A more competitive marketplace requires more strategic action.
Compounding the challenge of closing leads is how confident dealers themselves feel about their ability to generate leads (down 10 percentage points YoY).
In such an environment, two key strategies are helping dealers differentiate their offers and gain (and retain) customers:
#1 Protect and grow relationships
#2 Differentiate their brand(s) and motivate consumer action
Protect and grow relationships
There are a number of other factors at play in today’s increasingly competitive automotive marketplace beyond the obvious: “price” and “inventory.”
When it comes to auto buyers’ criteria for choosing a dealership, our study reveals – beyond the initial factors of price and having the desired vehicle in stock – the next highest-ranking attributes all revolve around relationships. Past relationships with a dealer for both sales and service create a strong foundation for future loyalty. Additionally, a dealer’s reputation via word of mouth, online reviews and ratings is a valuable asset earned through consistent customer satisfaction, ethical business practices and transparent communication.
At the same time, shoppers are losing confidence in salespeople. In fact, auto-buyer perception of salesperson expertise has dropped five percentage points in the past year. With the growing complexity of vehicle features and technologies, a knowledgeable salesperson is an essential resource to help auto buyers navigate the process and make confident, informed decisions.
Equally concerning is the significant disparity between how auto buyers perceive salesperson expertise and how dealers assess themselves in this regard. This disconnect raises critical questions about the industry’s approach to customer engagement and underscores the urgent need for a transformative strategy.
The best way to solve the problem is to own it, and work to overcome it. How? With data-infused training. The best training incorporates daily defection data which:
- Empowers your salesforce through near-real-time feedback on what’s working and what’s not
- Allows you to train your salesforce with known lost opportunities identified in near real time
- Allows your salespeople to pivot communications to relevant customer messaging, including service offerings
Training can also surface issues that need correcting and teach techniques to better engage with customers. Training salespeople to understand today’s retail selling dynamics has become the “price of entry” in creating a salesforce that’s knowledgeable and engaging. Weak salespeople can become better and more confident with targeted training, while strong salespeople can become a dealership’s competitive advantage.
Differentiate and motivate
Now – more than ever – data can help dealers dive deep into ways to target and motivate auto shoppers – and one way to do that is through incentives. With auto buyers visiting more dealerships and competition ramping up for sales, OEMs and dealers alike are getting back into the incentive game to get potential customers through the doors. While OEMs often use broad brush strokes to build awareness and motivate action through incentives, dealers can be more surgical in their application of incentives to drive action.
According to our research, auto buyers reported it would take as little as $35 to motivate them to take a test drive (82%), test drive an EV (67%), bring their vehicle in to resolve a recall (84%) and get vehicle maintenance (78%). The delivery of private incentives is proven to move the needle on both sales and service – and even small incentives motivate. In fact, one solution, Urban Science’s AutoHook,3 which empowers dealers to deliver targeted incentives through text, email or website overlay, has been proven to drive an 8.9% new-vehicle sales lift – that’s roughly 7.5 incremental sales over a 60-day period.
In this era of personalized marketing, understanding the nuances of customer preferences and behavior in near real time is pivotal. By harnessing the insights derived from this data, OEMs and dealerships can craft incentives tailored to individual needs, driving meaningful actions and bolstering sales and service revenue. The ability to deliver precisely targeted incentives through near-real-time industry sales data empowers the automotive industry to establish deeper connections with customers, enhance brand loyalty, and ultimately, thrive in an increasingly competitive market.