By Troy Scheer, CMO, Binary Automotive Solutions
Invest in your brand when it’s sunny to stand strong when the storms hit
Whether you consider it a matter of physics or a business reality, what goes up will come down (and bounce back up again before you know it).
In March and April of 2020, average sales volumes for car dealers across the U.S. and Europe were down anywhere from 40% to 85%. It was the worst sales slump in recent history. In extreme cases, showrooms were closed, and employees furloughed.
April of 2021, a year later, gave the industry an entirely different picture. New-vehicle retail sales for April 2021 were expected to be the highest ever recorded for that month–despite low inventory–according to a joint forecast from J.D. Power and LMC Automotive. And they were.
Which begs the question. How can your dealership avoid suffering financial or emotional whiplash in the face of such volatility?
The answer is simple: your brand.
Sunshine one day, flooding the next
Let me pose the question another way. It’s sunny now, but is your ark ready for the coming flood? Have you battened down the hatches and shored up weak spots? Or, are you just going to wait and be the third monkey trying to get on the ark as the door is closing?
Granted, front-end grosses are currently high, even with lower available inventory. But we all know it won’t stay that way forever. And when it changes, your dealership must be ready to pivot.
As an example, when the pandemic struck, one dealership developed a two-prong sales approach. They instituted an ABC (Always Be Closing) process for customers at the low-end of the sales funnel; and for customers further up the funnel, they focused on a long-tail marketing vision, building their brand to last.
There’s that word again. Brand. More than a logo or an ad campaign, “brand” consists of your people, culture, marketing, and customer experience.
The perfect time to invest in the training and development of your team is when business dips and sales get harder. This also happens to be when your employees feel the most vulnerable. The good news is you can turn their anxiety around and make them feel safe by investing in their professional growth.
For example, train them to meet your customers anywhere in the sales cycle, whether that’s service or sales, fixed or variable, online or in the store. Teach them how to interact with the customer to build a value-based relationship, instead of getting stuck on price.
Make sure even the people at the bottom of your org chart know and understand your brand as well as those at the top. Equip your people with better processes and technology to help them succeed in today’s Omnichannel environment.
Branding is a journey, not a destination, and doesn’t happen overnight. In my experience, branding and culture are two sides of the same coin; they go hand in hand. Branding is how others see your dealership while culture is how your employees experience it.
If your dealership’s culture, for instance, is to create lifetime customers instead of transactional customers, you will need to invest in employee training and development. They will need to learn how to move the conversation from lowest-price to best-value.
Customers want to feel secure in their purchase, regardless of price. A proven way to give them peace of mind is by offering a lifetime warranty, a level of security factory warranties can’t match. Consider offering free lifetime oil changes, as well.
Above all, let customers know you are on their side. Establish a culture that puts the customer first and make sure everyone in your store understands how to make it happen. Don’t just communicate, over communicate.
Just as a downturn in the economy is the best time to shore up your training, it is also the best time to keep up your marketing efforts–and the worst time to go dark.
The market is full of companies who lost high ground when they cut back on marketing. Take, for instance, how Pepsi-Cola and Coca-Cola responded to COVID. The former doubled down on their brand marketing and the latter reduced their marketing. The result? Pepsi-Cola (Procter & Gamble) saw their market share increase while Coca-Cola lost revenue, year over year.
Instead of cutting back, become more strategic in your marketing. Work closely with your vendors, hold them accountable, ask questions and look for efficiencies.
When the going gets tough, smart marketers keep going.
Today’s consumers, especially millennials, would rather enjoy a frictionless experience than be sold a cheaper product. One way to show them value is to invest in your customer loyalty program. And don’t forget to promote the market differentiators in your service department Think of creative ways to save customers time like a specific lane for quick services like oil changes. Maybe think about creating a mobile service team that go to the customer. You can save the customer time, generate brand loyalty, and use that dealership-branded service truck to create awareness for your unique service..
Show consumers how you make the buying process easier, such as through your digital retailing tools. Your goal is to let them know your dealership is on their side and values their time.
Riding high in April, shot down in May
After the Great Recession of 2008, retail automotive came roaring back. Then the unexpected Covid-19 pandemic took us down the rabbit hole again.
Amid this rollercoaster ride of uncertainty, your brand is your rock, your superpower. Invest in it but be patient. Slow and steady wins the customer relationship and business.
And don’t forget to have that ark seaworthy before the next storm.
About the Author
Troy Scheer is the CMO of Binary Automotive Solutions, a leading provider of customized Lifetime Warranty programs designed to help dealerships sell more vehicles.