The automotive industry has been hit with challenges for many years now due to supply shortages, changing customer trends and digitalization.
Now as ongoing inventory shortages are pushing some buyers to switch dealerships or even brands, dealers need to focus on a successful conquest marketing strategy. In this blog post, we’ll share conquest opportunities to increase sales for dealers in 2022 and how dealers can optimize their conquest marketing strategies in the year ahead including:
· Identifying and attracting “nomadic” car shoppers
· Promoting loyalty and retention strategies together
· Taking advantage of the used car marketplace for conquest opportunities
· Connecting the dealership service drive to the showroom floor
Creating a Home for the Nomadic Shopper
“Nomadic” consumers are car shoppers who are willing to skip from brand to brand when buying a car in search of exactly what they want, rather than remaining loyal to their most recent purchase. Even with brand loyalty reaching an all-time high in 2020, the gains were short-lived and these nomadic consumers became a powerful force in the marketplace.
Following the myriad disruptions starting in 2020, the current microchip shortage has hampered sales – and loyalty rates – for almost every brand. According to IHS Markit, a part of S&P Global Mobility, loyalty declined as consumers returned to the market with limited choices. Additionally, there is a strong positive correlation between days’ supply and vehicle make loyalty, demonstrating consumers’ willingness to switch dealerships – or even brands – to purchase the vehicle they want.
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3 Step Guide to Dealership Conquest Marketing in 2022
Analytics-driven predictive conquest marketing is an incredibly powerful tool in the search to reach the right people at the right time with the right messages. Thanks to its ability to factor in the specific information, inventory and pricing from your dealership, predictive marketing tools can identify the consumers most likely to respond to what you have to offer at any given time.
Promote Loyalty and Retention Strategies Together
As inventory challenges linger on, customer brand loyalty has diminished. According to S&P Global Mobility, as the auto industry’s SAAR plummeted from 18.5 in April to 12.2 in September 2021, brand loyalty followed with a correlation coefficient of 0.79.
By August, S&P Global Mobility reported brand loyalty dropped to a six-year low, due in part to the inventory crisis. At the same time, loyalty attached to body style grew 1.1%, with sedans, pickups and sports utility vehicles all experiencing improvements. This showcases customers’ willingness to switch brands to purchase the style of vehicle they want.
This presents dealers the unique opportunity to conquest new customers that possibly wouldn’t have considered their brand in the past. But without access to their purchasing history, dealership marketing tools powered by predictive analytics are critical to identifying and engaging prospective conquest sales leads.
To promote customer retention while conquesting new customers, dealers need to take a holistic approach to identifying prospective leads. In order to find leads across their loyalty, service and conquest portfolios, you can use leveraging behavior prediction technology to engage the prospects who are most likely to respond to their dealership’s available offers.
For example, with access to household and vehicle ownership insights, dealers who leverage Mastermind’s Market Conquest feature gain up to 15 incremental sales per month.
Using the Used Car Marketplace for Conquest
According to recent reports from Manheim, wholesale used-vehicle prices have rebounded after minimal losses in Q1. The Manheim Used Vehicle Value Index (MUVVI) increased 24.8% from a year ago, and the unadjusted average price is up 23.2% from this time last year.
As Q2 approaches, experts anticipate Q2 to be the strongest part of the year for used light vehicle sales and prices. As consumer demand increases, many dealerships are unable to capitalize due to limited inventory, pushing many would-be new vehicle shoppers to consider pre-owned options in their next purchase cycle.
This is where having predictive conquest marketing tools connected to your new vehicle sales operations and pre-owned inventory and DMS can pay dividends. Used conquest sales are heavily product-driven, fueled by a dealership’s specific inventory and how quickly that dealer is able to identify and engage high quality prospects.
Using predictive marketing tools, leverage your DMS, CRM and dealership sales platform to identify prospects likely to be in the market for a used vehicle. From here, structure offers that take advantage of OEM programs like CPO and special financing terms.
Driving Conquest Leads Through the Dealership Service Drive
The service drive has become an increasingly valuable source of dealership revenue in recent years. And while service-not-sold conquest auto sales leads have always been valuable to dealerships, there are a few broad trends that suggest dealership service conquest will only continue to grow in importance.
According to research from S&P Global Mobility, customers are holding onto their vehicles longer than ever. The average age of light vehicles on the road reached 12.1 years in 2021. Not only does this aging fleet mean more repair orders, research finds service loyalty begets sales loyalty.
Mastermind data finds customers who service their vehicle at the dealership are about 2.5x more likely to purchase their next vehicle at that dealership. Of course, not all service customers will be interested in purchasing or trading in their vehicle nor will all be well-qualified. To improve the efficiency and efficacy of the service conquest efforts, dealers need to take a proactive approach by mining their upcoming service appointments for opportunities.
It’s important to remember your DMS only gives you a small piece of the puzzle. Take data from your CRM, maturity manager and a comprehensive data mining solution to engage the best prospects before they arrive at their service appointment. Some dealers have taken a similar approach to mining upcoming service appointments for prime trade or buy-back opportunities. This empowers dealers to acquire in-demand trades and flip existing inventory all from their service drive.
Focusing on the Customer Experience
Building trust with conquest customers is key to capturing their business. So when establishing a new customer relationship, it’s crucial to reach buyers early in their buying journey, preferably before they start shopping around.
Dealership customer experience (CX) strategy is your most powerful tool for building customer loyalty and protecting against conquest losses. Look for opportunities to connect with your audiences across channels and develop brand-focused messaging that keeps your customers informed about the topics that matter to them most.
This includes messaging related to:
· Available inventory
· Current promotions
· How to assist their needs
The previously mentioned dealership marketing tools are critical to this process, enabling dealers to easily identify which customers are preparing to return to market, such as those approaching the end of their lease. These tools also empower dealers to engage conquest customers with personalized offers that “plant the seed” that right now is the time to buy.
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Dealership Templates for Customer Communication Amid Inventory Shortages
Conquesting customers from the competition in 2022 requires dealers to take a proactive approach every step of the way. By developing and employing a data-driven strategy for identifying and engaging leads, dealers are empowered to expand their portfolios and increase their market share in the year ahead.