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From Online Marketing to Online Sales: Shop-By-Payment Fills The Gap

As our industry looks to the future, many experts claim the next logical step from online marketing is online sales: that is, completing the car sales process, or as much of it as possible, online. According to an IBM study last year, 21% of new car buyers never test drove a car before purchasing it, that percentage is likely to grow. In 2012, CNW Research stated that only 13% of millennials say a new vehicle ranks as the number one product projecting enviable status. This utilitarian viewpoint of cars, combined with the millennials’ increased usage of mobile devices to conduct research, compare prices and shop online, indicates that future consumers will want more—if not all—of the car buying process to be completed online, and in as little time as possible.


Successfully serving this growing segment of consumers will require dealerships to shift from websites that are essentially online display showrooms to websites that help the customer accomplish as much of the deal online as possible. Currently, one of the major hurdles between engaging an online customer and closing an online sale is financing. Like other aspects of the car buying process, customers want to research financing on their own to ensure they are getting a vehicle that fits in their monthly budget. One way dealers can help them do this is to offer a shop-by-payment marketing tool on their website.


Traditional payment tools such as calculators, estimators and online credit applications fall short when it comes to giving customers what they want. Payment calculators and estimators are inaccurate because they depend on the customer providing their desired interest rate, which may not be realistic, as well as the purchase price of “a vehicle,” not a specific, in-stock unit that you’ve priced. Online credit applications require the customer to enter personal information and can have a negative impact on credit scores, so many prospective car buyers are hesitant to use them—especially customers with good credit.


A shop-by-payment tool allows customers on a dealer’s website to view the dealer’s entire inventory that matches their payment criteria. More importantly, the customers are pre-qualified for a real payment in the process, providing the dealer with high-quality, credit-analyzed leads. The shop-by-payment tool brings the customer further down funnel, closer to the purchase of a specific vehicle—bridging the gap between online marketing and online sales.


If you’re considering a shop-by-payment tool, ensure that it analyzes consumer credit using the “Three C’s” of successful payment marketing:


1) Credit: To provide an accurate payment quote, you must know the customer’s credit. Today’s technology can provide your dealership with an accurate score while maintaining the customer’s privacy and without negatively impacting their credit.


2) Criteria: A payment tool should be able to pre-qualify a customer based on a dealer’s specific financial criteria—that is, their current, real finance programs.


3) Collateral: Monthly payment quotes can vary based on what vehicle a customer wants to buy. Payment tools that can provide quotes for VIN-specific inventory help to set realistic expectations of what that customer will be able to afford.


If your dealership is considering taking the next steps towards closing more sales online, a shop-by-payment tool is the key to bridging the payments gap. To see a demo of this new technology, follow this link and click on the tab, “demo.” Let us know what you think!

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Tags: AutoUSA, DriveItNow, Internet, Marketing, Payment, Pro, auto, by, car, internet, More…leads, marketing, new, payment, quotes, shop, used, website


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Comment by Jerry Thompson on June 10, 2013 at 8:16am

Thanks Josh.  In your experience, what percentage of these 'online sale' transactions completed online end up as delivered cars?  Also, how many of the 'online sales' do you think end up in the vehicle they saw online and end up with the lender and payment that they prequalified for?

I totally agree that tools allowing accurate payments on specific vehicles create conversions and appreciate your addressing the topic with another great article.  We find that these tools increase customer engagement, specifically aiding them in selecting which dealer to visit, which leads to increased sales.  

Comment by Alexander Lau on June 10, 2013 at 7:46am

Great article!

Comment by Josh Vajda on June 10, 2013 at 7:44am

Jerry - I appreciate you dedicating time to craft a thoughtful and thorough response. To address your question:
I am curious as to how you define an "online sale?"

I defined 'online sale' as a transaction completed online. As you said, the overwhelming majority of customers now engage online during the shopping process (whether that's a visit to the dealer's or and independent site, the generation of a lead, etc), I consider all customers now "online customers." My point was that, while customers cannot go to dealer websites and place a car in their shopping cart and check out, tools that allow customers to get accurate payments on specific vehicles get us closer to that impending reality.

Alexander - agreed - the online experience is just part of "the customer experience."

Comment by Alexander Lau on June 10, 2013 at 6:17am

There are groups doing this now, however you define it, it's all about the user experience, which in this case is an E-commerce User Experience, but great article.

Agreed: "Traditional payment tools such as calculators, estimators and online credit applications fall short when it comes to giving customers what they want."

Comment by Jerry Thompson on June 9, 2013 at 9:15pm


I appreciate your expertise and enjoy reading your insightful posts regarding payment advertising.  I completely agree with your suppositions regarding the change in shopping behavior and expectations of online shoppers.  I think we are quite a ways off from dealers becoming delivery centers for cars but there is certainly a growing segment of shoppers that want to negotiate the best price, view rebate and incentive info, see how their trade figures in, and begin the credit process online. 

As dealers go a step further and also present these customers with real payment options, to the VIN level, we find that these dealers, crossing this last bridge of transparency, are selected over those that do not have payments on their websites and allowed the opportunity to sell the informed shopper a car.  Ultimately, after we provide them with the information they need to choose us, there is no substitute for a knowledgeable auto sales professional that can confirm and bring all the pieces of the puzzle together to close the transaction and create a satisfied customer.

You said that, "...Currently, one of the major hurdles between engaging an online customer and closing an online sale is financing."  I am curious as to how you define an "online sale?"  Where do you draw the line and say this “online customer” is now an “online sale” when the vast majority of customers begin the process shopping online and few, if any, end the process by signing online car purchase and finance documents to complete a sale?  As you make this statement, what is your point of delineation? 

You mention some of the pitfalls of “payment calculators” and their inherent inaccuracy and I couldn’t agree with you more.  The other side of the coin is that in some cases, the way payment calculators, and in particular, lease payment calculators, are deployed on dealer websites by their website company, and the OEMs, not only do they create payments that are not properly disclosed according to Reg M and Reg Z, they also create offers that are not real and fundable which can also cross the line of legality.  This could lead to advertising disclosure compliance enforcement actions that would hurt the industry as a whole.  

One of the largest dealer website companies has a calculator that shows default payments on the VDP that are typically much higher that what the dealer can actually provide by using the OEM lease and loan programs and also a lot higher than the advertised payment that brought the shopper there in the first place.  As a dealer, if you have a lower payment why not put your best foot forward and show it?!

As for your “Three C’s of successful payment marketing, we differ somewhat in approach.  My Three “Cs” would probably be Compliance, Customer engagement and Conversions. Obviously, in the quoting and qualification process you are going to consider their Credit, the lenders Criterion and the Collateral or your payments would not be accurate or relevant in the first place.  Whether you prequalify them up front or show them all the possible payments and prequalify them afterwards is a difference in philosophy.

While the technology is not new, my partner and I, filed our recently approved Patent eight years ago (USPTO 8209247), and have offered shop by payment tools for several years, until recently, the weight of consumer demands for information and transparency on dealer's websites and the shift of advertising dollars to digital marketing have created a tipping point of acceptance.  With publicity, and dealer marketing initiatives, from companies like AutoUSA and DealerTrack, not to mention what we are doing, real payments on vehicles and will hopefully become the norm for the betterment of the shopping process and the improved bottom line of participating dealers.

I applaud you for helping get the shop-by-payment message out and am impressed with your powerful and creative marketing messages. 

Jerry Thompson

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