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September 20, 2024
The 4 W’s: How to Identify and Engage the Best Sales Leads
From the rise of electric vehicles to shifting consumer expectations, constant change in the automotive market presents real challenges and significant opportunities for dealers.
According to S&P Global Mobility, U.S. light vehicle sales are projected to reach 1.42 million units in August – up over 7% year-over-year and 11% from the previous month. While high interest rates and elevated vehicle prices continue to limit potential growth, improvements in available inventory and incentives are expected through the remainder of the year.
With inventory growing steadily, dealers have a renewed opportunity to improve brand loyalty. Industry brand loyalty rates increased to 52.5% in the first half of 2024, marking the first year-over-year rise since 2020, according to S&P Global Mobility data.
To stay ahead of today’s evolving market, dealers need to go beyond responding to customer demand and take a more proactive approach. By leveraging data-driven insights, dealers can anticipate customers’ needs and engage them at the right time, with the right message.
This requires dealers to take a data-driven approach, answering key questions including:
- Who are your best sales leads – and why should they be prioritized?
- When are they likely to be in-market?
- What vehicle is the customer most likely interested in buying?
- How will they most likely purchase it?
Understanding Who and Why
In a competitive market, efficiently targeting the right customers not only improves sales outcomes but also enhances customer satisfaction and loyalty, both of which are crucial for long-term success. By prioritizing their most promising prospects, dealers can increase sales conversions, reduce wasted time and resources, and ultimately drive greater profitability.
While a dealer’s CRM provides a snapshot of where a customer’s journey began, it often lacks the context needed to understand their current needs. Similarly, relying solely on DMS data gives only part of the story, such as a customer’s vehicle purchase history, but misses the nuances of their evolving situation. A customer who bought a vehicle three years ago may now be in a different financial or personal position, making it crucial to have a full understanding of their present circumstances.
To truly understand and proactively engage potential buyers, dealers need to consider additional insights such as payment history, trade equity, vehicle ownership trends and recent market activity. By incorporating these insights, dealers can identify their best sales leads before they return to market and craft personalized communications that reflect where they are in their unique buying journey.
Download the Whitepaper: 3-Step Guide for Dealership F&I Success Amid Inventory Shortages
As the automotive retail market grows more crowded, it’s becoming more critical – and more challenging – for dealers to understand what their customers are most likely to purchase. According to S&P Global Mobility, today’s consumers have 450 nameplates to choose from. As electrification continues, that number will rise 30% to nearly 650 nameplates by the end of the decade. Today, hybrid and EV buyers make up nearly 10% of the market, more than doubling in recent years.
To stay ahead, dealers need to go beyond basic customer data and analyze key factors like customer behavior trends, vehicle preferences and shifts in the market such as the rise in demand for EVs and hybrids. Dealers need to work with customers to explore every opportunity to get them into the right vehicle including exploring personalized offers calculated with equity and any available incentives; pre-orders and reserved sales or certified pre-owned options.
By analyzing customer data, dealers can better align their inventory to what their customers are most interested in purchasing, helping proactively improve the buying experience, drive sales and build long-term loyalty.
Defining When
To gain a competitive edge, dealers need to engage buyers before they return to the market. This requires sales teams to look beyond the next 30 days, analyzing customer behaviors and broader market trends to predict when buyers will likely need a new vehicle.
Because no two buyers are the same, personalizing communication to fit each customer’s timeline and preferences is key. By leveraging historical data and predictive analytics, dealers can effectively forecast when buyers are most likely going to re-enter the market. Customer insights like vehicle ownership length, mileage and warranty status, can help determine when the best time is to engage prospective buyers, ensuring that communications are well-timed and relevant to the customer’s needs.
Automated tools can assist by scheduling follow-ups and reminders, making sure offers are well-aligned with customer preferences. By maintaining consistent communication across touchpoints including email, social media, direct mail and in-store interactions, dealers can create a cohesive customer experience that helps keep the dealership top-of-mind when customers return to market.
Specifying How
As vehicle prices remain high, dealers need to explore payment options to make vehicles more accessible to their customers.
Buyers today are more price-sensitive than ever, so providing a range of financial solutions – whether through lease buyouts, extended loan terms or alternative financing plans – can help ease the financial burden and open up more opportunities for customers to make a purchase.
Dealers need to work with buyers to explore various payment options to find the best solution based on their unique financial situation. This can include comparing a lease buyout to a new lease or offering different loan term lengths, or exploring residual values, trade equity and interest rates to determine the most financially manageable path forward.
Providing clear and transparent payment options ensures customers fully understand their costs and feel more confident about their purchase. By offering solutions personalized to individual financial needs, dealers can make it easier for customers to proceed with a purchase, improving both the buying experience and building customer trust.
Download the Whitepaper: 3-Step Guide for Dealership F&I Success Amid Inventory Shortages
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In today’s rapidly evolving market, staying ahead means not just identifying the right customers but engaging them in the right way, at the right time, with the right offer. After determining who, what, when and how a customer is likely to purchase, dealers must have clear processes in place to ensure accountability and track performance.
Recognizing and rewarding success is key to maintaining motivation and driving better results within the sales team. By fostering a culture of accountability and celebrating achievements, dealers can encourage continued performance and improvement.
Taking this sort of data-driven approach does more than increase sales. It empowers dealers to turn challenges into opportunities for long-term growth.
Want to learn how Mastermind can enable your dealership to predict and engage every buyer? Request a demo.
