TransUnion Live – Driving a Smooth Auto Buying Experience Post Pandemic

With auto inventory finally increasing and interest rates staying stubbornly high, savvy consumers are spending more time online comparing car models, prices and reviews. This more thoughtful approach is driving the need to ensure smooth engagements and transactions more than ever. Watch our on-demand TransUnion Live where we explored evolving auto buyer preferences based on brand-new TransUnion research, including what dealers and lenders can do to make purchase decisions easier for consumers.

To view the infographic featuring insights from our recent auto consumer survey, visit transunion.com/auto-survey.

Full Transcript Below

Andrew Goss/Host, TransUnion:

Well, welcome everyone to another episode of TransUnion Live on LinkedIn. I'm Andrew Goss and I'm excited to be joined by my esteemed colleague, Satyan Merchant, and I'm especially excited to be joined by the founder of the Pasch Group and CEO of the Automotive Standards Council, Brian Pasch. Welcome you two.

Satyan Merchant/SVP Auto and Mortgage, TransUnion:

Pleasure to be here.

Brian Pasch/Founder, Pasch Group:

Yeah, thanks for having us.

Andrew Goss/Host, TransUnion:

Yeah, thank you. So we're here today to explore what TransUnion recently uncovered in a consumer survey around their preferences with auto buying experiences. And specifically Brian, we want him to focus on his opinions about what dealers should be thinking about when it comes to auto retail. Before we get started, I have a quick housekeeping note. I always begin with for the audience, we welcome your questions related to today's conversation and the comments area. If they're applicable and we don't get to them, we'll do our best to respond to you afterwards. Now, let's get started. First off, I always like to get a lay of the land to begin these episodes. So Sien, can you give us a high-level overview of the recent TransUnion auto research we'll be discussing today really from a consumer point of view, and Brian, take it from a dealer point of view.

Satyan Merchant/SVP Auto and Mortgage, TransUnion:

Sure, Andrew, I'll jump in and I think this is great with the consumer lens from TransUnion married up with the dealer lens that Brian's going to bring. I think we'll have a great discussion. I'll talk very briefly about the survey that we did. It was in late 2023, late last year, about 400 consumers responded to our survey. These are consumers who purchased the vehicle in the last 12 months from the time of the survey and we asked them questions about everything in the vehicle buying process from research to financing all the way to purchasing the vehicle. There's quite a bit in there, I'm sure over the course of this conversation we'll get into it, but I would say there's maybe three or four five key points that I'll frame up for this conversation. Not all of them are terribly surprising, but I think there's some depth to these things.

So number one, consumer consumers, not surprisingly use the internet and digital tools when shopping for a vehicle, but I think the key point that couples with this is that they also really enjoy the human touch and in the right way, want that human touch. So it's quite rare that we found that a consumer would have a full digital, no interaction with a human. It's an online to offline process. Speaking of the online piece around that topic, online forms are very important in the process, but in a way they can be make or break for the consumer. They're important, but they can also be a hassle if a consumer submits a lead or submits information in a form and they don't feel that it's enjoying or enhancing their process. Another piece here is around affordability. We all know for a consumer lens and really from a market lens, Brian, I'm sure you'll be able to talk about this.

Affordability is something top of mind for consumers. And what we've found in this survey, it's confirmed what we've been talking about for years and that affordability is more and more important early and earlier in the process. So there's ways for dealers and retailers to think about that. And then I think lastly, I'll just wrap all of those up into one point here, which is ultimately the consumer wants a personalized experience. The consumer wants to engage and interact with the dealership. It's a very emotional purchase. So we have a world where consumers are trained now with what I call maybe the Amazon effect, right place, right time shopping when they want, but it's not purchasing on garden, Amazon, Amazon, it's purchasing your vehicle. And so from that lens, dealers really have an important role to play if they can get it right and meet that consumer how they want, where they want and when they want.

Brian Pasch/Founder, Pasch Group:

Yeah. Let me add a dealer perspective or mindset. I think today, not all dealers, but many dealers are facing slower turn of their inventory floor plan costs are going up. And in fact I published today on LinkedIn since we're on LinkedIn, a little humorous, but serious article that many marketing managers are being asked by general managers, general leaders, dealer principals, we need more leads, we need more leads. And what they're asking the marketing managers to do is to add more popups, add more forms, add more coupons, add more. So it almost becomes like the whack-a-mole game that you would play at a carnival from the TransUnion research. I think it's very important to understand that for this sample set, 40% of the virus never filled out a form. And why is this important? You can't force a consumer to convert to a lead form if there's no value exchange.

And if you do lead gate something they're likely going to put in their Yahoo or an AOL email address that is just a push to break through to the information they want. So number one from the TransUnion study, 40% never failed a form. When the consumers were asked which channels they preferred about a third said, hey, I just like to go to the dealership and other thirds said I'm communicating via email to a lesser degree texting. That was interesting. And I don't know if that's because the dealers are afraid to text or consumers are not feeling comfortable like to texting with a dealer as they would a friend.

