In Luxury Auto, Dealers Must Be Data-driven

The dealership is no longer a consumer’s first stop when researching an auto purchase. While the test drive remains essential, most consumers begin their search online, drastically cutting down on the time they have historically spent looking around showrooms. All signs point to a period in time, not far off, where consumers can buy their cars online and then drive away with the cars without speaking to a salesperson.

As a result, dealers seemingly would have less power than ever when it comes to influencing a sale, and they certainly don’t want a world where they are inessential. For dealers to impact this trend, they must become more sophisticated in their approach, using data and insights to better understand the consumers that are walking into the showroom, and why those consumers likely responded to the manufacturer’s or dealer’s advertising messages. By adopting a data-driven, consumer-centric strategy, dealers can build relationships and help sow the seeds of long-lasting brand loyalty, especially among affluent consumers.



Alas, dealers are often at a disadvantage when it comes to data, especially compared to manufacturers. Auto brands, and their agencies, use lots of data to determine how and who to send direct mail offers to and where and when to run TV spots. Generally, luxury automakers are not blanketing the market with their message, but are instead making informed decisions on which areas have high concentrations of consumers who likely match the profile of a potential customer.

Dealerships are not located haphazardly. They’re often established in areas that also have a high concentration of consumers who meet certain qualifications. But dealers may not always have access to the same data that the manufacturer is using to market the cars. They may not know much about the income and financial profiles of consumers that were targeted, and how those profiles could impact leasing and buying decisions, or even if the consumers walking into the showroom meet the necessary financial profile.

Seeking to thrive, dealers need to bridge the gap, first by gaining more robust information about the consumer, and then making sure it’s embraced by everyone working in the showroom. A data-centered approach — where the dealer knows who receives marketing messages and why they might be entering the showroom — helps open the door for deeper relationships. For example, a dealer who is aware that a high number of families received the marketing message can better help customers identify the vehicle that best matches their needs. If dealers know that marketing efforts reached and drove a large number of affluent consumers into the dealership, they can possibly sell higher-value cars. If they know that consumers entering may not have as much spending capacity, they can be more respectful and offer multiple financing options.

This degree of understanding is important even if we never reach a point where a majority of consumers can easily buy cars online and drive them off the lot. Insights based on estimated consumer financial and behavioral data in the local market can lead to better understanding of potential customers. In some cases, this is the difference that could make the optimal and most successful sale for both the dealer and, ultimately, the consumer. A monthly payment that is $50 a month lower might not matter to some affluent consumers; instead, they may be focused on finding a connection to the car, and an informed dealer can help.

Consumer and marketing insights are an incredibly sophisticated operation, especially for a major purchase like a luxury vehicle. Manufacturers may find that their messages are reaching the right people, but if the team on the dealership sales floor doesn’t understand the consumer audience, they may not be able to make the sale. Dealers who can wield influence are good for manufacturers, and, believe it or not, consumers as well. For dealerships and sales teams to not only survive but remain a vital part of the sales process, they’ll need to acquire data insights to be better informed of their audience.

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