How Digital Payment Experiences Drive Action

Discover how automotive businesses can drive sales and loyalty—and overcome market challenges such as the current automotive shortage—by meeting consumers’ accelerating preference for digital experiences.

How Digital Payment Experiences Drive Action

In Onbe’s 2021 Automotive Survey, we set out to map consumer expectations for the car-buying experience and learn how automotive businesses can meet changing preferences, deliver incentive offers that drive action, and build lasting customer relationships.

Read this article to learn:

  • How to engage young millennials—68% will get a car in the next 18 months
  • How to win sales with incentives—as little as $25 is proven to spark action
  • The power of digital promotions to drive spend-back at the dealership
  • The secret to staying agile in the rapidly digitizing automotive landscape

Content Summary

INTRODUCTION
METHODOLOGY
COVID-19 ACCELERATED THE PREFERENCE FOR DIGITAL
IN A DEMOGRAPHIC SHIFT, MILLENNIALS RACE TO BUY CARS
WITH LESS SELECTION, CONSUMERS ARE MORE FLEXIBLE
INCENTIVES HIGHLY INFLUENCE CONSUMER CHOICE
UNLOCKING OPPORTUNITIES FOR DEALERSHIPS
OPTIMIZING THE WHOLE CUSTOMER JOURNEY

INTRODUCTION

Automotive companies have had a wild ride this year. With the COVID-19 pandemic leading to a global automotive shortage and accelerating consumers’ shifting preferences for how to research and buy their next vehicle, manufacturers and dealerships are pressured to adapt quickly as they weather fast-changing market conditions. With these challenges come opportunities to transform how automotive businesses connect and engage with customers and fulfill the growing demand for digital experiences.

In Onbe’s 2021 Automotive Survey, we set out to map consumer expectations for the car-buying experience and learn how automotive businesses can meet their customers where and how they choose to shop for their next vehicle: increasingly through digital channels. These preferences extend to the payment experience—such as when customers are offered an incentive or loyalty reward, or when they are owed a refund from a dealership or automotive brand. By delivering on expectations for seamless digital payment experiences, automotive companies can get back in the driver’s seat to navigate today’s industry challenges, build lasting relationships with the next generation of car owners, and stay agile in the rapidly digitizing automotive landscape.

METHODOLOGY

In August 2021, Onbe conducted an online survey of a random sample of 1,059 U.S. adults aged 18-99 years. The survey results had a 3% margin of error.

COVID-19 ACCELERATED THE PREFERENCE FOR DIGITAL

The pandemic accelerated a digital shift across all retail segments, and the automotive industry is no exception. The majority of Americans across generations say that along with kicking tires at a local dealership, they’ll go online to research and buy their next vehicle.

Of Consumers Who Anticipate Getting a New Vehicle in the Next 18 Months:

  • 86% will comparison-shop among multiple dealerships and/or websites
  • 83% will research the purchase online
  • 72% will shop online
  • 16% will shop exclusively online

Act now: As more consumers turn to car-buying websites, automotive brands must provide fast, seamless digital shopping, purchasing, incentive, and refund experiences.

IN A DEMOGRAPHIC SHIFT, MILLENNIALS RACE TO BUY CARS

In 2020, millennials bought 32% of new cars, surpassing baby boomers for the first time. Our 2021 study found that 68% of under-30 consumers plan to purchase or lease a vehicle in the next 18 months, proof that younger millennials are rapidly gaining buying power.

Consumers Who Anticipate Buying or Leasing a New Vehicle in the Next 18 Months, by Age:

  • Aged under 30: 68%
  • Aged 30-44: 62%
  • Aged 45-60: 53%
  • Aged 60+: 40%

Act now: Dealerships should focus on marketing to millennials. That means offering digital incentives, loyalty rewards, and refunds that align with this generation’s preference for personalized online and mobile experiences, immediate gratification, and flexible spending.

WITH LESS SELECTION, CONSUMERS ARE MORE FLEXIBLE

Far from being deterred by the current automotive shortage, consumers are willing to be more flexible about the make and model of their next vehicle. In fact, only 10% of respondents said vehicle selection was a top factor when shopping for a car.

