Mark Twain’s adage of “if you don’t like the weather, wait a few minutes” rings true to the current state of tariffs in the automotive industry. On a seemingly daily basis, reports on new tariffs, subsequent pullbacks and the response from auto brands and suppliers is dizzying even for the most well-informed industry insiders. Imagine what the average car shopper is grappling with!
Thankfully, auto marketers have been battle tested recently between pivoting from pandemic response to the subsequent chip shortage and inventory crunch, followed by high inflation leading to the fastest rise of interest rates since the 1980’s and record vehicle prices…and now this. No rest for the wicked, indeed.
As we forge ahead into the newest challenge of communicating with car shoppers during yet another period of uncertainty, some tried and true marketing tactics complemented by recent advances in technology are the antidote for the headache of tariffs.
Shopper Segmentation
Understanding and leveraging the buyer stage of your potential customer will be vitally important over the next several months as the effects of tariffs begin to impact shopper’s wallets. Utilizing CRM or DMS data to segment current owners coming off lease or loan through a captive lender creates opportunities to communicate loyalty or friends and family pricing discounts to boost retention. To reach and influence non-owners of your brand, consider working with marketing partners that offer a breadth of options to identify shoppers at each stage of the purchase cycle, and segment them according to the signals they’re sending on how close to purchase they are.
Early signs of imminent shopping activity and opportunities for segmentation may include “near-market” triggers such as life stages like a new baby or recent move. While the first signs of shopping such as visiting 3rd party auto sites or OEM sites should receive segmentation of their own based on recency, perhaps in a bucket called “early stage in-market” where shopping interest spans 0-7 days. Segmentation by vehicle budget is also available should price outweigh any other factor for a buyer. These examples of segmentation allow for the next step in our process to take place, our CX and messaging strategy.
Customer Experience and Messaging
Using the examples of near-market and early stage in-market shoppers above, these are people that likely will require some education on the impact of tariffs on their upcoming purchase given the dynamic nature of these policies. Addressing these concerns upfront saves the inevitable questions that will arise around how much their sticker price will be affected, and what opportunities exist to mitigate them.
Once those initial concerns have been addressed, focus on long-term value over price. This is especially important for imported brands that will be subject to the heaviest tariffs, with quality, innovation, residual value and industry accolades key messaging strategies to employ to reframe the conversation. Marketers of EVs and hybrids can also add the savings on fuel and maintenance along with any relevant tax credits or incentives if price remains a sticking point. Finally, the example of segmentation by vehicle budget allows marketers the opportunity to proactively showcase vehicles or trim levels aligned to shopper budget. This still leaves upselling opportunities available to buyers with more flexibility in price and interest in specific features or packages.
Delivery and Platforms
Where to reach consumers is also a key component of the tariff-busting strategy. Social media is a great place to address the impact of tariffs head-on as shoppers seek information on which brands and dealers they should consider. Interactive video is another way to create opportunities focused on the long-term value proposition mentioned earlier, with the opportunity to add third party editorial content or industry accolades highlighting key brand and model attributes, or explainer videos featuring current owners or industry experts illustrating the “why buys” for each model in the lineup to lend credibility to their purchase.
Connected TV should also be a strong consideration to complement linear buys during the age of tariffs due to its efficiency advantage. Limiting delivery to only active shoppers ensures less media waste. While inserting interactive and direct response elements such as QR codes, clickable overlays or shoppable ads featuring local inventory make CTV viewing experiences highly engaging. In addition, more seamless opportunities to directly attribute vehicle sales to CTV spend are now available, allowing a full view of the entire customer journey from the first touchpoint to final sale for future buyer journey optimization.
Measurement
If the goal of all marketing is to drive sales and build loyalty, then it only makes sense to measure a campaign’s effectiveness through those two lenses. Leveraging vendors with the ability to match marketing touchpoints back to actual vehicles sales is a sure way to prove ROI of your marketing campaigns and validate that you’re reaching the right audience with your messaging.
While video views and website actions are good indicators of shopper interest, tying everything together with a sales match vendor is the missing piece toward optimizing to the audiences that truly make an impact to your bottom line: those purchasing your vehicles and dealer services. Customer Experience efforts geared toward brand or dealer loyalists can be measured in terms of customer retention and lifetime value. They can be supplemented with surveys or interviews with loyal customers to determine what’s working and what to improve upon.
Pulling it All Together
Circling back to shopper segmentation, loyalists and prospects should segmented accordingly and treated with different messaging at a minimum. Further segmentation by buyer stage is a powerful way to ensure the right message is delivered at the right time, including upfront and honest conversations on tariffs at the outset, a focus on long-term value of your brand and its models, and offering vehicles and trim levels that make sense for each unique buyer. A combination of facilitating a two-way conversation via social media in addition to interactive video formats including CTV ensures a shopper’s voice is heard, their concerns are addressed, and opportunities for engagement are plentiful, while delivering more efficiencies than linear TV alone. Closing the loop with sales attribution for your digital campaigns is the proverbial icing on the cake.
The impact of tariffs on the auto industry will be significant, there’s no doubt about that. But with the right marketing strategy we can weather this storm like the ones that preceded it and emerge with a stronger and more resilient approach for the next challenge we’re sure to face…hopefully after a long period of well-deserved calm!
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