Not that long ago, many dealers may have scoffed at the idea of automating any aspect of the automotive buyer journey. However, rapid digitalization due to the pandemic and increasingly tight margins amid inventory shortages are prompting proactive dealerships to look for new ways to improve the efficiency and efficacy of their sales and marketing efforts.
According to IHS Markit, digitizing the customer journey provides dealers the opportunity to reduce staffing by up to 50% with an immediate impact on dealership net results. In a 2020 study, IHS Markit found consumers who bought at the dealership interacted with 3.8 dealership personnel on average to complete the transaction. When a customer bought partially online, the staffing ratio dropped to 3.0 and only 2.1 for fully online buyers.
In addition to supporting sales, dealership marketing automation tools powered by predictive analytics are enabling proactive dealers to overcome inventory challenges by making more informed decisions related to acquisitions, merchandising, pricing and more to achieve sustainable success despite shortages.
In this blog post, we share three ways for dealers to use marketing automation to overcome inventory challenges, including how to:
Even amid inventory shortages, a dealership’s greatest asset isn’t the quantity or quality of vehicles on your lot – it’s the data locked away in their Customer Relationship Management (CRM), Dealer Management System (DMS), service drive and other dealership systems.
As ongoing new vehicle production delays and rising consumer demand for pre-owned vehicles sends already high wholesale used vehicle prices even higher, many dealers need to get strategic to profitably acquire pre-owned inventory.
By leveraging dealership marketing tools that integrate with their CRM, DMS and service data, dealers are empowered to automatically identify acquisition opportunities from untapped sources in their market.
For example, Mastermind automatically identifies which customers in a dealership’s loyalty portfolio, service or market conquest audience, are most likely to sell their current vehicle or another vehicle in their household. From there, prospective customers are automatically targeted and engaged with predictive marketing campaigns and tailored messaging compelling them to trade-in or sell back their vehicle.
As fleets grow older and pre-owned values rise alongside repair costs, many dealers are taking a similar approach to mining their upcoming service appointments for acquisition opportunities. Using these tools, dealers can automate the process of identifying and engaging potential trade and buy-back opportunities, like those with a higher-than-ideal interest rate on in-demand vehicles.
According to IHS Markit, automotive brand loyalty among consumers in the U.S. dropped to a six-year low for new vehicles in June of this year following a steady decline in April and May. At the same time, body style loyalty actually increased by 1.1% year-over-year.
What does this mean for dealers? Customer loyalty is no longer a given – and if a customer wants a particular make, model or body style, they’re willing to switch dealerships or brands to get it.
As diminished loyalty and depleted inventory levels put the pressure on dealers to protect their customer base from competitor’s conquest efforts, leveraging automated dealership marketing technology has become key to maintaining a competitive edge.
Using tools like their CRM and DMS, dealerships are empowered to maximize their main advantage over the competition – their customer data, automatically identifying which customers are showing signals of preparing to return to market, such as those approaching the end of their warranty or lease. By proactively reaching out to owners reaching their end of lease, the dealership will be able to have more control over customer retention regardless of loyalty to the dealership by having conversations early about upcoming obstacles and inventory needs.
Combining these insights with high-quality, third-party data like financial records and household demographic information further empowers dealers to automatically and proactively retain buyers by incentivizing customer loyalty with personalized messaging, including tailored offers, service specials or referral programs.
Regardless of their current inventory level, it’s critical all dealers do not stop marketing amid inventory challenges. Whether dealers are trying to maintain loyalty, drive service revenue, acquire pre-owned vehicles or proactively market pre-orders, staying in communication with customers is key.
But simply communicating with your customers and sharing relevant offers is only one half of the equation. In a recent industry study, 91% of consumers said “trust” was important to them when deciding which dealership to purchase from. Dealers need to build trust with buyers through personalized, transparent messaging.
Look for ways to integrate your dealership’s website with data from your sales and inventory platforms to automatically offer consistent and up-to-date messaging online and in-store related to your dealership’s available inventory, pricing, process and procedures.
To stand out from competitors’ spray-and-pray offers, automated dealership marketing tools enable dealers to cut through the clutter with brand-focused messaging tailored to each customer.
For example, when marketing pre-order options, transparent and automated marketing campaigns empower dealers to offer buyers a continued sense of security when purchasing sight unseen. Automation helps further ensure every customer communication is consistent, building upon any previous touch points to include personalized offers and relevant financing details.