Consumers Who Would Consider Purchasing a Different Make or Model if the One They Want is Unavailable:

  • 87% of those planning to buy a used auto
  • 88% of buyers under 30
  • 80% of those planning to buy a new auto

Act now: Incentives are a proven way to reward brand loyalty, but with the right incentive offers, manufacturers and dealerships also have the power to shift consumer spending away from their preferred brands, win new customers, and drive sales even when selection is low.

WITH LESS SELECTION, CONSUMERS ARE MORE FLEXIBLE

INCENTIVES HIGHLY INFLUENCE CONSUMER CHOICE

71% of consumers will choose where to shop for their next vehicle based on price and incentives above all other factors (including safety, fuel efficiency, style, size, and technology features). In addition, many consumers said they’d spend back incentives with the auto brand that provided the reward, offering an opportunity to recoup the investment.

Consumer Incentive Preferences by Generation

  • Aged under 30: 54%
  • Aged 30-44: 48%
  • Aged 45-60: 39%
  • Aged 60+: 22%

would choose a $25 test-drive incentive (digital prepaid card, gift card code, or fuel card) over a much larger reward ($750-$1,000) that required a vehicle purchase

  • Aged under 30: 47%
  • Aged 30-44: 44%
  • Aged 45-60: 28%
  • Aged 60+: 21%

would prefer to receive a $700 prepaid card at time of signing than a lower monthly payment

62% of consumers prefer a prepaid card to other dealer service incentives, such as discounts and retail gift cards

Act now: Automotive companies should double down on incentives to influence purchases and grow loyalty, especially among younger millennials. The investment doesn’t have to be large to have an impact, since consumers are eager to engage with brands for incentives as modest as $25.

UNLOCKING OPPORTUNITIES FOR DEALERSHIPS

While less than 30% of consumers choose to service their vehicles exclusively at the dealership, incentives have the power to change that. The majority of consumers said dealership service incentives would motivate them to return to the dealer for automotive maintenance, presenting an opportunity for dealerships to build customer loyalty, spark sales beyond the primary purchase, and encourage referrals.

Customers Who Would Opt to Service Their Auto at the Dealership for an Incentive:**

  • 75% of all consumers
  • 86% of buyers under 30

** Either 10% off service for the first year or a $15 prepaid card for each scheduled maintenance service

Driving Spend-Back at the Dealership
50% of consumers would spend back a $100 auto purchase incentive on vehicle maintenance or accessories

Act now: Drive loyalty and revenue by implementing a dealership service incentive program that brings customers back again and again. For example, by offering a 10% discount on synthetic oil changes, dealers could gain an additional $126 in revenue per customer, each year.

OPTIMIZING THE WHOLE CUSTOMER JOURNEY

Beyond the primary purchase, customers expect to have a smooth experience when they trade-in, trade up, shift from leasing to ownership, or celebrate finally paying off that car loan. During many of these interactions, the customer is owed a balance—such as for overpayment on a loan or lease. Providing a digital refund can help brands deliver a positive experience that cements customer loyalty and smooths the next step in the journey, whether that’s a new automotive purchase or ongoing visits to the dealership for routine maintenance.

71% of consumers prefer a digital payment method over a paper check

DID YOU KNOW?
issuing a check costs between $3 and $12. By making the switch to digital, automotive lenders can completely eliminate these costs.

Act now: Switching from checks to digital refunds reduces cost, risk, and administrative labor for automotive businesses—and delivers a smoother experience for customers at every leg of the journey.

SOME ADVICE FOR THE ROAD

In an ever-changing automotive landscape, digital experiences drive action—whether it’s sliding behind the wheel for a test drive, investing in a new vehicle, or returning regularly for scheduled maintenance. Even with vehicle selection currently limited and consumers increasingly going online to source their next car, automotive companies have the opportunity to bring customers back to the dealership and win their loyalty by implementing a digital disbursement strategy that delivers immediate gratification, choice of payment modality, targeted promotions to drive spend-back, and most importantly, a seamless digital experience.