It’s easy to wonder how (and if) the latest auto industry buzzwords will affect your business, especially after the last few years that came along with an abundance of rapid changes, pivots and firsts for almost all of us.
However, don’t expect any of these words that generated buzz to fade anytime soon as we step into 2024. Several of those trending words demand a dealer’s attention to make shifts now in how they’ll create opportunities to win customers, influence brand awareness and gain market share in the coming year.
So to help you gain a deeper understanding of what the Top 10 Automotive Industry Buzzwords are, and what they truly mean to a dealer’s business success, we asked expert Jade Terreberry, Senior Director of Strategic Planning at Autotrader and Kelley Blue Book to map out ten that should be on your radar in 2024, as well as the steps she recommends to incorporate them into your plans and strategies to drive more business.
Buzzword #1: CDP (Customer Data Platform)
The hottest acronym from the automotive industry last year, think of a CDP as one view of your customer that tells you what they’re doing, how they’re doing it and should steer your actions, marketing, and timeline to provide a personalized experience.
Actions to Take in 2024:
- Turn your CDP data and information into actions – that’s where the goldmine is.
- Connect the dots inside your dealership with your sales and ops teams – use your CDP to personalize the customer experience.
- Once your CDP has sifted through consumer, vehicle and F & I data – get a deep understanding of the lifetime value of your consumers.
Buzzword #2: AI (Artificial Intelligence)
There are so many ways to use AI, but dealers should think about how it’s being used today across your vendor partners. AI leads to big data, which can help you create more relevant experiences and gain more connectivity to existing and ideal consumers.
Actions to Take in 2024:
- AI can help you with the end goal – to get the right car, in front of the right buyer, at the right time… in the right WAY!
- Use AI or your vendor’s AI data to serve personalized messaging – focus on the call to action you want them to take.
- Retargeting continues to drive brand awareness and profits – AI can help you with this.
Buzzword #3: Virtual and Physical Lot
For years you’ve heard about your virtual and physical lot. And in today’s times with consumers shopping both online and in-store, and often times back online again… what’s happening on your virtual lot is a direct indicator of what’s happening on your physical lot.
Actions to Take in 2024:
- Make it seamless for the consumer – enable your team members to connect the deal in real time both virtually as well as physically.
- Merchandise cars that are headed your way – especially if it’s a vehicle that will sell quickly.
- Follow the formula of trust, triangulation and then transfer – build the trust, collect the information, personalize and connect your experience both online and in-store to drive profits.
Buzzword #4: Extended Loan Terms
With heightened interest rates and affordability being hurdles for today’s auto-shoppers, automotive loan terms have now extended past traditional norms into the 84- and 96-month range. In 2023 the average new-car loan term was 69 mo. and used-car loan was 67 mo.
Actions to Take in 2024:
- Understand the goal and keep a consumer’s best interests in mind – explain the pros and cons of extended loan terms so that expectations have been set and it’s clear what your customer is stepping into.
- Forecast and shift expectations and actions by modeling out revenue streams with your sales, F&I and service teams – remember the perfect storm is being set between lenders, your inventory and your customers’ typical patterns on extended terms.
- Adjust and personalize your communications and cadence – the 72-to-90-mo. loan term customer will have a distinct timeline, equity situation and needs that call for being pro-active in customizing and strategizing your touch points and conversations differently.
Buzzword #5: CPO (Certified Pre-Owned)
In looking at the big picture of the financial efficiency of your organization to keep consumers coming back, you should be focused on CPO vehicles. They provide many protections from a consumer sentiment perspective, as well as consumer brand loyalty, retention and fixed ops perspective.
Actions to Take in 2024:
- Have a weekly meeting with your Used Car Manager on CPOs – discuss how many are currently, in the process of, and are capable of being certified in your current and incoming inventory.
- Determine your true cost to certify a vehicle and lifetime value predictor of your CPO customer – include upfront costs, profitability margins of CPO vs. Non-CPO, short-term and long-term revenue derived from a lifetime value client perspective.
- OEMs are leaning into CPOs – be sure to check if yours are offering incentives or co-op dollars to certify that you might not be taking full advantage of.
Buzzword #6: Hybrid Retailing
It’s essential to have a seamless experience both online and offline. Every piece of a consumer’s information, no matter how they entered your ecosystem, should bridge to give you a singular consumer profile. This keeps the deal moving and improves the consumer’s experience.
