ATLANTA -

It’s not just about reaching the most consumers. Sometimes, it can be just as beneficial — if not more — to tap into what’s important for a specific niche of clientele.

In other words, “clients that are the most profitable for you,” says Cox Automotive Media Group president Jared Rowe.

“Maybe, again, you don’t want to sell a car to everyone; maybe you want to sell a certain kind of car a certain kind of way to a certain kind of clientele,” Rowe said in a phone interview with Auto Remarketing earlier this month.

“This is kind of the foundation on which the retail environment is built, in particular on the used-car side and in particular on the independents’ side. These are folks who have found unique niches in the market and unique segments, and they service it very well,” he said. “We also see it on the franchised side.”

Reaching that buyer niche requires some differentiation, a major theme of the comprehensive data set from the company that Rowe discussed on the call. The data, in a nutshell, explains how dealers can set themselves apart and the statistical benefits of doing so.

As part of its study, Cox Automotive Media Group evaluated more than 60 differentiators a dealer might use to set itself apart — things like transparent pricing, the ability to finish paperwork online or offering a free extended warranty — to gauge how important each one is to building confidence in a vehicle purchase.

Two of the five top findings from the study point out the importance of using differentiators to carve out a niche, as listed below:

  • While the top differentiators are relatively consistent for most consumers, certain demographic and shopping persona subgroups show strong propensities for a variety of differentiators beyond the most commons ones.
     
  • Increasing reach alone may not produce the best results. It may be better for some dealers to decrease their reach overall in favor of reaching more of the right audience.

It may be true that the further a dealer differentiates itself, the better the store is able to fit into a niche.

But dealers also should think about this, Rowe said: “Can you be great at 10 things? And if the answer is no, but you can be great at three things, pick the right three things. Pick the three things that are optimized to how you want to do business.”

You might be able to be top-notch when it comes to every single differentiator, “but you could be good at a few things, so let’s make certain we’re focused on the right ones that help you realize your desired business outcome as a retailer.”

So, what might be some of the differentiators best suited for the used-car side, specifically?

The ones that deal with “peace-of-mind around the transaction,” Rowe explained.

Beyond the five differentiators that were consistently important across all buyer groups — low-price guarantee, free extended warranty, free maintenance service with purchase, competitor price match and offering a relaxed, pressure-free experience — the differentiators that are more important for used-car buyers than new or new/used combined are the following:
 

  • Used inventory has in-depth reconditioning
  • Exchange or return policy/money-back guarantee

“On the new-car side, consumers are really focused on the process and the experience more than anything else,” Rowe said. “They want to make certain that it’s a fair price, a transparent price, and they want to get in and out quickly.

“The difference on the used-car side, and this makes perfect sense because it’s the nature of used cars, is they’re more focused on … ‘OK, do I have peace-of-mind around the transaction?’ Money-back guarantee, reconditioning process, these sorts of things,” he said.

“Which again make perfect sense,” Rowe added, “because from a used-car perspective, I’ve got two big questions I want answered: Is it a good car? And is it a fair price?”