Much like the printing press during the European Renaissance, the Internet has transformed the way we interact forever. “Googling” is now a verb synonymous with getting answers, we can communicate with people across the world in a matter of seconds and we can buy things without leaving the house.
It’s a fast-moving, interactive digital world, and dealers face the real challenge of engaging and connecting successfully with car buyers through new channels.
When AutoSuccess published its first issue back in 2001, it was a different world than the one dealers face today. Thanks to the Internet and other technology, dealers and GMs have more opportunities than ever before to reach current and potential customers. While they’re commonplace terms now, concepts such as “texting,” “social media,” “online reputation management” and “video chat” were bleeding-edge marketing ideas back then — if they existed at all. Facebook, for example, wasn’t founded until 2004, and didn’t find mainstream usage until a few years later.
With these opportunities, however, come challenges, and one of the biggest challenges dealerships face today is simply keeping up with consumer desires and demands. Research tells us that customers visited five dealerships in 2005; now, they do their research online and generally buy from the first dealership they decide to visit.
Sometimes, activities seem to move along better where a nudge (noodge) is at work. A nudge pushes you to do your work, cut the grass (now) and get to the gym. Dealership performance motivator Tommy Gibbs says dealerships need a nudge, too, especially if improving used car profits is the end game.
The Free Dictionary reminds us a nudge is someone who:
• Pushes or pokes gently to jog another’s attention
• Gives reminders or encouragement
Gibbs calls this individual a “chaser” — they do the same job.
If you spent any time walking the floor at NADA this year, you couldn’t miss every DMS and CRM company pushing their new version of “data analytics” on dealers. The reason dealers are seeing this push to use “Big Data” is because every other industry has been leveraging data for years. It’s not about fancy dashboards; it’s about making better decisions.
How do you think Wal-Mart decides to build a new store? They don’t just toss a dart at the map. They use data to analyze population projections, proximity to existing stores, property value, competition and a laundry list of other data points that make sure each store is successful.
With dealership margins shrinking as quickly as sales are slowing, you’ll have to get creative if you want to stay profitable this year. Fortunately, the best way to grow revenue during a sales slump doesn’t require nearly as much effort or expense as new customer acquisition. Plus, it uses tools that you’ve already got at your disposal.
The best way to grow revenue in 2017 is to focus on the customers you already have. It’s not only 50 percent easier to sell to an existing customer than it is to acquire a new one — it’s also six to seven times less expensive. The key is to connect with customers in meaningful ways — ways that offer them value while keeping you top of mind.
“Hey Siri, where can I get an oil change?”
This type of search takes place more than a million times per month. In fact, according to Google Automotive Insights, service- and parts-related searches have increased by more than 400 percent over the past five years and now account for 28 percent of the total automotive search market. With all this consumer demand for service, you’d assume that dealerships are building a direct pipeline between their marketing budgets and fixed ops marketing strategies, but that’s a far cry from reality.
There are several benefits to working in the car business. We get to meet lifelong friends, we are taught life lessons and we learn what true leadership is — and isn’t. After working in several dealerships, I have seen firsthand some of the worst managers and some of the best leaders. There is a big difference between “leaders” and “managers.” I believe anyone at a dealership can be leader; unfortunately, the same can be said about managers.
A lot of the time, managers are simply the salespeople who have lasted. Year after year, people quit and get fired. Eventually, poorly run dealerships just hire out of necessity. They look to the person who has dodged various bullets and made it through all the firings and cutbacks. This person might be a mediocre salesperson, but stays out of trouble. These are the people we all look at and understand that they are in the position because they’ve been there the longest.
You’ve heard all the arguments. You’ve probably even joined in at times.
Customer data is too overwhelming. It’s complicated. It’s too confusing, time-consuming and expensive.
If you’ve been a little hesitant to dive headfirst into piles of data, you’re not alone. Many dealership professionals see data as a frenemy — both friend and enemy. It all depends on the perceived level of complication and how that balances with the benefits they’ll gain in shopper insights, increased sales and happier customers. Most dealers know data will help them get to know their customers and better understand their needs but, without a strategy, data seems daunting.
As we move toward the end of the first quarter of 2017, we continue to see a SAAR pressing more than 17 million units. The OEMs are geared to produce the volumes, the incentives continue to maintain sales momentum and leasing makes up about 30 percent of all retail transactions across the U.S.
While the OEMs have curtailed their fleet sales, they and their respective captives have seen their leasing portfolios grow significantly. The consumer has been able to leverage more vehicle as the “logic” of leasing plays well to the consumer who chooses to minimize capital placed into a depreciating asset. The OEM and their captives have used leasing as a subtle approach to incentives — delaying the impact on vehicle residuals until the lease comes to maturity.
The Internet has certainly revolutionized our industry and, for the most part, that revolution has been a positive one. But with so much information available to consumers, who now spend an average of 17 hours online visiting dozens of Websites to research their next vehicle purchase (known as the “Merry-Go-Round” effect), the Information Age has actually become the Indecision Age.
Studies have found that today’s car buyers are influenced by a staggering 24 different touchpoints along their journey to purchase (19 of which are digital). These include Google search results, OEM Websites, third-party sites, brand social media pages, dealer Websites, YouTube videos and more. Dealership visits have declined to an average of one to two visits today, versus five in 2005, and nearly 50 percent of consumers do not purchase the car they originally had in mind.