Understanding Dealership Customer Lifecycles

By: Lauren Littlefield

Even though more and more consumers are shopping for cars online than ever before, the relationship between car buyers and your sales team is still extremely important.


Even though developing those relationships can be challenging, it isn’t impossible — especially when car dealerships understand and make use of customer lifecycles. In her first guest post for PERQ, Lauren Littlefield of Right On Interactive explains how car dealerships can leverage customer lifecycles to develop stronger relationships and match the journey most car buyer’s experience.


The customer journey for car buyers may seem pretty straightforward, but in reality it’s complex and oftentimes difficult for dealerships to manage. Car buyers today conduct most of their research online and by the time they set foot on the lot, they usually have an idea of which models they’re interested in.


The art of the sale has seemingly been lost, yet customer relationships remain a dealership’s most valuable asset. So, how can car dealerships evolve their customer lifecycle to match the journey most car buyers’ experience?


“The art of the sale has seemingly been lost, yet customer relationships remain a dealership’s most valuable asset.”


When customer relationship management, or CRM, systems were introduced to the automotive industry in the 1990s, dealerships experienced newfound insights into who their customers were, how many times they had purchased or leased a vehicle from them or visited the service bay, and even details such as the color of vehicle they preferred. Now, even more information is available to dealerships – which is both positive and frustrating. While dealers know more about their customers, many lack the tools needed to take advantage of that information.


How car buyers go about purchasing a car has changed drastically in the past 10 years. The majority of buyers are doing more of their own research online and spending less time at dealerships test driving cars and speaking with salespeople. As a result, many car buyers lack a relationship with a salesperson and dealership, which greatly decreases the likelihood of them becoming a returning customer.


Just one year ago, McKinsey found the average buyer visits 1.6 dealerships while car shopping. Compare that with 10 years ago when folks visited an average five dealerships before making a purchase and you can see why dealerships are concerned about their online footprint and marketing efforts.


The Internet has become the biggest player in driving car sales. That’s why the first stage in the new car dealership customer lifecycle focuses on “anonymous leads” who are doing research in anticipation of a new or used car purchase. These folks haven’t submitted any information to the dealership but have spent time on the dealer’s website looking at inventory and potentially reading blog posts or watching videos. They are also looking at the dealership’s Facebook page and Twitter feed as well as reading online reviews. They are in the early stages of their journey and are gathering information.


The goal of the dealership is identify these prospects so they can begin to engage with them at a deeper level, beginning to build the ever-important relationship. What’s more, the dealership should also be actively marketing to create more of these anonymous leads via social media advertising, pay-per-click advertising and search engine marketing.


The best way to identify these unknown researchers is to entice them to provide you with their contact information. Of course, this can be accomplished by a “Contact us” button or “Schedule a test drive” link, but consider other calls to action such as online appraisals, sales and service specials (with an option to sign up for a e-newsletter) and online chat functionality with a dealership representative.


In addition, don’t forget about social media and engage with contacts who ask questions or make comments regarding your dealership or the brand(s) available on your lot.


Once the unknown leads are identified, the dealership can begin marketing to them in an effort to get them in the door. Marketing at this point should include emails relevant to their new stage in the lifecycle, which is more of an “identified leads” phase.


These folks have indicated a willingness to hear what the dealership has to say, so it’s important not to squander or misuse this opportunity. Provide them information on the vehicles they were interested in, or if a vehicle of interest is unknown, send them information on the dealership such as inventory updates, upcoming sales or specials, service bay information, and even community involvement stories. The key here is to stand out and capture the attention of the identified lead and build engagement.


“These folks have indicated a willingness to hear what the dealership has to say, so it’s important not to squander or misuse this opportunity.”


Once the identified lead is engaged with the dealership they are more likely to feel a connection, or relationship. This is the point at which they move to the next stage in the lifecycle as an “engaged lead.”


Engaged leads require more attention than identified leads. They are looking for a reason to visit the dealership and are likely to read emails or open letters from dealership personnel they are familiar with such as the Internet sales manager or a business development specialist. The goal with this crowd is to schedule an appraisal or test drive with them. Once that happens, they move to the next stage in the lifecycle – “on-site engaged lead.”


This is where the lifecycle gets fun and salespeople can be salespeople again. The key here is to continue building a relationship through engaging marketing tactics such as personalized emails, phone calls, text messages and hand written notes (which are rare in this day in age). The goal is to get the on-site engaged lead to come back in and make a purchase, if they haven’t already!


Which brings us to the next stage, “first time buyers.” These folks are pretty self-explanatory; however, just because they’ve made a purchase doesn’t mean the marketing stops. Remember, customers are the most likely people in any database to open the emails of a brand – and that goes for car dealerships, too!


First time buyers should receive regular updates from the dealership, service discounts, car purchase anniversary cards and even a note on their birthday. They want to be treated differently than leads and deserve to receive more than a “thank you” note the week after delivery. By continuing to build engagement with first times buyers, dealers increase the likelihood of moving these contacts into the “repeat buyers” lifecycle stage.


Repeat buyers are the most important customers of any car dealership. It’s often been said that “floor traffic is for green peas,” meaning only new salespeople work with the folks who walk on the lot for the first time. Experienced and successful salespeople work their database of first time and repeat buyers, even to get referrals and never have to speak with a “floor up” again.


In order to successfully move unidentified leads through the dealership customer lifecycle to repeat buyers, dealerships need to focus on building engaging relationships. From online advertising to personalized emails and handwritten notes, every tactic utilized throughout the lifecycle should be done with one goal in mind: to provide the contact with the information they need to move to the next stage.


What would you name your lifecycle stages? Where do you think the majority of your database contacts reside – do you have more anonymous leads than on-site engaged leads? What about first time buyers versus repeat buyers?