To sell more cars, you need to look into the mind of the buyer. The many colorful shopper personalities wants, and needs should directly influence how you market.
Especially since marketing is shifting to be more in favor of data, understanding the demographics of your customer base allows you to create targeted campaigns that resonate with different segments of your audience and boost dealership sales.
The What and Why of Audience Segmentation
Audience segmentation involves dividing your target market into smaller groups based on shared characteristics, interests, and behaviors. This helps craft marketing messages that are more personalized and relevant to each group, resulting in better engagement and conversion rates.
For example, families might be drawn to safety features and more cargo space, while young professionals might want advanced infotainment systems and sleek design. By understanding and categorizing customers accurately, dealerships can engage in efficient targeted advertising while complying with updated privacy practices and state law requirements.
Quick Demographic Stats
MarketWatch data reports:
- Montana leads nationally in car ownership with 2,500 vehicles per 1,000 licensed drivers.
- Female drivers in the U.S. now exceed male drivers, accounting for 50.6%.
- California has the highest concentration of EVs: 232 per 10,000 people.
- Toyota is the best-selling brand in 2023; the Tesla Model Y is the top electric car.
- Average car ownership costs $9,282 annually due to insurance, maintenance, and fuel.
- New car prices average $47,244; used cars average $25,151, with a 5.4% price drop since December 2021.
- Detroit tops the list for car ownership costs, unlike more affordable Vermont.
- The average American vehicle is 12.2 years old; EVs are 3.8 years old.
Customer Demographic Segments
Performance Enthusiasts
This segment is characterized by their love for speed, power, and an exhilarating driving experience.
- Values and Priorities: They prioritize dynamic performance capabilities over other factors like fuel efficiency or practicality.
- Vehicle Preferences: Sports cars, high-performance sedans, and performance-enhanced variants. Examples include Porsche 911, Chevrolet Corvette, and BMW M series.
Eco-Friendly Drivers
These consumers are committed to sustainability and environmentally friendly practices.
- Values and Priorities: They want to minimize their ecological impact and look for vehicles with low emissions and improved fuel efficiency.
- Vehicle Preferences: Electric vehicles (EVs) and hybrids like the Tesla Model 3, Nissan Leaf, and Toyota Prius.
Family-Centric Consumers
They prioritize safety, practicality, and spaciousness.
- Values and Priorities: Safety and comfort for family members, with a focus on reliability and convenience.
- Vehicle Preferences: SUVs, minivans, and crossovers with advanced safety features and spacious interiors.
Luxury Consumers
People seeking sophisticated and high-end features, prestige, and a superior driving experience.
- Values and Priorities: Elegance, quality, and exceptional performance.
- Vehicle Preferences: High-end sedans, SUVs, and sports cars from brands like Mercedes-Benz, BMW, and Audi.
Digital Trendsetters
Early adopters of new technology who prioritize advanced connectivity and innovative systems.
Values and Priorities: Seamless integration with digital lifestyles and high-tech driving experiences.
- Vehicle Preferences: Vehicles with state-of-the-art infotainment systems and advanced driver-assistance capabilities, including EVs and hybrids.
Value Buyers
Practical and cost-conscious, they focus on long-term savings and low maintenance costs.
- Values and Priorities: Affordability, fuel efficiency, and minimal maintenance costs.
- Vehicle Preferences: Compact cars, hatchbacks, and small SUVs.
Off-Road Drivers
Passionate adventurers who want durable vehicles with exceptional off-road capabilities.
- Values and Priorities: Performance, durability, and versatility for navigating rugged terrains.
- Vehicle Preferences: Vehicles with 4×4 capabilities, like Jeep Wrangler, Toyota 4Runner, and Ford F-150 Raptor.
Fleet Consumers
Businesses and organizations that need fleets for operational efficiency.
- Values and Priorities: Reliability, cost-efficiency, and functionality.
- Vehicle Preferences: Sedans, vans, and trucks tailored to specific industrial needs.
City Commuters
Urban drivers on busy city streets need compact and fuel-efficient vehicles.
- Values and Priorities: Practicality, fuel efficiency, and convenience for urban mobility.
- Vehicle Preferences: Compact cars and hatchbacks like the Honda Civic, Toyota Corolla, and Volkswagen Golf.
Check the Psychographics
Psychographic segmentation goes beyond customer demographics to consider lifestyle, interests, and values. For example:
- Performance Enthusiasts: Performance enthusiasts often follow automotive sports and tend to value brands with a strong motorsport heritage.
- Young Professionals: Young professionals prefer trendy, tech-savvy vehicles with the latest connectivity features to match their fast-paced lifestyle.
- Budget-Conscious Consumers: Budget-conscious consumers actively participate in online forums or communities to share tips on getting the best value for their money.
Behavioral Insights
Analyzing past behavior provides insights into customer preferences and future purchasing intents. Customers who have previously interacted with your dealership or shown interest in specific models can be targeted with personalized offers and incentives to encourage repeat purchases. Targets include:
- Loyal Customers: Offer exclusive deals and loyalty rewards to customers who have purchased from your dealership before.
- In-Market Shoppers: Focus on prospects who have recently visited your website or engaged with your marketing materials, targeting them with timely promotions and relevant information.
Purchase Intent and Buying Journey
Knowing where a customer is in their purchasing journey allows for more effective targeting and an increase in car sales. Early-stage shoppers need educational content, while those ready to buy may respond better to promotions and incentives.
Steps to Effective Audience Segmentation
- Data Collection: Gather a wide range of data, including customer demographic details, purchase history, and online behavior.
- Segmentation Criteria: Define the segments based on important criteria relevant to your market.
- Create Personas: Develop detailed buyer personas for each segment to humanize the data.
- Tailor Content and Campaigns: Design marketing messages that resonate with each segment.
- Test and Refine: Continuously monitor and adjust campaigns based on performance metrics.
- Automation: Utilize marketing automation tools to streamline and manage your segmentation efforts.
Harness the Power of Consumer Demand
For over a decade, Lotlinx has forged a refined understanding of consumer demand. We know exactly who is shopping for and buying each specific VIN and which media channels they use at every stage of their journey.
With our advanced vehicle inventory management platform, you gain deep insights into buyer demand, inventory trends, pricing strategies, and promotional performance. Tracking your target demographic allows you to connect with your buyers and position your dealership perfectly in the market. Price and promote the right vehicles to the right customers at all times. Contact us today to understand consumer demand within your trading areas and learn how to align this insight with your current inventory and future vehicle acquisitions.