Yahoo Rl Polk Car Buying Study at J.D. Power and Associates Automotive Internet Roundtable

1. 2007 Dealer eBusiness
Performance Study:
The New Buying Influences
Presented by: Yahoo! and R. L. Polk & Co.

2. New buying influences
• Brand and dealership loyalty is
diminishing
• Consumers consider more makes,
models and dealerships,
broadening the top of the purchase
funnel
• New Internet-based influences act
like filters within the funnel
• Consumers use filters to narrow
their selection and determine who
they’ll do business with

3. Purchase funnel
Shopping filters
Pre-selection filter
• Search
• Advertising
• Website appearance
Engagement filter
• Initial response
• Quality of response
• Transparency of communication
Purchase filter
• Dealership reviews and rankings
• Sales professionalism, reviews and price

4. Research components
Five sub-studies
Two consumer surveys:
• 550 vehicle shoppers and purchasers
• 1000 vehicle purchasers
1 million leads from 1,140 dealerships representing
35 brands matched with DMV data to assess sales rates
and time to close
2100 dealerships in eMystery shop campaigns encompassing
20 brands
20 onsite visits to top performing dealers

5. Pre-selection filter
Car buying starts on the Internet
• Search is the primary tool
for filtering dealerships
• Website is a key extension
of the dealer's showroom
• Online advertising grows
dealer sphere of influence
R. L. Polk, Inc. Proprietary and Confidential. © 2007. All Rights Reserved.

6. All customers are Internet customers
Car shoppers are
qualifying dealers
by researching
online & using
search for vehicle
dealership
research
Base: Total Respondents (550)
Q4 When researching auto dealerships, which of these online search engines
did you use to obtain information? (Please select all that apply.)
QS10Which of the following resources ‘did you use to gather information while
shopping for your new vehicle?’ OR ‘are you using to gather information while
shopping for your new vehicle?’
Q0You mentioned that you used the resources shown below to research and
shop for new vehicles. How did you reach each of these websites?
Yahoo! Search Marketing Proprietary and Confidential. © 2007. All Rights Reserved.

7. Internet used more than traditional media
Did you do any of the following before actually
visiting the dealership?
Viewed cars/models available at the
48%
dealerships online
Online
See if they had a dealership website 37%
Find reviews about the dealership online 23%
Called to see what cars/models were
available 20%
Checked newspaper classifieds to try to
Offline
find more information on the dealership 12%
Used the yellow pages to look for the
dealership
11%
Base: Total Respondents (550)
Q14 Thinking about the last dealership you visited, did you do any of the
following before actually visiting the dealership?
Yahoo! Search Marketing Proprietary and Confidential. © 2007. All Rights Reserved.

8. Consumers consider multiple brands
Consumers visit an
average of 6
dealerships, but
they visit only one
dealership per
brand
Base: Total Respondents (550); Those Responding
QS6 Please select the statement that best describes your consideration of each
make listed below.
QS7 How many dealerships did you visit for each make?
Yahoo! Search Marketing Proprietary and Confidential. © 2007. All Rights Reserved.

9. Geographic area of consideration grows
A third of consumers
will drive more
than 20 miles
from home
68% of consumers are not
willing to travel more than
20 miles
32% of consumers are
willing to travel farther than
20 miles
Base: Total Respondents (546)*
* Don’t know responses removed
QS8 Again thinking about the dealerships you visited, think about how far each
dealership was from your home. In miles, please tell us the distance
between your home and the farthest dealership you visited for each make.
Yahoo! Search Marketing Proprietary and Confidential. © 2007. All Rights Reserved.

10. Internet is the primary resource for information
How do consumers find and choose which dealerships to visit?
(Choose from a list of 18 sources)
67%
64% Made me AWARE of
dealerships
Helped me LOCATE
the dealerships
40%
36%
30% 30% 31% 29% 29% 28%
26%
20% 20% 21%
18% 19% 17% 15%
12% 12%
Driven by Friends & Search Dealer OEM TV ads Newspaper Yellow Radio Billboards
or seen Family engines websites websites Classifieds Pages
before
Base: Total Respondents (550)
Q1a-Q1d Thinking about dealerships you’ve visited, which of the following…
made you aware of the dealerships?/helped you locate the dealerships?
Yahoo! Search Marketing Proprietary and Confidential. © 2007. All Rights Reserved.

11. Internet is the primary resource for information
How do consumers find and choose which dealerships to visit?
(Choose from a list of 18 sources)
Made me AWARE of
dealerships
Helped me LOCATE
the dealerships
36%
30% 31% 29%
26%
20%
Driven by Friends & Search Dealer OEM TV ads Newspaper Yellow Radio Billboards
or seen Family engines websites websites Classifieds Pages
before
Base: Total Respondents (550)
Q1a-Q1d Thinking about dealerships you’ve visited, which of the following…
made you aware of the dealerships?/helped you locate the dealerships?
Yahoo! Search Marketing Proprietary and Confidential. © 2007. All Rights Reserved.

