Automotive Digital Marketing

Professional Community for Car Dealers, Marketing, Advertising and Sales Leaders

Loading... Be Patient!

How to Win Cash Buyers’ Elusive Loyalty

Cash buyers are an important but often overlooked segment of customers who pose a significant risk to auto dealers and manufacturers if left unmanaged. In the first half of 2019, customers who purchased vehicles with cash accounted for 24% of all new vehicle sales. For some luxury brands, cash buyers are even more important since they can represent close to 40% of all new vehicle sales. However, their lack of loyalty to auto dealers often goes unnoticed, presenting a significant risk over time.

 

From a dealer’s perspective, cash buyers are composed of two distinct groups: customers who write a check with available cash on hand, and customers who financed their vehicle with a third-party. Since a dealer doesn’t have visibility into the personal finances of individual buyers, they can’t distinguish between the two groups and ultimately are forced to treat them the same. 

 

Based on Affinitiv’s analysis of over 200K vehicle purchases in 2018, we found cash buyers are unlikely to return to a dealer for service and are significantly less loyal than other buyers. In 2018, only 39% of cash buyers returned to a dealer for service in their first year of ownership, compared to 65% of lease buyers and 68% of loan buyers. Cash buyers are also less likely to repurchase at the same dealer. We found the 5-year repurchase rate was only 10% for cash buyers compared to 16% for loan customers.

 

Through our research we also identified unique behavior patterns of cash buyers, which create an opportunity for dealers to improve the relevance of their marketing and thereby win their loyalty.

 

We analyzed the results of Affinitiv’s national consumer study with 1,000 recent car buyers and found cash buyers are significantly more likely to choose an auto service provider due to convenience of location, the ability to get service without an appointment and speed of the service. As a result, dealers are more likely to convert cash buyers to service customers if they offer and promote express service and have extra capacity available for walk-ins.

 

Dealers need to re-evaluate their retention marketing programs and ensure they deliver relevant messaging to cash buyers. By offering express service and promoting no-appointment service visits, dealers can dramatically improve the number of cash buyers who return for service and increase the likelihood of customers purchasing another vehicle at their dealership.

Views: 26

Tags: Affinitiv, automotive, buyer, car, cash, dealership, marketing, profit, revenue, sales, More…service, shopper

Comment

Oops... You need to stop "Lurking" on ADM and become a more genuine Automotive Professional by completing your membership registration. As a registered ADM Member, you can post comments, publish your own articles (be a star!) and start Forum discussions. Stop being an online "Peeping Tom" and JOIN ADM RIGHT NOW!

Join Automotive Digital Marketing

Automotive Professional Network and Resource Exchange for Car Dealers, Managers, OEM and Marketing Practitioners seeking Best Practices.

ADM Sponsor

Please Consider Automotive Marketing Professional Community Sponsors

ADM Badge

Loading…

Based On Your Interests...

ADM Consulting, LLC

Onsite/Offsite Combination ADM Consulting, LLC Professional Services
Select the maximum monthly investment you plan to make
$USD
Sign up for

Automotive Marketing Tools

Get ADM Toolbar

Click here to take the ADM Member Survey

Getting too many emails from ADM? Click mailbox below to control which types of alerts and updates you are sent......


Instagram

Top Automotive Marketing Forum Discussions

Share the Best Content w/AutoMarketing Community

© 2020   Created by Ralph Paglia.   Powered by

ADM Badges  |  Report an Issue  |  Terms of Service