But what's clear to me from the dealers I'm speaking with, less than 10% of all transactions today are happening fully online. So dealers really need to understand how their website design impacts the shopper experience, how their lead follow-up process impacts sales. And one more point that I thought was very interesting from your data study is when did they fill out the lead form and 20% did it the same day like, hey, I'm going out to buy a car today. Let me fill out this information, maybe set an appointment another 15% the day before and then two to three days was another 27%. You had those things up. Consumers are feeling less inclined to submit a lead weeks before, and I think this is because they know prices change, maybe their needs change offers and incentives change. So dealers who have sloppy lead processes could very well lose the sale because the window of time that the lead is being submitted to when they purchase, and we'll get into it later, but since the primary channel that dealers use to follow up on leads is the phone call. What if consumers have no incentive to pick up the call and we'll get to that later in the data study.

Satyan Merchant/SVP Auto and Mortgage, TransUnion:

Yeah, Brian, great points. There are a couple really good points I wanted to just pick up on, which is a theme. I'm sure we'll continue to talk about that exchange of value. And there's almost some paradoxical information that we got from this survey. It does come back to that exchange of value. I mean to me, at the end of the day, what jumped out is consumers are willing to engage in a transaction in which they are getting value for what they're giving. When it comes to lead forms, again, as you said, 40% don't complete an online form, 60% do those do. It's because they're looking for an exchange of value, whether that's a prequalification so they can understand what they can afford or what they can buy, whether it's a way to get a human to follow up with them, to talk to them more about the vehicle or schedule a test drive. And I think that where we found from consumers, the dealers trip up on this exchange of value on these lead forms is what a consumer wants to provide information, provide more, offer something to the dealer, and the dealer instead is asking them to tell them their name again, tell them their address again, repeat stuff that frankly a dealer should already know. So I'll kind of tee that up further down in this conversation.

Brian Pasch/Founder, Pasch Group:

It's a very interesting point because I've been doing some visual studies for dealer groups on how to improve their online engagement, right? I hate to use conversion because not everyone's going to fill out a form, but you brought up a great point from the data study. One of the complaints about the forms was they would've expected it to be prefilled because they already filled out something on the dealership's website before. And so let me just say that from the study data, consumers were pre-qualifying more than trading, meaning they had a higher interest to know what they could qualify for to purchase versus the number of people said, hey, I also wanted to do my trade online. And I want to be mindful that what I see today is dealers who have a digital retailing tool, which can do pre-qual, which can show payments, but then they throw another pre-qual tool because more is better, more popups are better.

But the sad thing is is that these two tools provide different data points, different values, different price ranges, and this is very, very dangerous if a dealer is using a digital retailing tool online in the showroom, that's the pre-qual tool they should be using on their website because setting the wrong expectations since this data study said that one of the reasons why they filled out the form, I think was the number one reason was to see what they could qualify for exactly if they get in the dealership. And that story changes because the pre-qual tool was this one-off little gimmick and the real pre-qual was built into their digital retailing, giving them a different set of lenders, a different set of interest rates that could be a breaking point for trust with a consumer and the dealer.

Andrew Goss/Host, TransUnion:

Yeah, I mean all great points. Everything I can think about my experiences as well aligns exactly with what you all are talking about. And we're spending a lot of time on digital, right? We focused a little bit on the phone channel, but the survey really pointed to some really eye-opening findings. I thought around the phone channel when it comes to car shopping, somewhat of what's old is new again scenario. So let's pick up on that. Let let's get into the phone channel and some of the findings.

Satyan Merchant/SVP Auto and Mortgage, TransUnion:

Sure. Let me jump in here. I think this continues from the conversation, the comments that Brian just made the survey. What we found about the phone channel at the top level here is that consumers absolutely want to speak on the phone when they're purchasing a vehicle or when they're in the process of shopping for a vehicle. It's part of the digital experience. And I want to zoom that out further, Andrew. It's part of the shopping experience and the conversation. So I think what I'm finding here in this survey, and of course some of the insights from Brian is that the whole experience is a conversation and the conversation may start online. And again, whatever a consumer might have submitted online, they then want to ensure that when they pick up that conversation either on the phone or in the dealership in the showroom, it's as if Brian and I were speaking here on LinkedIn live and then we see each other next week in person.

Brian doesn't have to introduce himself to me again. Brian doesn't have to tell me what his interests are again, and I think the phone in particular is a channel where consumers want to have that as part of the experience. Back to the point earlier of it's a very emotional thing. It's not like ordering a stapler right here on my desk online. So you want to talk and talk to somebody who can really help you with it. The key is we all know how it is with phones. Does anyone here pick up a phone if they don't know a friend who's calling them or somebody trusted who's calling them? The answer is no. And this is exactly what we found in the survey. Nine out of 10 consumers in the survey, 90% said they would be more likely to answer the phone if the dealership identified itself through a caller ID or a logo on their phone. And again, that's like carrying a conversation with a person. On the other end of the line, you're going to speak to somebody, you're not going to speak to somebody who you don't know or who's calling you and asking you who you are again for the third or fourth time.