12. Key online sources are used throughout
the shopping funnel
I used the following online sources to…
SEARCH DEALERSHIP 3RD PARTY SOCIAL
ENGINES WEBSITES OEM WEBSITES CONTENT SITES NETWORKING
Learn about vehicle
makes/models
Get a feel for the dealership
Find other buyer reviews on
dealerships
Find out how many dealers
were close to where I live
Find out if dealerships had
any special offers
Find out dealership inventory
on cars/models I want
Look up dealership address
and contact info
Base: Those Responding: Newspaper inserts/classified ads (173); Radio ads
(105) ; Local phone books (147); TV Ads (177); Magazines (68)
Indicates percentage is significantly higher than the all-source average at 95%
confidence
Q3 Now, thinking specifically about each of the resources you used to research
dealerships, which of the following helped you…
Yahoo! Search Marketing Proprietary and Confidential. © 2007. All Rights Reserved.

13. Consumers are submitting quotes
at multiple points
Did you submit any requests for price quotes on the Internet?
Base: Total (550); Submitted a price quote (346)
Q11: How many requests for price quotes did you submit on the Internet?
Q12: What kind of site(s) did you use to submit your price quote?
Yahoo! Search Marketing Proprietary and Confidential. © 2007. All Rights Reserved.

14. Engagement filter
Lead handling is key to performance
• Lost opportunity is high
because lead handling is poor
• Poor lead handling can also
cause brand defection
• Dealers can turn the tide
through transparency
R. L. Polk, Inc. Proprietary and Confidential. © 2007. All Rights Reserved.

15. Overall conversion is steady
One Million New Car Leads
45% of leads did not
convert
55% of leads
converted
Based on registration information supplied by R. L. Polk & Co.
Sales/leases have been adjusted for matching efficiency by a factor of 1.36,
which represents a 73% historical match rate
R. L. Polk, Inc. Proprietary and Confidential. © 2007. All Rights Reserved.

16. Lost opportunity is still high
Sold at “intended”
dealership
90% closed at a dealer
other than the one the
lead was sent to – “lost
opportunity”
Based on registration information supplied by R. L. Polk & Co.
Sales/leases have been adjusted for matching efficiency by a factor of 1.36,
which represents a 73% historical match rate
R. L. Polk, Inc. Proprietary and Confidential. © 2007. All Rights Reserved.

17. All “missed” sales
Sold at “intended”
dealership
Based on registration information supplied by R. L. Polk & Co.
Sales/leases have been adjusted for matching efficiency by a factor of 1.36,
which represents a 73% historical match rate
R. L. Polk, Inc. Proprietary and Confidential. © 2007. All Rights Reserved.

18. Too many leads go unanswered
2007
Overall responsiveness 68.6%
Response time average (hrs) 7.1
More than 30% of leads going unanswered.
Quality of responses:
Answered the shoppers questions 28.6%
Use brand or product highlight 25.5%
2007 R. L. Polk National eMystery Shop, Base: 2,111
R. L. Polk, Inc. Proprietary and Confidential. © 2007. All Rights Reserved.

19. Lead response time is slow
2007
Overall responsiveness 68.6%
Response time average (hrs) 5.4
20% of consumers
Quality of responses: want a response within 4 hours or
they’ll go someplace else.*
Answered the shoppers questions 28.6%
Use brand or product highlight 25.5%
2007 R. L. Polk National eMystery Shop, Base: 2,111
* “Cars Online 06/07: Understanding the Dynamics of Consumer Buying
Behavior and Customer Loyalty” CapGamini
R. L. Polk, Inc. Proprietary and Confidential. © 2007. All Rights Reserved.

20. Poor lead handling contributes to
brand defection
Why did you purchase a different brand than you submitted an online
inquiry about?
Of those that switched
brands, 23% did so
because of poor
dealer interaction
Poor or no Bad dealer
response experience
QV5 - Those who said they purchased a different make/brand than submitted an
inquiry about (301) Which of the following reasons describe why you purchased
another make/brand than you submitted an online inquiry about?
R. L. Polk, Inc. Proprietary and Confidential. © 2007. All Rights Reserved.

21. Quality of lead response is poor
2007
Overall responsiveness 68.6%
Response time average (hrs) 5.4
Quality of responses:
Answered the shoppers questions 25.0%
Use brand or product highlight 25.5%
2007 R. L. Polk National eMystery Shop, Base: 2,111
R. L. Polk, Inc. Proprietary and Confidential. © 2007. All Rights Reserved.

