For the past few years, the automotive industry has experienced significant change stemming from a range of factors including inventory shortages, diminishing loyalty and rapid digitalization.
At the dealership level, these challenges are also making way for new opportunities for dealers to conquest new customers, if they can take a targeted approach to engaging the right buyers.
In this blog post, we will dive into the world of conquest marketing strategies by exploring various opportunities that can empower dealers to boost their sales in 2023. Additionally, we will discuss how dealers can optimize their conquest marketing tactics in the coming year, ensuring sustained success.
Dealers aiming to be proactive should focus on five key areas:
- 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
- Focusing on the customer experience
Identifying and Attracting “Nomadic” Car Shoppers
“Nomadic” buyers, also known as “one and done” buyers, are customers who purchase from a brand once before defecting to another. As inventory challenges linger on, Nomad buyers are posing even greater risks of defection. In fact, about 58% of Nomads left their brand in the 12 months ending July 2022. That's the highest defection rate for Nomads in at least 10 years, according to data analysis by S&P Global Mobility.
This represents a potentially lucrative opportunity for dealers to conquest customers who previously may not have considered buying from their brand. To conquest customers who haven’t shopped with them before, dealers need to build trust with prospective customers.
This is why knowing the unique car buying factors that drive nomadic buyers’ car buying decisions is critical. In general, nomadic shoppers are heavily price-sensitive, which means they are a critical audience for leveraging your OEM incentives.
This is where analytics-driven predictive conquest marketing is an incredibly powerful tool, thanks to its ability to factor in the specific offers your dealership has available and identify the consumers most likely to respond to what you have to offer at any given time.
Promoting Loyalty and Retention Strategies Together
It’s not just Nomad buyers who are defecting. Overall, industry-wide brand loyalty declined from 54.6% in pre-pandemic 2019 to 50.2% in 2022 according to S&P Global Mobility. While industry-wide brand and manufacturer loyalty has been steadily increasing alongside days’ supply, not all OEMs are feeling the relief from inventory shortages. While some brands are finally seeing relief for the first time since the pandemic, others are still struggling to keep dealers supplied, according to S&P Global Mobility reports.
To retain customers, and attract the above-mentioned nomad buyers, dealers of all sizes and OEMs must adopt a comprehensive approach to identifying high-quality potential leads. Through the utilization of behavior prediction technology, auto dealers can engage the prospects most likely to respond to their dealership's offers, spanning:
- Conquest portfolios
For instance, leveraging Mastermind's Market Conquest feature, dealers gain up to 15 additional monthly sales by leveraging household and vehicle ownership insights.
Taking Advantage of the Used Car Marketplace for Conquest Opportunities
With new vehicle prices reaching historic highs and more customers considering pre-owned models, its crucial dealers harness the power of predictive conquest marketing tools to support both new and pre-owned sales. Such support includes integrating with data from a dealer’s available inventory.
Remember: Used conquest auto sales heavily rely on the availability of specific inventory and the ability to quickly identify and engage high-quality prospects with targeted offers for specific vehicles that fit their changing lives.
Dealers should leverage their DMS, CMS and dealership sales platforms to effectively identify those prospects who are likely to be in the market for a used vehicle. This allows them to structure enticing offers, leading to the ever-important increased success and profitability, that make the most of:
- OEM certified pre-owned (CPO) programs
- Favorable financing terms
- The dealership's own inventory
Connecting the Dealership Service Drive to the Showroom Floor
In recent years, the service drive has quickly emerged as a crucial revenue stream for dealerships. Amid inventory shortages, customers are holding onto their vehicles for longer. According to S&P Global Mobility, in 2023, the average age of light vehicles on the road reached 12.5 years, up from 12.2 in 2022. This ever-growing vehicle lifespan translates into an increase in repair orders – and a growing opportunity for dealers to conquest service-not-sold customers.
In fact, Mastermind data indicates that customers who have their vehicles serviced at the dealership are approximately 2.5 times more likely to purchase their next vehicle from the same dealership.
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, and not every service customer will be a qualified sales customer.
To maximize their service conquest efforts, it’s critical for dealers to engage the best prospects before they arrive at their service appointment, by integrating data from their:
- Maturity manager
- A comprehensive data mining solution
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.
Building an effective dealership customer experience (CX) strategy is an incredibly powerful tool for building customer loyalty and protecting against conquest losses. Dealers need to look for opportunities to connect with 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.
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.
Want to learn how Mastermind can help support your dealership’s conquest sales efforts? Contact us for a free demo.