By Jade Terreberry, Director of Dealer Sales Analytics, Cox Automotive
The auto industry has seen a massive increase in demand over the past several months. With more consumers looking for vehicles, dealers need to be smart with how they acquire and sell off inventory to ensure that they remain in control while still providing car buyers with viable options for their needs. By utilizing data and creating an acquisition plan, dealers can effectively create demand and not only make sales but also increase trade-ins to optimize inventory.
Data is a powerful tool in understanding consumers, especially when their behavior is changing so rapidly and unpredictably. Reframing insights that are already available and analyzing these points in new ways is crucial in ensuring success in the current market. By utilizing data and understanding what consumers are looking for right now, dealers will gain control of the timing and success of purchases or trades.
Steering consumers to the right vehicles or information on trade-ins is no easy task. Dealers need an acquisition plan that assesses where they currently are to help them get where they want to be. A solid first step if for dealers to understand their sphere of influence. By getting a clear picture of who is already within the dealerships’ network, a plan can then be created to expand out and reach new potential customers. Adopting strategies like geographic farming, which is a long-standing cornerstone of real-estate marketing, and reimagining events that have been upended due to the pandemic are great ways to expand this sphere of influence and reach a greater amount of car buyers. Dealerships are also getting creative by hosting drive-through style buying events to encourage shoppers to sell or trade-in their vehicle while social distancing—and acquiring some great new inventory as a result.
Once dealers have a better idea of who they are reaching and how they can expand, it is their job to get in the driver’s seat and steer customers toward inventory. Dealers know how selling, trading, or buying could benefit local consumers right now, but they may not yet realize it. Using data and insights to understand what consumers are looking for will not only help potential car buyers recognize the new vehicle opportunities available to them, but it will also create a level of trust between the dealership and the customer. Car buying is contagious – even in a pandemic. Demand is driven by talking to potential customers brought in through events and word-of-mouth, getting to know their needs, and telling them exactly why now is the time to buy or trade-in.
Expanded reach and increased demand have undeniable benefits to dealerships. Capitalizing on opportunities outside of the dealers’ home market allows dealers to grow without having to acquire an additional lot. Competing in new and growing locations brings results. According to Cox Automotive data from 2020, those using market extension saw a 32% lift in leads, 56% lift in site links, and 29% lift in VDPs. Shoppers also benefit from more options and the convenience of a home delivery experience, so expanding a dealership’s reach is really a win-win for both sides.
The bottom line is this – dealers have control over the timing of vehicle purchases and trade-ins. Leveraging this control and using it to not only make sales, but also increase inventory, is the key to thriving in this new uncertain environment. Analyzing insights, creating an acquisition plan, and driving demand are the most important ways dealers can expand their reach and identify new customer bases.
About the Author
From sitting in my highchair watching my dad prepare for Honda’s National Walkaround competitions to being called “Parking Lot Princess” taking lot ups in rain and snow in Northeast Tennessee, to missing hundreds of dinners and holidays tied up in the finance box closing midnight deals, to now working with thousands of Autotrader dealers, I’ve been a “car-business person” my entire life.
Today, as I lead Sales Analytics under the Operations umbrella for our dealers at Autotrader, my goal is to help you reach your goals, even in tough times. So, what’s our goal as “car-business people”? Sell more cars, make more money and create more loyal, lifetime customers. COVID-19 hasn’t changed that, but it has made things incredibly tough. It has stretched us thinner than ever in so many areas – time, money, inventory, staff . . . Instead of wearing five hats, you now wear 10, and it feels harder and harder to prioritize what’s important.