Brian Pasch/Founder, Pasch Group:

Yes, and I want to dig into that a little further because TransUnion has a platform to help dealers improve their outbound connection rates called Trusted Call Solutions. And let me set the context for dealers. There are many dealers who have excellent internet lead follow up process. In fact, the survey showed how quickly dealers responded to leads. And I'm just going to speak to the dealers who are laser focused on their internet lead process. Because if someone isn't really watching it, getting better isn't a high priority. So let's say the people who are laser focused, the data shows that the people who start a conversation with the consumer first will win the game. Dealers know this. So what they do is they make sure that their initial lead follow-up is a phone call, maybe a text and a phone call. But that phone call goes out for most dealers. That shows up on a mobile phone because I test this all the time as a phone number. It actually has a number and a city, but that city may or may not be associated with a dealer. And it's really an unknown call. It doesn't say unknown, let me be very clear. It just has a phone number.

Over 80% of consumers, the Pew Research said, I'm not picking up a phone call. I'm not picking up a phone call I don't recognize. So in spite of dealers rigid focus on reaching out to a consumer if they don't have their dealership name, and eventually this year we'll see it more with their logo. So it's very important that dealers understand as the window collapses, as consumers are more comfortable shopping online, as more tools are online to show them what they could afford, they're waiting towards the end to make a decision. So lead is submitted. You need to let them know that this phone call is associated with the lead they just submitted. Please do not overthink this. We all get hundreds of phone calls. If somebody submits a lead and 15 minutes later your BDC calls them, do not expect that consumer to say, oh, that must be the dealer.

Because in that time, they could have gotten two or three texts or another phone call or two and they're just not picking up. So I think that dealers who need to turn their inventory faster have said, we got to get back to the basis, we got to follow up on leads. And I'm going to say, yeah, that's old school and good, but if you don't have branded call display and caller name optimization, which means keeping your outbound lines off the spam or telemarketing list, you are wasting time. And here's what my research is, the average dealer's connection rate on phone calls is less than 20%. Outbound phone calls are connecting less than 20%. So they have to make five phone calls, one six phone calls, and then someone's going to pick up. It's very discouraging, especially when the clock is ticking. So I think this data research as consumers want exchange of value, they have no problem using the phone, but they're not going to pick up the phone unless they know it's you.

So I've been working with dealers to implement the TransUnion Trusted Call solutions, and here's one story from Bowen Scarf. The marketing manager turned it on and didn't tell the BDC. The next day the BDC manager calls up Paul Ray and says, Hey, something's weird man, because I'm calling and they're saying, Hey Brian, what do you want? And they're like, how did they know that I was calling them? And he is like, ha, how we turned on? And he had the Ford Service and Ford sales, so separate tags and so they knew it was their service advisor. Wow, what a difference. Especially in service when a car is on the lift or someone's going out that day to purchase a car, that phone call timing is super important. So the data study, a related data study from TransUnion said that nine out of 10 consumers would pick up the phone, right? If they saw the name. But remember the Pew research said if they don't, over 80% won't pick up. So dealers just have to do the math in today's floor planning costs. Do you really want to chase ghosts or would you rather have your name show up so the people listen, the people who want to do business with you, pick up the phone.

Satyan Merchant/SVP Auto and Mortgage, TransUnion:

Yeah, yeah, that's right. That dealer perspective, especially Brian, with thinking about how it all relates, floor planning costs every day that goes by with that vehicle on your lot. I mean, that's an expensive day, right? More and more these days. And so again, that method of communication, I think back to the survey. This is kind of one of my favorite slides I'm looking at that analyze the data. It's back to that human interaction, the preferred method of communication with the dealership. Again, this is the consumers who purchase a vehicle, two thirds was what I would call human interaction. That's either visiting the dealership in prison or a phone call. So that's hearing a voice speaking to somebody human. On the other end, my team prepared the analysis here and I sort of crossed out the headline, which is a very informative headline. And for my own self, I wrote the AI overlords have not yet taken over in automotive retail because again, only 1%, one of consumers wanted an online chat, which likely is a bot or some sort of chat tool. Now that might change in the future. Brian, you cited earlier only 11% preferred texting. So again, over two thirds preferred that human touch, that human interaction. And back to that Pew research that you cited, Brian, the consumer wants the human, but they want the trusted human. The human they know is calling

Brian Pasch/Founder, Pasch Group:

And dealers can do that. Now, see in the past, and I think it's important to recognize that the cheese has moved early versions of caller ID that were inconsistent because all of the three major carriers didn't cooperate. Today, TransUnion's Trusted Call Solutions works on all the major carriers. And this is an important distinction because some dealers may have said, Hey, I signed up to make sure my numbers don't get spam tags. We're talking about something different. I'm talking about Brandy called display, which can start today with the dealership name or the department that's being called, and then later this year with their actual store logo. That's a huge difference. Now, someone might say, Hey Brian, if I show my name, then they won't pick up the phone and here's what I'm going to say. If they don't want to pick up the phone, move on.

