emotionally anonymous. As one of our customers put it, “customers like some anonymity until they’ve decided that they actually want to do something with you.” The data seems to prove this.

Ready for your next step?

We think it should be texting with your customers. After this data-packed, industry specific report, we hope you agree. If you do, we recommend you text or chat with one of our Product Specialists at Podium. In fact, let’s try something fun–test us to see if we practice what we preach. Just go to Podium.com and click that little message box in the lower right corner of our site. We’ll text you right back.