As we approach 2024, it’s more crucial than ever for dealerships to stay ahead of the curve when it comes to knowing their customers.
Buying behaviors, preferences, and product mixes are changing and new customer types are emerging. Recognizing these new buyer personas and understanding their unique needs and preferences is key to future dealership success.
Today’s buyers in the U.S. have nearly 450 vehicle nameplates to consider, according to S&P Global Mobility. With the arrival of electric vehicles (EVs) across every major OEM and brand, approximately 650 models will be competing for showroom space, marketing budget, and customer attention within five years.
By recognizing and understanding their evolving customer base, dealers can take a proactive approach at identifying their most valuable sales prospects and engaging buyers before they return to market.
While every dealer’s market will look a bit different, four key personas for dealers to know in 2024 include:
● Future EV buyers
● Buyers new to your dealership’s PMA
● Service-to-sales customers
● Nomad customers
Prospective EV Buyers
EV buyers have remained an elusive target for U.S. auto dealers.
According to S&P Global Mobility data, EVs also remain a mostly additive purchase, with 7 in 10 joining other vehicles in the driveway instead of replacing one.
Dealerships must be equipped not just with the right inventory, but also with the knowledge and expertise to speak to each customer’s motivating factors, address common misconceptions, and highlight the benefits of EV ownership.
Using dealership marketing technology, dealers can assess the factors motivating a buyer’s purchase decisions to tailor their messaging. For example, for a family-oriented buyer, this may mean highlighting the safety features, spaciousness and low maintenance costs of an EV, in addition to early trade-in offers, OEM incentives, tax credits or new electric models available for pre-order to motivate their next purchase.
New to Market
With the rise of digital retailing, dealership’s primary market area (PMA) has expanded significantly, offering greater room for variability and growth. According to U.S. census data, the share of movers from a different state or county rose by 2.4 percentage points in 2022 while the share of movers from abroad approximately doubled, from 2.3% to 4.9% – the highest since 2018.
As new buyers move into dealer’s PMA, they likely won’t have brand loyalty established with any local dealership. This offers dealers the opportunity to engage and retain customers for the long-term – starting with a great first impression.
With dealership marketing technology like Mastermind, dealers can mine their PMA for new conquest customers and engage prospects with welcoming offers or introductions to the dealership’s services. These tools also enable dealers to personalize their approach – even with new customers – building trust with buyers from the very first touchpoint.
Service-to-Sales Customers
Even before inventory shortages, the average age of vehicles on the road was increasing, but in recent years, the trend has accelerated. According to S&P Global Mobility, the average age of light vehicles hit 12.5 years in 2023 – a record high.
As vehicles age, they require more frequent and extensive servicing. When these customers come in, dealerships have the perfect chance to showcase newer models and their features. By mining their upcoming service appointments, dealers can leverage predictive marketing technology like Mastermind to identify the best service-to-sales leads, such as when a service customer is due for an upgrade based on the age and condition of their vehicle.
For instance, a customer coming in for frequent repairs on an older model might be intrigued by the latest safety features, fuel efficiency, and tech integrations of newer models. Special trade-in incentives, flexible financing options or highlighting the reduced maintenance of newer models can be strong motivators for these customers to consider making a purchase.
Nomad Buyers
Nomad buyers, also known as “one and done” buyers who own a brand once and defect, are a challenging yet invaluable segment for dealers. About 58% of nomads left their brand in the 12 months ending July 2022, representing the highest defection rate for nomads in the last 10 years, according to data analysis by S&P Global Mobility.
Looking ahead, nearly 6 of every 10 nomad shoppers are expected to switch brands with their next vehicle purchase, representing a huge opportunity and potential challenge for dealers in 2024.
First, getting ahead of defections is key. Using the insights from dealership marketing tools, dealers can delve deep into the reasons for brand switching. For instance, if a customer left due to unsatisfactory after-sales service, dealers can emphasize their commitment to post-purchase support, offer extended warranties or even provide special service packages.
Dealers can also leverage this opportunity to conquer nomads driven by the allure of new features by engaging prospective buyers with sneak peeks into upcoming models, exclusive test drive invitations or loyalty programs that offer them early access to new launches.
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The automotive landscape is rapidly evolving, and dealerships need to adapt with agility. Recognizing and understanding the diverse buyer personas is not just about making sales today, but about building relationships that will drive the dealerships of tomorrow.
Regardless of persona, whether it’s EV enthusiasts, newcomers, loyalty and service customers or even nomad buyers, a tailored approach backed by data-driven insights is the key to success in 2024 and beyond.
Want to learn how Mastermind can help your dealership engage and retain buyers in 2024 and beyond? Contact us for a free demo.