Because you're sitting on leads in your CRM that are reaching out to you, the clock is ticking if people just submitted a lead. Now this is very important. If you lead gate everything on your website, expect people not to pick up your phone calls. If you don't lead Gate your website and someone submits information, they have decided that the value exchange exists, they're going to pick up the phone. So if your business practices are not consumer friendly, if they introduce friction into the online experience, don't expect a lot of people to pick up your phone call because there was no exchange of value. So where do I suggest forms? Hey, as you show a trade value, show them, Hey, we'd like to see the car and maybe even can give you more here. Give me your contact information. Or Hey, you want to know you can afford payments?

Hey, pick out the vehicle, give me some information. This is your payment range. You want to narrow it down. Let's talk to somebody. These are value exchanges. I know that's not what dealers want to hear, but if you just want to waste everyone's time, lead gate, everything. But if you want to really listen to what consumers want, as Satya said, is they want interactive experience. They want a trusted experience. They don't mind talking on the phone, they don't mind showing up, but please respect what they're doing online and don't make them jump through hoops. Listen, every time another popup comes up, it's a different company. They have to repeat their information. Like at some point the Whack-a-mole game discourages people and they move on to a more friendly site.

Andrew Goss/Host, TransUnion:

And speaking of leads that are ready to close, kind of moving from the phone channel and going more towards, I'll call more of the traditional digital channel. I think the survey found that online inquiries seem to show the most immediate intent with car buying. So let's hone in on that a

Satyan Merchant/SVP Auto and Mortgage, TransUnion:

Little bit more. Sure. I think picking up on that from the consumer lens, Andrew is consumers, again, very much preferred to do a part of that shopping and showing that intent online. What was interesting is that there's many ways to shop online in the auto retail industry. The most common use type of website was actually the dealer website. And it goes back to this notion where hey, consumers are not running away from the dealers. They value dealers, they value the dealership, especially if they believe there's a value exchange. And it's borne out in this survey where the dealership website was the most preferred followed by the listing sites such as Autotrader, CarGurus, Edmonds, et cetera. So these are all interfaces for that online to offline conversation with the dealer, with the dealership, and it is multichannel, omnichannel, online phone in person. So that's the starting point where the consumer does very strongly prefer to show intent and at least do some of that research online.

What we also found is that prequalification, as Brian was talking about earlier, is even more of that intent because when we talk about value exchange, a consumer has to proactively provide consent for that prequalification step, right? It's not something a dealer can just do. The consumer has to voluntarily say, yes, I'd like to be pre-qualified, but again, the value that they're looking for in that exchange is tell me what I can afford, what my monthly payment can be. And we're finding that consumers are very happy to do that. They actually, more than half the majority felt that a prequalification experience when done right was enhancing or beneficial to their car shopping experience. Now, the key there as we've been talking about is when done right, as Brian said, he's kind of illustrating in real life what happens here. There are multiple popups, there's multiple places where when not done right, A consumer feels like that they have to enter the same information in one place.

They go a few forms down the flow, they have to enter the same information again, they're not quite sure if the first one was an estimate or an actual prequalification, they're getting two different pieces of data. It's great because what I love about these surveys is of course the data that we can aggregate up and share these statistics, but I always dive right into the freeform commentary and really see and hear what the consumers are saying. And it's really just interesting. I can read line by line here. On the one hand, a consumer says, the process was great. The very next comment was the process was horrible or annoying, and to me that's just, it's illustrative of how much variation is in the industry right now. Some dealers get it right, some dealers have invested in their first party data knowing their consumer, a good prequalification experience.

Again, as Brian said, not removing the whack-a-mole and instead giving a nice straight through process. Others have not, and that's why we're getting these comments of the process is annoying. I wish I could have done this well ahead of time. Why did I have to do this at the dealership? Again, that's literally some of the comments that we saw in the freeform section. So online is a way to go online is very much that intent. Brian again, was talking about that time span, and I'll hand it over to Brian to share a bit more on the dealer perspective.

Brian Pasch/Founder, Pasch Group:

Yeah, one of the things, and this is more of a newer observation, new opportunity for dealers when you dig into the data study and please request a copy from the team at TransUnion. Let me just read off a couple things. This was a question about the forms process. 29% said they didn't have all the requested information readily available. Let's pause there for a second. The best way I can describe that is an abandoned shopping cart. How many of you have gone into an e-commerce site and you put some things in your shopping cart, you get distracted or like, oh, I thought I had my credit card here. Granted, we save our credit cards online or you don't, but we've left stuff in the shopping cart. Well, lo and behold, when you leave things in the shopping cart, what happens? You get an email sometimes minutes later, sometimes just did this recently, a retailer sent me a 15% coupon.

It wasn't there, but it's like, hey, you left these items in the shopping cart. Here's 15% off. Why do I bring this up? Practically, even if a consumer wants to do their pre-qual or they want to do their trait, which were two of the value exchanges, that the consumers don't have that information, so they're willing to exchange. They may not have the VIN number, they may not know the trim or engine size, and they had to do something today with the A SC specification and Google Analytics for we can know which sessions were abandoned and market to these people just like e-commerce. Okay, here's another one. Forms were too long and required me to input a lot of information. 25%, 22%. There were some technical issues about the form. 14% said they had some concerns about filling out the form because of privacy. Listen to me, this is a breakthrough when dealers, hey, forms are a part of our business.

