As the current decade nears completion, auto dealers are faced with flattening new-vehicle sales forecasts populated by upcoming generations of consumers who increasingly resist traditional dealership marketing and sales methods.
It’s not just how today’s consumers are buying vehicles, either. What they want to buy has changed, driving massive shifts in manufacturers’ product plans away from sedans and coupes and toward SUVs and trucks. New data suggests their automotive brand loyalty might not end up being as strong as many manufacturers had expected. And on the back end, consumers are changing how they finance car purchases, with the average car loan length currently lasting 69 months and growing.
These are challenging times for auto dealers. And as IHS Markit loyalty principal and industry analyst Tom Libby recently wrote in Automotive News, one of the most powerful tools in a car dealer’s sales repertoire, customer loyalty, seems to be reaching the end of its effectiveness growth curve.
“Before this year, brands could count on increases in deliveries to returning loyal customers to help meet annual sales goals, but that is no longer the case,” Libby wrote. “In today’s market, brands will have no choice but to conquest owners from the competition to achieve year-over-year gains.”
Even though we’ve been one of the auto industry’s strongest voices for loyalty and customer experience, we agree. However, we contend it’s not enough just to conquest customers from the competition. Rather, in the face of these broad market forces, car dealers need to evolve their view of their marketplace and potential customer base to take a far broader and more holistic approach rather than simply reallocating resources from loyalty to conquest (or investing more in both).
This doesn’t mean customer loyalty isn’t important. In fact, back in 2012 when we set out to transform the automotive retail experience, we started with solving dealers’ challenges around customer retention. We knew as former car salesmen this was the most efficient and effective way to make a quick difference in dealers’ bottom lines. But we have always been working toward a truly comprehensive and holistic sales platform solution, one that integrates loyalty and conquest, but goes further to knock down the walls between them – and service, the traditional third leg – to give dealers a complete view of their local market, allowing them to sell as effectively and efficiently as possible.
With that goal in mind, we recently launched Market EyeQ, the first-ever automotive sales platform that gives dealers what they need to compete and succeed in today’s market. It combines the best practices and insights of real-world dealer experience with the power of predictive data modeling to solve dealers’ challenges and helps identify, communicate with and close more customers, every single month. It does so in part by knocking down the artificial walls between traditionally-segmented retention, service and conquest sales channels. In the modern digital era, where meaningful data exists on all potential car-buying customers in a marketplace, there’s no longer a good reason for dealers to artificially structure their sales processes along those traditional lines. How a customer first connected to a dealership should be a data point, not a defining characteristic for the relationship. It’s no longer good enough in today’s marketplace to focus just on one type of customer, or just one datapoint.
One component of effective loyalty marketing that Libby identified is “the ability to segment households based on their historical behavior and create marketing strategies tailored to each household segment. Automakers and dealers may be tempted to cater to their long-term owners more than others, but historical loyalty data indicate this may not make the most sense.”
That’s certainly true, but it also doesn’t go far enough. For one thing, there’s no reason to limit such analytics-based marketing solely to retention. And more importantly, there’s no reason to limit the depth of your analysis and targeting to aggregate household segments. Rather, each individual potential customer in your marketplace can and should effectively be a “segment” of their own, based not just on what you know about people like them in the aggregate but rather on what you know about that specific consumer’s buying behavior based on high-quality data from multiple trustworthy sources.
This is why Market EyeQ gives dealers the power to expand their marketing and sales efforts from the traditional “retention, service, conquest” model to the ultimate “everybody in the market who wants to buy a car” audience. That’s been our intent since before we launched, and we’re excited to be delivering on it during a time when it’s so clearly needed in the industry.
Among other innovations, Market EyeQ accomplishes its audacious goal of expanding dealers’ potential reach to the entire car market by bringing in real-time, proprietary data and analytics from parent company IHS Markit; by leveraging household demographic data and vehicle history from the Carfax Snapshot tool and from a new partnership with credit reporting agency TransUnion. While there are other predictive analytics tools out there, they’re only as good as the data they have to work with and there’s nothing else in the marketplace that comes close to identifying and understanding your potential customers using this combination of gold-standard consumer information.
As generations shift, products change, consumers evolve, loyalty plateaus and car sales flattens, dealers must evolve to compete and succeed. While retention, service and conquest customers are still critical, dealers can no longer afford to limit themselves to those artificial distinctions or to market to segments instead of individual consumers.
It’s time for dealers to take the next step and empower themselves to sell effectively to every single car buyer in their marketplace, which is why it was time for us to bring Market EyeQ to life.
Do you want to evolve the way you view your audience and close more deals every month? Contact us to set up a demo today.