Customer Communication Crucial for Auto Retailers

As inventory shortages persist, customers returning to market find few options on the lot. For dealers who do have inventory, historically high prices and oftentimes high equity in their vehicles may drive loyal customers to switch dealerships – or even brands – to find vehicles that fit their lifestyles and budgets.

As sales slow, it’s easy to see why some dealers have pumped the brakes on marketing. But in today’s hyper-competitive market, staying in communication with customers is critical. The dealers who maintain effective and efficient marketing strategies are likely best positioned for success when supply normalizes.  

Why?

Communication and trust go hand-in-hand. In a 2021 study, car buyers ranked trust as equally important as the price of a vehicle when choosing a dealership – with the quality of communication from the dealership coming in at a close third.

Building this sort of trust with buyers is key, especially as loyalty diminishes due to inventory challenges. According to IHS Markit, now part of S&P Global, brand loyalty for U.S. consumers dropped to a six-year low in 2021.

Although inventory challenges impact dealerships of all sizes, they’re especially problematic for smaller-scale dealerships that depend heavily on their loyalty portfolios and community engagement. To proactively protect their portfolio, or even lure customers from their competitors, dealers must turn to effective communication tailored to every buyer and their unique needs.

For example, now is the prime time to contact conquest customers who may consider switching brands to stay in similar models. Ongoing messaging can help keep buyers engaged over time and informed of all their purchasing opportunities, including pre-orders and reserved sales, pre-owned vehicles, similar models and more.  

Of course, consistent communication alone isn’t enough, especially if dealers are blanketing their market with generic messaging. A 2022 automotive customer survey found 40% of consumers say they didn’t contact a dealership in their research process because the dealer didn’t include special offers in their marketing messaging.

Misconceptions can run rampant when dealers don’t clearly outline all their offerings. In that same survey, 35% of customers said they didn’t contact the dealership because vehicle prices were too high, a 28% increase over 2021.

Dealers need to deliver transparent, personalized messaging, appropriate for where customers are in their buying journeys – especially as production delays extend many buyers’ purchasing window. This relies on high-quality data.

Using insights from their dealership’s CRM, DMS and sales platform helps dealers identify which customers are preparing to return to market such as those approaching the end of their lease or warranty. Deeper data can help inform relevant and personalized messaging including the models a customer may be interested in, factoring in relevant details such as what they use their vehicles for each day.

Carla Wade (002)

Don’t join the dealers that slow their marketing efforts. Doing so can add up to diminished loyalty and an extended path to purchase.  Dealers equipped with effective and efficient marketing strategies are better positioned to both maximize their profitability now – and sustain their success for the long term.

Carla Wade (pictured above, left) is senior director-inside sales at automotiveMastermind, whose proprietary automated sales and marketing platform helps dealerships generate success in loyalty, service and conquest portfolios.