There is a value exchange, but I don't get a lot of completed forms. Brian, oh, what am I supposed to do? I need to sell more cars. And I'm going to say, well, why don't you start tracking the abandoned forms? What you're going to find that it's 10 x 20 x 30 x, the number of leads you're getting, which means you can troubleshoot why people are dropping off. You can market to the people that didn't complete the process. And if you have an identity resolution layer like TransUnion provides, you can know when your customers listen. This is super important today to move inventory when your customers are back on your website and use a trade tool and don't finish it or use a DR tool and don't finish it or use the service scheduler and don't finish it. Guess what? You can know that and then your team can reach out.

Hey, we're just reaching out to our customers to see how everything's going with your vehicle. Oh, having to be on your website today, I think I want to trade in my car. Today's dealers need a data-driven approach. TransUnion has identity resolution tools, sales enhancement tools, and now the trusted call solutions or TCS to help the sales process to help dealers sell more cars. They just have to think in a new way. They have to change their mindset to say, hey, I need to partner with data-driven companies to give me competitive insights and new tools to sell more cars in a digital age.

Satyan Merchant/SVP Auto and Mortgage, TransUnion:

And again, I'm just going to come back and it is just so informative that I'm very happy to share what the audience here. The last question in the survey again was what could be done to make the process better? This was the freeform section. I'm reading a few of these. I just really randomly looked at some of these responses not to have to redo the same information if you've been a previous customer, right? This speaks to loyalty for a dealership. A consumer expects that dealership to know who they are, even if it's been 3, 4, 5, 6, 7 years since they last came in to purchase a vehicle. Not so much repetitive paperwork, not having to give so much information. And again, this is back to my analogy of this is a conversation that you're having over the course of your relationship to vehicles, that conversation you had with the dealer, and you shouldn't have to remember that dealer and they shouldn't have to remember you if it's been a few months or a few years since you guys last had a conversation.

Andrew Goss/Host, TransUnion:

Yeah, I mean, we've covered a lot of ground so far, and I think I still have a lot I want to ask here. And speaking of, I'll just take a brief pause in my questions. You can just remind everyone in the audience if you have any questions that pop up as we go, please put 'em in the comments and we'll address 'em in a timely fashion here. But moving away from the channel, at least my previous questions were focused on that. Right? And let's get into affordability. And we touched on this already, so it might be a little bit of repetitive, but how can dealers help consumers better understand earlier and easier during the car buying process, what exactly they can afford?

Satyan Merchant/SVP Auto and Mortgage, TransUnion:

Yeah, I'll take a stab at this one from the survey, and really from what we found in the industry that prequalification we've talked about a little bit earlier, that's really the way to enable the consumer to understand what they can afford early into the process. It's something where consumers in our survey cited that if they applied for a prequalification and over half did or over half completed an online form, they experienced a very positive impact. And most of them was that what that experience was for a prequalification, right? Over 60% use those online forms for a prequalification. Again, they were mostly happy with the prequalification. So the prequalification, I think number one, it's important to call out. It's a soft pull or a soft inquiry. It's something that a consumer consents to, but it doesn't show up as a hard inquiry on their credit report.

That does though provide enough information to the dealer and the arranger of financing to take a look and provide some feedback back to the consumer on what they can afford, what monthly payment that they'd be able to afford. And that's part of building the trust early in the process for the consumer, because again, the consumer has said in the survey they want to interact with the dealership, but what they don't want to do is they don't want to come into the dealership and spend two to three hours figuring out can they even afford that vehicle that they fell in love with in the showroom. They also don't want to come in and again, fill out forms that they already filled out online. They want to do all of that stuff at home in their pajamas on their couch. Then they want to come in and they want to value great game. The value of the dealership in terms of really what the sales associates and the sales experts should be doing there, which is tell me about the vehicle, show me the features, et cetera, et cetera. I mean, we saw very specifically that's why they want to come into the dealership to really get the vehicle expert speaking with them, not trying to figure out what they can afford. That's something they can do upfront in the process and they like to do that.

Brian Pasch/Founder, Pasch Group:

Yeah. Let me add a couple of things that dealers can do when it comes to affordability. Satya, you mentioned soft pole credit, and I think a lot of the website tools and DR tools are starting to leverage that. More and more importantly, it's just not the soft pole, but using that information to allow the consumer to shop by payment. And this is another piece to the puzzle. Not all dealership websites allow the consumer to search for vehicles in a payment range. And so dealers should be looking at digital retailing tools that once an exchange of value has been presented once a pre-qual has been run, then running it up against the banks that the dealers are using to give some range of payments and the vehicles that could be available based on the down payment. So that's number one. Number two about affordability is dealers have to realize they have to reeducate consumers.

