The Most Valuable Customers Are the Ones You Already Know
You are likely the same as 44% of other companies who focus more on customer acquisition than retention. This is a problem in every industry but is even more so in the automotive industry. The lifecycle of a consumer is relatively predictable: people buy cars every 3-5 years. Suppose you’re spending all your time and resources towards obtaining new customers. In that case, you’re missing out on the pool of shoppers right under your nose who not only have bought from you before, but you can be marketing to them throughout their lifecycle using the customer data points you’ve collected.
Current customers are more likely to buy from you again; ignoring them costs you money. Trade-ins from existing customers might be one of the best ways to foster loyalty during a time when defection is higher than ever.
Don’t ignore your most valuable customers – the ones you already know.
Existing customers are more likely to buy
While customer loyalty, in general, may be a 50/50 chance, you’re still far more likely to get an existing customer to purchase again than to convert a brand-new lead. They already know and trust you, and if you keep them happy, they will continue to choose you over the competition.
Consistency is vital so you’re top of mind when customers are back in market.
It isn’t only about marketing to them when they are in market, however. It would be best if you constantly were communicating with your customers; it’s simply the message that changes as they move through their individual lifecycles.
Having a system in place to manage your communication structure, such as a marketing automation solution driven by artificial intelligence, can aggregate your data and build individualized consumer profiles that engage customers based on their lifecycle stage and show you everything you need to know about them. The more you know, the better you can communicate to everyone in your database.
Focusing only on new leads costs you money
Not only are you more likely to reconvert an existing customer over acquiring a new one, but it costs five times as much money to attract new customers.
Even the slightest bit of increased retention, as low as 5%, can increase overall profits by an average of 25% to as high as 95%. Ignoring your customer database is costing you money, and the effort needed to engage them isn’t nearly as difficult as you might think.
An effective AI-driven marketing automation solution can determine which customers have the most propensity to purchase or service based on their behavior – i.e., buyer detection. A tool utilizing buyer detection can then automatically deploy the best communications to engage in-market customers for both sales and service, saving you valuable time and money.
Equally, dealers need equity tools to pinpoint customers in a favorable equity position, so you can inform those customers when it might be the best time to trade in their current vehicle for an upgrade sooner than they usually might.
Trade-ins may be the best way to foster loyalty if you do it right
Speaking of trade-ins, on average, people are trading in for new vehicles every 3-4 years. That is a long time for customers to forget their loyalty to you if you only engage with them through cookie-cutter communications.
With the continued shortage of new vehicles, many shoppers are turning to used vehicles. This too has become an issue as used cars are becoming less available as well. One positive is that customers can get a lot more for their trade-ins—and may be looking to do just that. Don’t miss out on ways to restock your inventory by not having the right solution in place.
Successful AI-driven marketing automation solutions can even communicate to customers’ specific VINs they can get with equal payments to what they have now and identify for you desirable used vehicles for trade-in when specific inventory is hard to come by.
By putting a bit more effort into your marketing strategy, you can increase overall revenue by tapping into your most valuable customers – the ones you already know.