Auto dealers have been on a bumpy ride over the past few years. As supply chain disruptions continue to impact inventory, the industry is experiencing permanent shifts in auto retailing. Today, up to 75% of vehicles are sold before they hit dealer lots,1 so customers are traveling further for their vehicles, and, as a result, customer loyalty—especially long-term loyalty—is at a six-year low.2 Meanwhile, advertising strategies are not always keeping up.
And while dealers are seeing record profits due to scarcity, allowing for them to maximize MSRP or even go beyond it, the future is somewhat uncertain. How do these less frequent, higher sales translate into long term profitability? And, how many of these transactions are leading to loyal customers?
The challenges facing auto dealers are changing and as a result, their marketing strategies must evolve. Many dealers who have spent years racing to the bottom of the marketing funnel have discovered that those tactics alone won’t nurture their customers in the long run or bring them back for service and other future needs.
In 2023, effective auto advertising needs to be about more than just the immediate sale. The auto advertisers that win now and in the future are the ones that are focused on driving lifetime value.