During the pandemic, there was sticker shock. Sometimes we forget that consumers really don't think about car prices until they need a new one. Now, let's just say it's 2024. Three years ago, they were looking for a truck. Well, three years ago when they were looking for a truck, they were paying 5, 7, 10 over MSRP. Today if you want Ford F-150, a RAM 1500, I mean they're stacked high and deep with thousands of dollars of discounts and rebates. So when we come to affordability, you can't assume, oh, consumers know that prices are down and rebates. No, no, don't assume that. So dealers who have a real crisp brand promise, a branding message should be educating consumers. I mean, even things like rebates on EVs and EV prices have dropped significantly, right? So reeducate the consumer on what's available, reeducate the consumer that rebates and incentives are back, load up what they can expect to get from their trade and give them some choices.

And all of this is possible with today's technology, with new retailing tools. We just have to think differently. And let me just tell you recently I interviewed a sales person at the Walzer Automotive Group in Minnesota who sells about 75 cars a month himself. And I asked him, how in the world do you do it? Do you have a whole team? He's like, no. He says, what I do, well, of course people refer to me. I do a lot of business, but I send them a link. They fill out their credit application, I send them a link, they do their trach. He says, Brian, I want them in and out in 15 minutes, 20 minutes, 30 minutes, and if they need more, that's fine. I said, you mean he says, yeah, for cash deals are pretty much in and out in 10 minutes. And I asked him how he's doing.

He says, I'm using technology to let the consumers to do as much as they want from home. I've built a trust. This is the key. Satya was saying, he's built trust over the phone. He's built transparency. They also happen to be a one price store. So the negotiation process is simplified, but he's pushing the credit app, he's pushing the trade. So when they get there, he is like, my goal is to minimize the paperwork. And I think what we're learning is that even though during C there was this rush, 50% of car sales are going to be done online, which is far from that, consumers still want to see the car they want to touch, but they surely don't, as you mentioned, don't want to spend really more than an hour in the dealership. So why make them, if you want to move more inventory, your brand promise should of course have competitive pricing, but more importantly, talk about the experience. Because at the end of the day, people are willing to pay more for experience and surely deal with people who avoid bad experiences. And in today's difficult economic climate, especially with dealers that are sitting with a lot of inventory, they have to rethink their sales process. They need to rethink their brand promise, and they really need to rethink their customer experience to reenergize sales and to lower their floor plan costs.

Satyan Merchant/SVP Auto and Mortgage, TransUnion:

Brian, it's a great point that I wanted to add onto here around rethinking the sales process and really reeducating the consumer who during the pandemic three, four years ago might've been the last time they were in the market for a vehicle. And it was a very different experience with different inventory and different models and different buying processes. One area that I believe in speaking with dealers as well as manufacturers, actors, really kind of needs a dusting off on is the lease value proposition for consumers. And it's something in our data and TransUnion data, we've seen that leases prior to the pandemic constituted about a third of new vehicle sales in the United States. And during the pandemic, particularly when inventory was down dramatically for new vehicles, it dropped all the way to 17%. And so what that meant is lease sort of fell off. There were many reasons why inventory dealer profit, whatever it might've been today, it's climbing back up where our most recent report at the end of last year, we saw around 22, 20 3% and it's growing.

And so that does tie Andrew to this question about affordability because we're now in a place where new vehicle prices, while they're off of their peaks, they're still elevated and lease programs are back. Lease programs do often contain quite a bit of rebate or incentive from the manufacturer. And all of a sudden you have a consumer that is in the market, maybe for a new vehicle and a deal, maybe the better deal from a monthly payment perspective is a lease. And so the dealership, the sales associate at the dealership, the BDC really has to kind of get back to providing that value proposition. Because again, what we found in a different survey about a year or so ago is that there's generational differences in car buying as well. And there's a generation of consumers that maybe entering the market for the first time where a lease is a possibility.

So they're just not educated about that lease, and they may actually have some old notions or tendencies about whether a lease is something that's valuable or not for them. Brian mentioned the EVs, this at least today currently stands that some consumers may not be eligible for the federal tax incentive when they buy an EV today, but they are eligible when they lease and they may not know that. And that could be a hundred dollars a month difference in a monthly payment simply being eligible via a lease. So there's again, lots of areas where a trusted dealership can really add value, participate in that value exchange for a consumer. The key again is it's not asking the consumer for the same information over again or giving them the whack-a-mole experience that you would rather have at Chuck E. Cheese, not at a dealership. Right?

Brian Pasch/Founder, Pasch Group:

Amen to that.

Andrew Goss/Host, TransUnion:

Yeah, I wouldn't want to have a whack-a-mole experience at Chuck E. Cheese either, but they're here nor there. So Brian touched on this a little bit earlier, but vehicles staying on the road longer, new vehicles being purchased less often, and auto data about consumers is commonly right, it's outdated, it's limited or inaccurate. How can auto dealers aiming to meet consumers again in the right place at the right time, stay up to date on this type of data?

Satyan Merchant/SVP Auto and Mortgage, TransUnion:

Yeah, I think, Brian, you can start with this one from the dealer perspective, but I do want to call out a comment from Doug Reeves that's relevant here, right? Brian is right. Dealers need to reassess their dealership experience, both for the employees and the customers. People will pay more for a better experience. That's really what you're talking about here, Andrew, is how can a dealer create that experience for a consumer which they're willing to pay for?

