Two people embracing each other in front of their new car and a salesman

There’s how customers purchase a car. And then there’s how customers want to purchase a car. Allianz research shows we need to rethink some of our assumptions about our customers.

Here at Allianz, we’re always looking at how customer insights can help us provide a better service to our customers whilst also delivering greater profitability. We recently identified an opportunity to learn more about how the purchase of motor insurance intersects with the car-buying journey.

The results we arrived at have challenged our thinking about customers’ mindsets at touchpoints during their purchase journey. And they have led us to think seriously about turning customer frustrations into positive experiences.

The car-buying journey

Our study into customers’ car-buying journeys broke up the purchase process into five sections, beginning with the Research and Choosing Vehicle phases, through to the Negotiation and Finance phase, the Vehicle Delivery phase and, finally, the Ownership phase.

We found that most customers use Original Equipment Manufacturer resources, specifically those online, to conduct their initial research. Then, as they narrowed down their consideration set, we discovered that they began feeling overwhelmed by the variety of choices available. This, in turn, resulted in frustration when negotiating a vehicle price and in discussions relating to finance and insurance.

Customers nominated wide-ranging grievances at this stage – ranging from disappointment in the trade-in price offered to them and annoying sales tactics through to overly expensive vehicle add-ons, having no single point –of contact and feeling like many of the conversations they were having were box-ticking exercises.

In contrast, customers expressed feeling overwhelmingly happy at the point of receiving their vehicle, with almost half saying they were made to feel special.

Opportunities to improve the customer experience

What can we deduce from the frustrations customers feel at the mid-point of their purchasing journey and what options do we have to turn these frustrations into opportunities?

Explain the value of insurance

Insurance is not always front of mind for a customer purchasing their vehicle, so it may be difficult to convince customers to spend more money for a product they hope never to use. At the same time, many default to price as a way of comparing policies because they find it hard to differentiate one policy from another. Many customers can’t easily name the benefits of a superior insurance product.

However, a competitive price and a clearly superior product make for a winning combination. Helping customers understand the features and benefits of a policy is important – but it needn’t just be about policy features. Many customers see tremendous value in being part of the OEM brand, so discussing the value of belonging to an OEM ecosystem can have an impact.

Reduce missed ‘insurance conversation’ opportunities

We found that many customers didn’t have a conversation with a business manager about insurance. And when the conversation did happen, customers found the experience to range from being very good to a ‘box-ticking exercise’. Clearly, conversations about insurance need to happen more often and earlier in the customer journey.

Customers who look for added benefits also tend to be those who are receptive to hearing about insurance early on.

Leverage downtime

Customers report wanting to discuss insurance earlier in their car-buying journey. There are two main reasons for this. Firstly, the practical reason that customers don’t want to be assailed with too much information in one hit. The second is a more emotional response. With many customers stating they feel frustrated and overwhelmed at the Negotiation and Finance phase, it stands to reason they’re not in the right headspace to be having complex insurance-related conversations at that time.

There’s an opportunity for dealerships to build awareness of insurance earlier in the process. This can be done by having an informal conversation about insurance, having point-of-sale materials easily visible and providing information about it on the dealership website.

Make insurance information easily accessible

Many customers expect that insurance resources are only available online and aren’t accustomed to interacting with dealerships when making an insurance choice. Building awareness of insurance products and who to talk to in the dealership is crucial to help customers find the information they need to decide.

We’ve found that customers have a mix of buying preferences and there’s certainly no ‘one-size-fits-all’ solution.

The optimal path is to make information available and offer the opportunity for customers to find out more at their own pace.

Source:Allianz/InMoment Car-buying Customer Journey report 2021

This article has been prepared by Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL234708 (“Allianz”). In some cases, information has been provided to us by third parties and while that information is believed to be accurate and reliable, its accuracy is not guaranteed in any way. Any opinions expressed constitute our views at the time of issue and are subject to change. Neither Allianz, nor its employees or directors give any warranty of accuracy or accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in this article.

Allianz acknowledges Aboriginal and Torres Strait Islander peoples as the Traditional Custodians of the lands on which we live and work across Australia. We pay our respect to First Nations Elders past, present and emerging.