2023 Wrapped Up and 2024 Predictions

Published: January 2024

As one year draws to a close and we welcome 2024, it is a time for many to reflect on the learnings of 2023 and optimise processes in anticipation of a busy year ahead. Here are our key takeaways from 2023 and predictions for 2024…

EV sales prove an ongoing challenge

While many businesses and fleets embraced the shift to vehicle electrification during 2023, retail buyers have been harder to persuade. By the end of November, BEV new car registrations in 2023 had increased 27.5% over the previous, but much of this was attributable to the fleet market. The decision by the UK government to delay the ban on sales of new internal combustion engine (ICE) vehicles to 2035 is likely to have prompted many private buyers to further postpone EV purchases.

The delay may be a blessing in disguise for the motor trade, giving retailers an opportunity to educate and inform customers about EV ownership while also affording new OEMs the time to establish themselves and build trust. Education is the biggest difference when it comes to marketing EVs, so it is essential to pre-empt potential concerns by ensuring the right information is readily available. We know the purchase cycle for an EV is longer than for an ICE vehicle – many buyers seek information about the whole ownership experience and will need reassurance about fundamental considerations such as battery range and charge time, as well as available variants, options and incentives. All of this needs to be reflected in EV-specific contact strategies during the pre- and post-enquiry stages.

New converts to electric mobility may also be uncertain of the aftersales requirements of an EV. Effective aftersales marketing can address this knowledge gap by outlining service plans and pricing early so the customer knows what to expect; this may help facilitate the sale and boost long-term retention.

The importance of data quality

Our research of retailers across the UK indicates that, on average, 27.7% of ‘keeper details’ are inaccurate, with vehicles having either changed ownership (26.3%), been scrapped (1%) or stolen (0.4%).

One of our retailer clients that saw the benefit of addressing this data challenge was Rossetts Commercials, a Mercedes-Benz commercial vehicle dealer operating in Surrey and Sussex. The group engaged with us in May to evaluate its customer database; a process that established approximately 30% of records – relating to over 21,000 vehicles – needed to be updated.

Manually processing this volume of records would have taken one member of the Rossetts team around 1,050 hours, approximately seven months of work, but we were able to automate the entire process. Our system cross-checked Rossetts’ customer records against the DVLA database and other data sources to identify relevant changes in ownership status. And, as we are a member of the Keyloop Partner Programme, we could feed any amendments directly back into Rossetts’ dealer management system (DMS).

The rise of the agency model

Throughout 2023, we worked with Mercedes-Benz agency retailer, Sandown to further refine its customer relationship management strategy as it adapts to the agency model. With the agency model on the rise, retailers that fall into this category must find new ways to evidence and promote customer satisfaction to improve retention and conversion rates. There are fewer opportunities for retailers to set themselves apart, and reputation will be a standout factor when a customer comes to purchase a vehicle.

Auto Trader recently shared what it believes to be the ‘secret sauce’ that makes retailers stand out from the rest. According to the online automotive marketplace, what sets retailers apart from the crowd is a friendly approach and rigorous effort to make the transaction as easy as possible for the customer – this applies equally to digital and physical interactions.

Our marketing automation platform, VoiceBox, helps retailers to add that ‘sauce’ and – crucially – do so at scale thanks to automation. It allows retailers to deliver friendly and professional customer communications to large volumes of prospects throughout the buying process, and then through the full ownership lifecycle.

Reviews prove critical for conversions

Data from Trustpilot’s ‘Digitising Commerce’ report suggests that 93% of consumers now read reviews before making a purchase. Building a bank of reviews is important too; Auto Trader found that 94% of consumers wanted to read reviews from the last 12 months, while 72% wanted access to reviews from the last three months.

Furthermore, the 2023 Consumer Attitude Survey from the NFDA revealed that 20% of consumers feel reviews are the most important thing when searching online for a vehicle dealer.

Each of these findings show the value of reviews to the online research phase before customers make a decision. One of our own recent surveys showed that 64% of consumers would conduct most of their research online, only visiting a showroom once they are ready to buy.

However, completing surveys can be laborious, and many customers simply avoid it. Therefore, we would always recommend that requests for reviews and CSI surveys be embedded into the CRM process creatively, as well as using automation to simplify and encourage the submission of reviews. Streamlining the process for customers can dramatically impact the volume of reviews created.

With the time between enquiry and sale having fallen over recent years to just five days, engaging with prospects during the ‘pre-enquiry’ phase is key, and nurturing leads is increasingly essential. VoiceBox can identify and cultivate leads from a very early stage in the process and, if a quick sale isn’t possible, keep prospects warm using automated tools to maintain interaction in a personalised and relevant way.

Stock Alerts, for example, sends an automated email to alert customers to stock that best matches their enquiry as it becomes available or when prices change. Our Stock Alerts convert at an average of 9%, in some cases outperforming the retailer’s website, and have helped retailers generate over £24 million in additional revenue in 2023 alone (based on an average PPU of £1,250).

Taking a multifaceted approach is important, so targeting customers via social media adverts with the help of our SocialStock solution means they are seeing available stock on another platform.

What does 2024 hold?

As we approach four years since the onset of new car supply issues triggered by the 2020 pandemic, many retailers will be contending with a lack of three- to five- year old cars coming back into the market. This could significantly impact auto retailers, so taking a different approach to stock sourcing and aftersales offerings could sustain income streams during 2024.

Our top tip would be to explore ways to bring aftersales customers back into the vehicle sales funnel. We already saw the impact of this in 2023. Looking at statistics from the Sandown Group, 55% of services due were on vehicles not originally sold by the Group, meaning aftersales offers a greater opportunity than simply focusing on sales renewal cycles.

We recommend that retailers include links to valuation tools in their service booking confirmations and reminders. Retailers can also offer valuations and test drives during the aftersales appointment itself. If customers are still not ready to change just yet, now is the time to look at more creative ways to secure their aftersales retention as their current vehicle ages, and to market these accordingly.

Taking the learnings from 2023 and applying them to the new year can boost success. Utilising accurate and up-to-date information, and harnessing an existing customer base can set a retailer apart from the rest and ultimately lead to enhanced revenues and loyalty in 2024.

To book a no-obligation demo of our VoiceBox platform, contact us today.

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