Brian Pasch/Founder, Pasch Group:

Yeah. In regards to Andrew's thought about the rich data that TransUnion has about individuals, shopping behaviors, shopping signals that you may get change in life status and other things that are really part of and parcel of what institute's decision to trade or buy new car. I want to mention that more of the larger dealer groups are moving into an error where they're using a third piece of software. So for years it was DMS and then CRM today. The third piece of software is the CDP. And TransUnion has been a really important partner with some of the larger dealer groups I'm working with to enhance the customer record with the latest email, the best phone number, the best address. One of the things that dealers need to realize is that your DMS is a cesspool of data. It's dirty, it's outdated. I would say most dealers who have been in business for a while, 40% of the people who you think in the DMS own a car don't.

They don't own that car anymore, yet you keep on dumping out your DMS and CRM data. Less than 4% of the people in your DMS are shopping for a car. Less than 20% of the people who are in some equity equations are really shopping for a car. And so if dealers are looking to change the outcomes of their inventory turn rate, they have to be thinking in new ways, which means they need to be treating their customers in a different way. They need to know more about their customers, they need to know the best way to contact them, where they're living, which vehicles they currently own, what's their preferred method of communication. And what's so interesting is that for many years, the DMS was just a, what we call a data at rest transactional data, yet today's consumers Satya and as you said, expect a personalized experience.

So how could you brand your dealership as we love our customers, when you keep on sending them service notices for cars, they no longer own, they laugh at you and like this dealership has no clue. They don't value me because they keep on wasting my time with these stupid notices. And I just want to say that dealers who are watching today should understand that the future of automotive retail is being led by the larger dealer groups, but success leaves a trail. And today smaller dealers, smaller dealer groups can access customer data platforms powered by real-time data from TransUnion, enhancing their phone calls with trusted call solutions, improving targeting through data enhancements. All these things are possible. The real question is, are you willing to change your frame of thinking to really deliver the customer experience that you want to exceed the expectation of the consumer?

So it just stands out. And you can't do that if you're running your business out of the DMS or the crm. It just doesn't, using the wrong tools for the wrong objectives. So TransUnion really needs to be seen not as the credit bureau. I use them for soft polls and hard polls. Yeah, you can do that, but we really need to, as we move to a data-centric customer-centric mindset, dealers are going to have to choose who they trust for the best customer contact data because otherwise they're chasing ghosts, they're wasting money and they're falsely inflating their sales potential. I think dealers need to get a real handle on how many customers are really in their PMA and available to do business with them.

Satyan Merchant/SVP Auto and Mortgage, TransUnion:

Yeah, I think Brian, thanks for calling that out because at TransUnion we do, at the end of the day, we're a consumer data company, and it started at the roots of the Bureau, but it's well beyond that. And to emphasize that point, there are some of our, I think highest performing assets that dealers have used are this comment you had of the inflated sales potential. Some of it is, it's actually reducing and better identifying consumers and market. So for instance, LTV really understanding the LTV position of a consumer. And so that's kind of outside of the equity mining. You layer on top, hey, well, are they in a positive LTV or not? So you actually might suppress certain types of outreach based on the LTB position, right? There's other sort of audiences that can help get to the message, because I think the dealers often have the right message is getting that right message to the right consumer.

One of the worst things a dealer can do is work on building the right message and sharing you with the wrong consumer. That of course can start at the message. It can translate to do you have the right information, the most up-to-date information on the consumer? And then lastly, is just kind of coming full circle back to the phone conversation and the branded call conversation. Are you touching the consumer at a time and in a way where they want to speak or answer the phone? There's many parts of getting the message to the consumer and really thinking through the entire process and using the right tools will I think get the dealer to the consumer what the right message if they execute correctly. And that's where the comment in the chat and then the one that you made earlier, Brian, if you can do that, right?

The consumer is delighted, right? The consumer is willing to pay when they see that you're targeting 'em in the right way, you're bringing the right offer to them, you're telling them what they can afford. And again, I think back to the question, Andrew vehicles are staying on the road longer, but the transaction prices and the vehicle values are going higher and higher. And so this is in a way for some consumers becoming a less frequent but larger ticket purchase over the course of their lifestyle, their lifetime, but still a purchase that's critically important to them. So the incremental investment to make sure you get the message right, to find the consumer the way they want to be spoken to can really help pay off when the consumer is in market for that even bigger purchase than it might've been five years ago, 10 years ago, 15 years ago.

Brian Pasch/Founder, Pasch Group:

Satna Andrew, I just thought of something that dealers resonated with in regards to their outbound calls. And when I tell this story, they're like, yeah, I've done that before. And have you ever expected a phone call? And then you get distracted and then you think it was like, man, that dude's a jerk. Never called me back or man that doctor. Well, it happened to me. I got my blood work, I get it done every year. And the doctor said, we're going to call you tomorrow with your blood results. And so a couple of days go by and my wife says, Hey, did the doctor ever call? And I'm like, no, what a jerk. They promised me, well, I didn't have time to call the doctor. I'm looking through my voicemail, and I was just this number, it's Boca Raton, let me see it. It's like, hi Brian, this is Dr, blah, blah, blah.

