The past two years have been nothing short of interesting for automotive dealers—navigating factory shutdowns, showroom closures, re-openings, the uptick in digital retailing and online sales, not to mention, the shortage of semiconductor chips and subsequent lack of available inventory. The last event is perhaps the most notable; it’s leading some dealers to question whether or not to pull back on advertising spend in order to reduce costs and save on budget.
After all, is it worth advertising when you don’t have inventory to sell?
In short, the answer is yes. Advertising is much more than showcasing and selling a product today—It’s an opportunity to build a lifelong relationship and customer loyalty. Implementing a long-term marketing strategy can help keep your dealership top of mind and maintain brand recognition and exposure for years to come.
Have a plan
Now, I’m not suggesting that dealers should continue advertising to the masses. You need to be more strategic. Find the vehicle shoppers who are in-market for their next car or truck. Identifying the consumers who are in-market will allow you to focus your advertising spend solely on those with a higher propensity to buy. For instance, who are the consumers nearing term on their lease? The end of the lease forces consumers to make their next car buying decision—turn in the vehicle or purchase it. While dealers communicate with their current off lease customers, they can also reach noncustomers too, through advanced data capabilities. This could potentially bring customers into their dealership from the competition. Other life events, such as buying a home, nearing retirement, or becoming an empty nester, could all be triggers for a vehicle shopper to re-enter the market.
While these triggers are critical to identifying in-market vehicle shoppers, you won’t be able to simply rely on your own CRM database. As the old adage goes, “you don’t know, what you don’t know.” Third-party data providers, such as Experian, can help you understand lifestyle and demographic information for consumers with a higher buying propensity and then find and reach these consumers through their preferred communications channels.
Foster the relationship
Once you’ve identified your audiences, your messages need to resonate with them. Let’s take the end-of-lease example. Since many consumers have an opportunity to purchase their lease at a fixed price (agreed upon at the signing of the lease), the sudden increase in vehicle values play to their benefit. Some might be compelled to purchase their vehicle outright and sell their vehicle to the dealer with the highest trade-in offer.
Now is the time to engage your customers who are nearing their end of the lease and discuss recommended trade-in options. Perhaps there’s an opportunity for the customer to upgrade to a model with more features or one in a different class. Connecting with your customers upfront will increase the likelihood of the customer remaining loyal and trading in the vehicle to your dealership.
Another example could be a vehicle shopper who isn’t interested in any of the vehicles you have on the lot. Instead of focusing on the standard sign-and-drive approach, consider communications that center on pre-ordering a vehicle. This gives the shopper an opportunity to build a vehicle from the ground up, including color, technology, packages, etc.—an enticing option for those who can wait a few weeks or months. Not only are you creating a pipeline of future revenue, but you’re also creating an experience for the vehicle shopper; one that will likely stick with them into the future.
Advertising and marketing are about more than selling vehicles, they’re about catering to your audiences’ needs. Pausing your advertising and marketing campaigns might help your budget in the short term, however you might lose ground to your competitors down the road. Despite inventory shortages, you have an opportunity to build your brand and establish a connection with your customers. Be top of mind.
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