The good news? To date, automotive sales have remained stronger than many analysts originally predicted, with customers of all ages continuing to buy both new and pre-owned vehicles. Considering some of the earlier ominous forecasts, it’s no wonder numerous retailers are breathing a collective sigh of relief.

The not-quite-so-good news, at least for those retailers, though, is that new AutoLoop analytics show that customers are holding on to their vehicles significantly longer before deciding to repurchase. Since a key indicator of upcoming sales is the length of present vehicle ownership, analyzing current trade-in activity among today’s customers is crucial, as it offers invaluable insight into future vehicle sales.

To determine exactly how long customers are keeping their rides now, AutoLoop analyzed trade-in activity over 100,000 vehicle purchases. As a result, we found that in the first half of 2018, the average age of a trade-in was 5.1 years.

In 2017, however, the average age was 4.7 years—and in 2016, just 4.5. While this trend was fairly consistent across vehicle brands, luxury and domestic dealers showed the biggest increase.

So how does this translate to actual numbers for a retailer?

According to the data, the age of a trade-in vehicle is increasing by 6% each year. Another interesting discovery is that longer loan periods did not factor into this trend. In fact, our research showed the exact opposite. Customers whose loan terms exceeded five years actually traded in their vehicles sooner than buyers with shorter finance periods.

Those findings are just as significant for dealers as the ones showing a higher age on trade-in vehicles. They indicate that revenue from loyal sales customers will likely decline as customers choose to stay in their current vehicles longer and delay subsequent repurchases. Accordingly, retailers should start placing a higher emphasis on service and sales loyalty now, combining those efforts with the most intelligent sales marketing. Dealers would also be wise to invest significantly more in retention programs that continuously engage customers throughout the life of a vehicle.

In addition, retailers should develop more sophisticated approaches to interacting with owners who are considering replacing their vehicle, particularly as this segment slowly declines. Digital retailing is one such technology that provides a wealth of resources aimed at capturing the customer’s attention. Using those technologies to create more engagement opportunities helps dealerships maintain a competitive advantage, especially with customers who are more hesitant than ever to contact a dealer during the vehicle purchase process. Plus, digital retailing technology allows dealers to expand and enhance customer profiles, thus helping them deliver the smart, uniquely personalized experience customers are seeking most.

What do customers expect during the vehicle purchase process? What do they value most? In a survey included in the AutoLoop 2017 Digital Experience Study, we discovered valuable insights to these questions and more – insights that can give your dealership the competitive edge when customers start shopping. Read on to grasp a better understanding of what customers want, and how to meet their needs to capture more sales.

Promote Price Over Payment

In our studies, nearly 40% of consumers preferred the right price overall, as compared to 23% who were looking for the right monthly payment and 38% who wanted the right combination of both. Catch the customer’s eye by keeping the price point prominent in your email and direct mail marketing communications. Providing the right price also builds trust through transparency, making customers more likely to visit your showroom to seal their desired deal.

Stay Top-of-Mind – and Top of Their List

Just over 70% of consumers preferred to negotiate in person rather than online and planned to visit two dealerships. Make sure your dealership is one of them by sending consistent, targeted communications through a variety of channels for maximum reach. And make it personal by emphasizing the extra comforts your dealership offers to better the customer experience, such as no-pressure sales, a simplified shopping process, and, of course, the vehicle they want at a desirable price point.

Highlight the Features They Love

What are customers looking for in a vehicle? Newer technology was most sought after by 40% of consumers, and 39% simply wanted a newer vehicle in general. Other features to spotlight in your marketing communications include:

• Higher quality
• Better fuel economy
• More seating and/or cargo room

You know how service visits affect service retention, but do you know how service visits relate to the customer buying process? According to a recent study conducted by AutoLoop, we discovered that the peak repurchase rate occurs between the fourth and eighth service visit. This valuable insight gives you an edge in your marketing strategy: increase engagement and revenue by sending your service customers sales communications at precisely the right time. Learn how below.

The Facts: How Service Visits Relate to Repurchase

We analyzed thousands of deals across a large sample of dealerships and found that repurchase rates are highest between the fourth and eighth service visit; rates begin to drop after more visits (likely meaning that customers are keeping their vehicles long-term). Luxury brands are even more likely to purchase during peak intervals, and sooner too – the repurchase rates begin closer to the third service visit.
                       

Maximize Your Marketing: Here’s How

With this insight, you can make the most of your sales marketing efforts to engage customers at the ideal time in the buying process. Target your service customers based on the number of service visits. And stay top-of-mind by sending sales promotions with your current incentives, personalized offers based on your customer data, and more. Ensure your customers are informed of your best deals while they’re considering repurchasing – and encourage more of them to visit your showroom at their next service appointment.

Does the day of the week an email campaign is launched affect whether that email is opened? It does! And boosting your open rates ultimately increases response rates – meaning more ROI for your store.

In a recent study, we identified how dealers could drive ROI by analyzing on-demand email campaign launch dates. In our research, we were able to pinpoint the best days of the week as related to email open rates. Read on to learn how to improve your campaign engagement by optimizing your launch days.

What We Discovered

We analyzed all on-demand email campaigns launched through our system between January 2015 and September 2017. And in our analysis, we found that the beginning and middle of the week showed higher volume and open rates. While the weekend showed lower volume, the open rates were significantly higher than during the week – a strong indicator of customer engagement.

How to Maximize Your Results

For non-premium brands, target the first half of the week, Monday through Wednesday, as your prime days to drive engagement. For premium brands, the ideal campaign launch days are Tuesday and Thursday. Although the weekend shows lower volume, all brands should consider trying a Saturday or Sunday campaign launch to find out how it performs for your store.

Summer is here – and for luxury retailers, that means a significant increase in tire sales. Based on an analysis of over 9 million repair orders, we’ve discovered a large increase in tire demand for high-end models beginning this month. Peaking at nearly 25% of all ROs in July, this spike in tire sales goes through August before returning to normal levels in September.

Timing is Everything: Create Campaigns Now

Although all dealers see escalated tire sales in the last two months of the year, only luxury stores experience a dramatic surge during the summer – and it’s the ideal opportunity to drive profit even further with strategic new tire campaigns.

Start the season by showing customers why summer tires make a difference on their luxury vehicle, or remind them of all the safety advantages before they get on the road. Help them start their vacations with more peace of mind by offering complimentary oil changes, multi-point inspections, or car washes to maximize likelihood of purchase.

You can also feature personalized, limited-time specials, or create incentives based on an individual’s prior activity. And by consistently reminding customers of your technicians’ extensive training and expertise – and their exclusive use of genuine OEM parts – on each communication, you’ll reinforce the expectation of premium care for their luxury vehicle in your service lane.

Identify, Target, Increase

To maximize your response rates, use a marketing program with built-in machine learning to identify the customers most likely to buy tires in the near future. Then, target that segment with the most relevant and strategic messaging to further drive the sale. With the combination of a seasonal sales spike and predictive analytics, you have multiple possibilities for peak profit on tires for luxury brands during the summer months ahead.

Doug Van Sach shares how tire sales impact customer loyalty in this video blog.

Doug Van Sach explains the growing gap between retailers and automotive consumer experience in this video blog.

Doug Sach, VP Analytics & Data Services for AutoLoop discusses how driverless cars could affect the auto industry in this short video blog.