As a new decade begins, there are many bright spots on the horizon for used car dealerships. We’ve compiled a few thoughts and observations we wanted to share.
How Franchise Brands are Leading the Way
More Americans than ever prefer to buy used cars rather than new — two thirds, in fact. It’s no wonder why: new cars often come with inflated price tags, while vehicles that are only a few years old are much more affordable and likely have plenty of use left. When it comes to buying a used car, there is no shortage of options available: a drive down virtually any major American street reveals numerous used car dealerships for customers to choose from.
Increasingly, they’re choosing to buy from franchised dealerships rather than individuals or independently owned lots. Why this shift toward larger chains? It’s difficult to say exactly, but the credibility and brand recognition behind national brands could be the reason. When buying from a franchised dealer, it’s easy to identify other customers across the country who have had positive experiences, while local dealerships don’t typically have the same scope. Furthermore, larger brands are often more transparent with their policies, which can often feel arcane and difficult to decipher at smaller dealerships.
The Training That Matters Most
Regardless of the type of dealership, great sales and training policies can help customers build trust and form lasting relationships. For instance, helping sales staff build up a strong knowledge base about the car makes and models they sell is a great way to establish a dealership as a trustworthy source of information in a community. High-pressure sales tactics that put the transaction first and customer satisfaction last are a thing of the past in our industry: more dealerships recognize the value of repeat business.
Today’s Marketing Trends
Used car dealers are increasingly recognizing digital marketing as an effective way to find their ideal customer. Inbound digital marketing is better able to find ideal customers that are in the market for a used car by tapping into their internet searches, browsing habits and so forth.
Once customers are exposed to an ad, what kind of content is most effective? In 2019 a number of trends emerged. For one thing, Google is putting more emphasis on “micro-moments” in the buyer’s journey. Advertisements that loop into specific decisions in the process (“Is this right for me? Can I afford this?”) are likely to make an impact.
Another digital marketing trend of 2019 was proactive review management. Every car dealer knows that having a negative review can do major damage to your reputation so some of them have turned to reputation management to highlight their positive customer experiences while de-emphasizing the negative. This is a valuable marketing service that dealerships large and small can benefit from.
Finally, we have observed the strong popularity of “buy here, pay here” services. Customers are able to complete their entire used car transaction working only with the dealership — no third-party financing required. These services allow “buy here, pay here” dealers to work with the customers they choose while opening their products and services up to demographics that have credit challenges.
These are just a few of the hot topics in the industry to keep in mind for 2020.