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Why Dealers Need to Focus on Customer Experience Amid Inventory Shortages

While vehicle prices remain high, ongoing inventory shortages are having costly effects on OEM and dealer loyalty rates. In June 2022, brand loyalty rates fell below 50% – an eight year low, according to S&P Global Mobility.

Customers who are loyal to an automotive brand are an invaluable supply of highly profitable sales; these consumers are less likely to negotiate and more likely to generate service and other fixed ops revenues. Due to this, the immediate and long-term opportunities lost by a loyal customer defecting are significant. It’s more important than ever that dealers stay top-of-mind with their loyal customers, in order to proactively defend against competitor’s conquest attempts.

In the past, pricing and selection played a significant role in buyers’ purchasing decisions. Now,  pricing on new and used vehicles has reached record highs and options on the lot are limited; therefore, the dealership customer experience is playing a progressively bigger role in today’s purchasing decisions.

As ongoing inventory shortages, changing customer expectations and growing competition for buyers each challenge dealers to engage and retain their audience. Forward-thinking dealerships are using this moment as an opportunity to revisit what their dealership customer experience looks like.

To succeed in today’s challenging market, dealers need to ensure they’re offering a dealership buying experience that is true to their brand and tailored to their customer at every touchpoint. It is critical to all dealers, even those with vehicles in-stock, to focus on customer experience to secure immediate and sustainable success due to:

·   Inventory challenges continuing this year

·   Decreasing loyalty and increasing competition

·   Customers desiring convenience and the marketplace delivering

Dealership Sales & Inventory Challenges in 2022

On the sales end, consumer demand has continued to stay relatively high, but buyers are still wary of minimal inventory and high prices for what’s available. In July, NADA reported new light vehicle sales increased by 2.5% compared to June, but were still down 8.9% YOY.

With inventory constraints extending throughout the past year and crimping customer demand, S&P Global Mobility downgraded its forecast for U.S. auto sales for 2022 to 14.1 million in August. This data suggests that vehicle shortages will likely extend into 2023, depending on external factors.

Loyalty Is Down, Competition is Up

As previously mentioned, loyalty rates fell to an eight-year low in 2022 largely due to limited availability. Nearly zero OEM incentives and massively increased movement across the industry as customers troy t find anything to fit their needs.

Online-only retailers gained even more momentum amid inventory shortages. According to Automotive News data, CarMax and Carvana were the top used car retailers in 2021, they generated record-setting sales as they competed against brick-and-mortar automotive dealerships for both sales and pre-owned acquisitions.

With buyers finding fewer inventory options at their home dealership and being offered more ways to purchase their next vehicle, customer loyalty in the automotive industry is no longer guaranteed.

As effects from inventory challenges drag on, dealers need to make an intentional effort to proactively protect their customer base from competitors’ conquest efforts. This can be done by offering a dealership customer experience that keeps buyers coming back time and time again. 

Customers Want Convenience that the Marketplace is Delivering

The ongoing rapid digitalization has also led to a rapid change in consumer buying behaviors and expectations.

Even if your dealership isn’t offering the sort of convenient customer experience that today’s buyer expects, your competition will. As customers crave convenience, the marketplace is delivering. To combat the convenience of online-only retailers and other local rooftops, dealers need to simplify every step of the buyer journey. This can be done by meeting customers where they are with an exceptional customer experience.

Start by ensuring your dealership’s buying experience is as consistent and cohesive as possible. Look for opportunities to engage buyers across channels with messaging that educates audiences about their various options. To stand out from the noise of spray-and-pray offers, it’s important that dealers leverage advanced dealership marketing technology tools to tailor their outreach and personalize their messaging for each buyer.

How Dealers Can Improve Customer Loyalty

By using personalized messaging that meets buyers where they are in their journey, dealers are empowered to retain customers, despite inventory challenges, to defend against competitors’ conquest attempts.

To proactively promote customer retention, it’s important to meet buyers where they are in their ownership journey, preferably before they return to market. For example, rising new vehicle prices have pushed some buyers to delay purchases; this has caused some dealers to look to their service drive to build rapport and retain their customers.

Through well-timed and convenient service notifications, the dealership service department offers dealers numerous opportunities to stay in consistent communication with their most loyal customers. These options include marketing specific maintenance plans, service and accessory specials or providing complimentary vehicle inspections. In fact, Mastermind data finds customers who are serviced with a dealer are 2.5x more likely to purchase their subsequent vehicle from the same retailer.


While inventory shortages persist across the globe this year, dealers can still maintain customer retention, improve automotive brand loyalty, and increase sales.

As inventory shortages drag on, successful dealerships will take intentional, proactive action to protect their customer base against the competition’s conquest efforts. Increasing loyalty and improving dealership customer retention can be achieved by:

·   Proactively engaging loyal customers. Dealers need to engage loyal customers before they start shopping around to prevent defection and improve customer retention. Retention strategies can be activated by the marketing and sales teams, and even in the service departments.

·   Personalizing your approach. To stand out from the noise and retain loyal buyers, your dealership needs to craft personalized messaging that proves you know and care for your customers best.

·   Focusing on your customers’ experience by staying in touch. Ensure each touchpoint builds on the last in a helpful manner, meeting your loyal customers where they are in their journey to keep them engaged over time.

Interested in learning how Mastermind can help your dealership embrace future EV sales opportunities? Contact us for a free demo.