Engaging potential car buyers can be difficult—if you don’t know who to target and how to get them interested, all your hard work to close a good deal can go to waste. Car dealerships should devote their time to customer interaction because if they don’t, sales are more likely to suffer.
Knowing the right business opportunities from the start can set apart a thriving dealership from a failing one. This blog explores key tactics for distinguishing between the active and passive buyers you should give your focus to and targeting car buyers with data.
What’s the Difference?
Active Buyers
An active buyer is someone who is currently in the process of purchasing a vehicle. They are:
- Actively gathering information by visiting dealerships
- Comparing different makes and models
- Seeking the best deals
- Ready to engage with dealership staff
- Ask specific questions
- Make decisions about their purchase
Overall, they are driven by a clear intention to buy, making them more open to relevant marketing efforts and promotional offers.
Passive Buyers
A passive buyer lacks a specific objective for the vehicle they desire. Often labeled “tire kickers” by salespeople, passive buyers exhibit the following characteristics:
- Browsing various makes and models without commitment
- Asking questions out of curiosity rather than intent
- Shopping around but rarely making purchases
- Preferring to explore options leisurely
- Showing indecisiveness about what they want
Turning a passive buyer’s interest into a purchase demands more convincing and strategic persuasion before they are ready to make a financial commitment.
Why Target Active Buyers Using Customer Segmentation in Car Sales
Focusing on active buyers is integral because they present immediate opportunities for sales. Passive buyers, while potentially profitable, require extensive time and effort to convert as their interest is less actionable. By directing marketing efforts towards platforms and audiences that active buyers engage with, such as automotive websites, dealerships improve their chances of making timely sales. Here are some other reasons:
- Shorter sales cycle
- Higher click-through rates
- Better results from catered messaging
- Saves money on advertising costs
Using Lotlinx for Identifying Active Buyers and Passive Buyers
For Active Buyers
LotLinx uses demand-side data to identify in-market buyers actively shopping for vehicles. This includes tracking shopping actions and intensity, such as frequent website visits, specific model searches, and engagement with promotional content. From analyzing this data, LotLinx can find buyers more likely to purchase sooner rather than later.
For Passive Buyers
Passive buyers, on the other hand, may show lower engagement levels and less frequent interactions with dealership content. Lotlinx can identify these buyers by monitoring lower activity metrics, such as low website visits and minimal interaction with marketing campaigns. This helps dealerships in identifying passive buyers and understanding which potential customers might need more nurturing and targeted follow-up.
3 Core Strategies to Engage Active Buyers
1. Digital Marketing
The contrast between active vs. passive buyers in dealerships shows how important it is to have targeted marketing strategies. With the data mentioned above, LotLinx enables dealerships to create customized marketing campaigns for active and passive buyers.
For active buyers, campaigns can focus on promotions, special offers, and urgent calls to action.
For passive buyers, the approach can be more educational and informative, providing valuable content to keep them engaged and gradually moving them down the sales funnel.
In a real case study, Lotlinx helped Lake Auto Group with a car dealership marketing strategy to engage active buyers. Using Lotlinx’s VIN-specific platform along with its Showroom mobile-optimization product, Lake Auto Group improved its online inventory listings.
This strategic enhancement attracted interested buyers and increased interaction with their listings. As a result, Lotlinx emerged as the group’s highest-converting source of traffic, achieving a 2.5% conversion rate. Aligning data-driven marketing for dealerships with Lotlinx streamlined customer engagement and sales while protecting profit margins by avoiding price cuts.
2. Optimizing Inventory Management
Lotlinx’s data also helps dealerships manage their inventory more intelligently by aligning it with buyer demand. Knowing which vehicles are attracting active buyers helps dealerships adjust their inventory to meet market needs so that popular models are readily available.
Lake Auto Group also benefited from better inventory management. Lotlinx’s capability to identify in-market buyers helped lower the average days the inventory spent on the lot from 35 to 24—a major 11-day decrease. This inventory turnover strategy ensured that popular models were readily available and allowed the dealerships to meet buyer demand. The dealerships successfully sustained high performance and realized substantial returns on their investments.
3. Customer Segmentation
Dealerships can maximize their targeting efforts by using customer segmentation in car sales. This involves dividing the customer base into groups based on various characteristics and behaviors, allowing dealerships to tailor their marketing strategies to engage with potential buyers.
The primary categories for segmentation typically include:
- Active customers: Characterized by recent and frequent interactions with the dealership
- Inactive customers: Who have had limited contact over an extended period
- Lost customers: Who were once patrons but have ceased visiting
- Conquest customers: Those who have yet to be converted but offer new market opportunities.
Segmentation is crucial for active buyers, as it allows dealerships to focus personalized marketing efforts on those most likely to convert. Knowing which platforms draw in active buyers is essential for getting the most out of your marketing budget. Lotlinx offers a complimentary VIN View Optimizer (VVO) report that gives dealerships a detailed look at how well their media strategies are working. With this report in hand, dealerships can make informed decisions on where to direct their marketing efforts so they can invest in the channels that most effectively engage and convert active buyers.
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