And I didn't pick it up because I didn't recognize the number. How many consumers fill out a lead form on the dealer's website, they're interested in buying a car. I'm like, man, that dealership really doesn't want my business. It's a perception. That's because they didn't connect that. I'm not answering that Cole. But they don't go back and listen, how many of us on this webinar will say, I do not listen to all the messages of the calls I don't recognize. And so if dealers want to really transform their customer experience, they need to look at their website, they need to look at their lead handling process, but they also have to fix their outbound calls. And I just want to encourage the dealers who want to learn more about the trusted call solution, just Google Trusted Call Solutions. You'll see I've written a couple articles on this.

I've shared dealer case studies, just type in trusted call solutions. Here's the reason why TransUnion is aligned with your number one goal right now is to increase the turn rate your inventory, better data, better customer contact information, better sales process is going to help you find the partners that help you achieve your goal. And that's why today's webinar is so important because not only were they pulling consumers to get their sentiment to share with you, but it's also because they have some solutions to fill the gaps that consumers are saying are in your sales process.

Andrew Goss/Host, TransUnion:

So all great points. Brian and Sian, and I don't want to get too here, but I have one last question I wanted to get to, and it's not the aha thing that sometimes reporters ask at the end of the interviews. All of these findings you provided today there, there's a plethora. Are there a couple key points? It can just be succinct, right? The dealers and car brands should consider prioritizing and walking away with today. And before you answer that, just one last plug, this is kind of the last chance that there are any audience questions. Please feel free to ask. So

Satyan Merchant/SVP Auto and Mortgage, TransUnion:

That's right. So yeah, let me start, and I'll try to be succinct here because as Brian knows, I could go all day with him about this topic. We're very passionate about it. I'd say there's three things here. So number one, think about the whole end-to-end process flow. Again, I've been using the term, it's a conversation. It's a conversation that typically will start online but will end with the consumer taking the keys and driving off happy. And there's a lot of different parts of that conversation along the way. So think about how it all stitches together from a lead all the way to a sale. Number two, it's a personal emotional transaction. And so that process, try to steal from the best of it, the best world, which might be again, Amazon or Netflix or name your website, but remember, this is a personal human touch.

Speak to somebody on the phone, know who's on the other end of the line. Look somebody eye, face to face. Consumers absolutely want that. And I continue to believe as vehicle prices become keep going up, they're just going to want that personal touch even more. And then lastly, at the end of the day, knowing your consumer, it's the identity. It's the first party data that, again, Brian said this, well, there's a lot of good information, a lot of great data that a dealership has. They may just not be unlocking it or using the right tools, but the data is there and it's going to be become more important as the cookie go away. So really get that first party data strategy in order. So you can do those first two things I said, which is have the conversation and meet the consumer for this emotional purchase that they're going to make.

Brian Pasch/Founder, Pasch Group:

Here's my summary. Data shows that 40% of consumers won't fill out a form. Dealers should know that the best well-run websites, maximum 3% of visitor traffic convert to a form only 3%. Yet dealers with identity resolution tools for TransUnion could probably identify 30 to 40% of the people who are on your website, which means when they start a trade or a DR or a soft pull or a hard pull, you can know who they are. So when you're fighting over, I want more leads and you're capped at 3%, you're missing the bigger lake. You're fishing in the small pond, you should be fishing in the bigger pond. That's identity number two. Dealers want to communicate with consumers. It's clear that your forms and website design are creating friction. It is a decision you have to make, whether you gate or not, just understand that you're screwing with the 3% and be careful on what you get.

When you put barriers and blockades from all information, it sets a tone. And number three, the people who have the best sales process are still struggling in today's economy to get their lead closing rates up to historical highs. And when you look at what dealers do is they use the phone as the primary outbound reach to start that conversation. As satin said, imagine the lift when you don't lead gate. People have an exchange of value. They want to talk with you, and then your phone call says the name of your dealership. What happens? That means greater trust, greater confidence, greater connection rates, faster conversations. The people who have the conversation with the shopper first is the one who makes the appointment first, which increases showroom appointments. Then the rest is up to you. So the data's clear. There are opportunities and barriers. You just have to decide which path you want to go down.

Andrew Goss/Host, TransUnion:

Well, we touched on a lot of points today and hopefully the audience got a lot out of this. So I appreciate it, Brian and Sian for these great insights. And before I close out, Brian and Sian, are there anything else you wanted to get to? Okay,

Brian Pasch/Founder, Pasch Group:

I think we wrapped it up.

Satyan Merchant/SVP Auto and Mortgage, TransUnion:

Just want to thank the audience and you as well, Andrew and Brian for joining me here. And I hope the audience found this valuable. Feel free to contact any of the three of us with any follow ups.

Andrew Goss/Host, TransUnion:

Yeah, well, I appreciate it, and Brian, great to have you as a guest here as well. But again, special thanks to the audience, and if we didn't get your question and it's applicable to the conversation, we'll do our best to circle back around with you as soon as possible to download the findings from our recent auto study we talked about today, go to transunion.com/auto survey, and you can also find that web address by going to the description tab on this LinkedIn live event page. And we will see you next time on TransUnion Live.