When the economy becomes unpredictable and consumers’ budgets tighten, how dealers position their pricing, service offerings, and customer experience can determine whether they pull ahead or fall behind. In today’s episode of CBT Now, Bill Harper, CEO and chief creative officer at BrandBossHQ, shares how dealers can sharpen their branding to retain customer trust and loyalty amid uncertainty.
Strategizing during an economic downturn
Harper believes that a company can employ two different playbooks during an economic downturn: an offensive play or a defensive strategy.
Playing offense: Economic pullbacks are excellent opportunities for growth-minded organizations to take a massive leap forward. It’s an ideal time for dealerships to put their foot on the gas and boost marketing efforts to gain more consumer visibility.
Defensive strategy: Organizations that prefer a safer approach can play defense by refocusing on core values. Resist the urge to slash prices dramatically or rely on promotions to secure sales. Instead, focus on value-driven messaging that highlights the benefits of the vehicle or service.
Addressing tariffs with customers
Harper advises against preemptively bringing up tariffs with customers. Instead, he recommends letting the customers raise the issue first. When they do, maintain a calm and measured stance to reassure the customer and avoid inciting feelings of fear.
If costs increase due to tariff impact, he recommends being transparent and keeping open lines of communication with the customers.
He demonstrates an example of a calm, measured response to a customer: “We’re trying to figure out right now, like so many other businesses, where things are going to land. We’ll keep open communication with you to ensure you know what we know as soon as we know it.”
Pricing strategies amid tariffs
Harper expresses that there is no universal solution to absorbing or passing on tariff costs. It is a highly nuanced situation. Dealers must carefully weigh the decision. Before adjusting pricing, he recommends dealers ask themselves the following questions:
- What relationship do I have with my target audience?
- How frequently do customers make a purchase?
- Can my business afford to absorb the price increases fully or even partially?
He highly recommends finding some way to work with the customers, even if it simply means meeting them in the middle. Companies that partially or fully absorb the tariffs can use their decision as leverage in a PR statement and advertising.
It is a strategic move that customers will remember and appreciate, and could successfully foster long-term loyalty.
The role of aspiration in branding
Luxury automotive brands such as Mercedes-Benz and Ferrari rely heavily on aspirational value. During an economic downturn, a prestige brand’s decision to hold or lower prices is a defining decision that will either reinforce the brand’s perceived value or cheapen it.
“A Ferrari is a Ferrari,” Harper explains, “And it isn’t a Ford.”
Brands that want to maintain prestige purposely inflate their pricing to create market scarcity. However, the consumers’ buying behavior ultimately dictates what brands can charge.
Harper’s final advice
Harper urges dealers to remain proactive and maintain transparency with their customers. Whether playing offense or defense, consistent branding and transparent customer communication are the keys to emerging stronger on the other side.