22. Quality of lead response is poor
2007
Overall responsiveness 68.6%
Response time average (hrs) 5.4
Quality of responses:
Answered the shoppers questions 25.0%
Used brand or product highlight 19.5%
2007 R. L. Polk National eMystery Shop, Base: 2,111
R. L. Polk, Inc. Proprietary and Confidential. © 2007. All Rights Reserved.

23. eMystery National Shop
2005 vs. 2007
2005 2007
Overall responsiveness 69.7% 68.6%
Response time average (hrs) 6.5 5.4
Quality of responses:
Answered the shoppers questions 25.9% 25.0%
Used brand or product highlights 30.4% 19.5%
2007 R. L. Polk National eMystery Shop, Base: 2,111
2005 R. L. Polk National eMystery shop, Base: 3,576
R. L. Polk, Inc. Proprietary and Confidential. © 2007. All Rights Reserved.

24. Purchase filter
Newest influence: dealer reputation
• The emergence of a
powerful new purchase filter
• Consumer ratings and
reviews influence purchase
decisions
• Dealership location and
loyalty are less of an
influence today
R. L. Polk, Inc. Proprietary and Confidential. © 2007. All Rights Reserved.

25. Newest influence: dealer reputation

26. Experiences influence other buyers

27. Dealership reviews/ranking
becoming more pervasive
How likely would you be to:
73%
58%
Base: Total Respondents (550)
Q7a Now we’d like you to imagine there was a dealership review site providing
customer satisfaction ratings generated by other customers who visited or
did business with the dealerships in your area. How likely would you be to
use this type of site?
Q7b And how likely would you be to post your own reviews or comments about
local dealerships on this site?
Yahoo! Search Marketing Proprietary and Confidential. © 2007. All Rights Reserved.

28. Impact of reputation is growing
Car purchasers who visited customer review sites said this
statement described them well:
Q13 - Those who visited at least one consumer opinion source/site (214)
Thinking about what you looked at on the customer opinion sites regarding car
dealerships, please tell us how much the following statements describe you and
your opinions where 5 means it you “describes you very well” and 1 means it
“doesn’t describe you at all.”
R. L. Polk, Inc. Proprietary and Confidential. © 2007. All Rights Reserved.

29. Impact of reputation is growing
Car purchasers who visited customer review sites said this
statement described them well:
Q13 - Those who visited at least one consumer opinion source/site (214)
Thinking about what you looked at on the customer opinion sites regarding car
dealerships, please tell us how much the following statements describe you and
your opinions where 5 means it you “describes you very well” and 1 means it
“doesn’t describe you at all.”
R. L. Polk, Inc. Proprietary and Confidential. © 2007. All Rights Reserved.

30. Impact of reputation is growing
Car purchasers who visited customer review sites said this
statement described them well:
Q13 - Those who visited at least one consumer opinion source/site (214)
Thinking about what you looked at on the customer opinion sites regarding car
dealerships, please tell us how much the following statements describe you and
your opinions where 5 means it you “describes you very well” and 1 means it
“doesn’t describe you at all.”
R. L. Polk, Inc. Proprietary and Confidential. © 2007. All Rights Reserved.

31. Impact of reputation is growing
Car purchasers who visited customer review sites said this
statement described them well:
Q13 - Those who visited at least one consumer opinion source/site (214)
Thinking about what you looked at on the customer opinion sites regarding car
dealerships, please tell us how much the following statements describe you and
your opinions where 5 means it you “describes you very well” and 1 means it
“doesn’t describe you at all.”
R. L. Polk, Inc. Proprietary and Confidential. © 2007. All Rights Reserved.

32. Dealership Preference Selector
R. L. Polk, Inc. Proprietary and Confidential. © 2007. All Rights Reserved.

33. Buying attribute importance
Price 7.75
Professional Sales staff 7.23
Online reviews 5.14
Location 1.85
Loyalty 1.32
Q13 - Those who visited at least one consumer opinion source/site (214)
Thinking about what you looked at on the customer opinion sites regarding car
dealerships, please tell us how much the following statements describe you and
your opinions where 5 means it you “describes you very well” and 1 means it
“doesn’t describe you at all.”
R. L. Polk, Inc. Proprietary and Confidential. © 2007. All Rights Reserved.

34. Summary and Implications
New filters influencing customers as they move through the
purchase funnel
• Online location and brand is as important as offline
Shoppers make decisions based on quality of early communication
• Quality of communication may be more important than ever
• Customers seek, value and reward transparency
Reliance on customer reviews and dealer ratings is increasing
• Invest in dealership staff to drive strong reviews
• Grow your review base to create a powerful marketing tool

35. Thank You.
For more information on the 2007 Dealer eBusiness Performance Study go to
www.yahoopolkresearch.com