Actions to Take in 2024:
- Ensure your teams are connecting the dots both online and offline – train them how to access information already collected and how to pick up where the consumer left off.
- Plan for the fully automated future of ecommerce – it’s not a light switch, so make your 5 or 10 yr business plan on how you’ll move in that direction step by step.
- Test your online to offline experience – be sure the entire team is clear on how to keep the deal moving no matter how or where the consumer chooses to complete the deal.
Buzzword #7: Distance Retailing
One of the areas where you can find the most immediate incrementality for your business from a variable ops perspective is distance retailing. Selling outside your market is now possible with consumers increasingly expanding their search radius to get the right car at the right price.
Actions to Take in 2024:
- Consumers what a car with the packages, trim and pricing and are willing to travel for it – ensure you have a plan and the right people (ex. drivers) to capture those out of radius shoppers with delivery and a seamless online experience.
- The total addressable market in your own backyard for you to gain or retain service and fixed ops business has expanded – consumers who bought outside of market are there for you to capture or recapture.
- Test a few deals to target an extended radius if you’re not currently doing this – give a 30 day trial to measure how it changes or will change your business for incremental revenue growth.
Buzzword #8: Revenue Stream Shifts
What revenue has looked like for the last few years is going to be very different going forward. Strategize for growth and shift based on how and where your revenue is coming in from today in each of your departments, and forecast based on increased use of technology.
Actions to Take in 2024:
- Get a clear picture of what your existing revenue streams are – this will change monthly and give you a clear indicator of where you’re winning and where you need to improve.
- Plan for the foreseeable value and equity situation – with extended loan terms and increased car values we’ve seen, how this will affect your business (and your customers!) for the next 5 – 9 years and how will you overcome this challenge.
- Break your new, used and CPO sales and revenue down monthly – understand the different age groups or types of cars that are truly driving your sales and revenue.
Buzzword #9: OEM Direct to Consumer
It’s clear that you’re the expert for the OEM. Sure, there will be specific lines, makes or models OEMs will build and release for an automated channel because it helps with allocation and efficiency. But there’s still a big role for the dealership and revenue streams that you’ve likely never had before to capture as ecommerce expands.
Actions to Take in 2024:
- Get a bigger understanding of how your OEM is forward thinking – once you know this, strategize how your role plays within and alongside it to maximize potential.
- Strive to be the partner of choice – develop frequent and consistent messaging to your team on what makes you, and will continue to make you the premiere partner alongside your OEM
- OEM certifications make you a gold standard – expand your expert and master technicians, as well as your certified salespeople that are critical to your brand.
Buzzword #10: New Roles within Modern Dealerships
One of the most important things to plan for as your dealership moves forward is making sure you have team members who are focused on user experience, consumer experiences, hybrid and distance retailing and eCommerce. Understand and plan how those roles currently do and will fit into your dealership as technology and eCommerce experiences and demands grow.
Actions to Take in 2024:
- Align and set pay plans clearly based on goals and priorities – bring and buy your entire staff into a clear direction you’re headed towards and changes you’ll make together.
- Connect streams of business, roles and accountability for eCommerce and in-store sales – makes sure there is a clear understanding that it’s not a me vs. them mentality when it comes to inventory and that the bottom line and customer satisfaction is a unified goal.
- Train and recruit the right people for the right roles – these new roles call for specialization to fast-track successful outcomes.
For the road forward
Your recommendation is to take three of the buzzwords above each day and spend about 10 minutes planning and strategizing around them – you must plan your work and you must work your plan. And whether that’s meeting with your teams and holding them accountable for the steps and actions you’ve mapped out, or seeing where you’re stacking up against the measurements you’ve set, these buzzwords can help you both grow and revolutionize how you do business both now, and well into the future.
Autotrader provides you with qualified leads for people who want cars. We have the data that connects and activates your data, and we have the shoppers. Driving quality leads that have the highest gross profit on average industry wide, we’re here for The Deal Doers.
Cox Automotive has the most connected and comprehensive view of the automotive industry and offers unmatched data and insights into consumer behavior, automotive trends and operational best practices. Whatever your goals, we can help you get there faster to stay a step ahead and successful in today’s marketplace.
Would you like access to all of the buzzwords above and actions to take mapped out in an easy-to-read and share format? Find it on the new infographic.