Autos, White Papers

Introduction (download the PDF below for the full article)

For used vehicles, sales events are largely a function of a bygone era, when shoppers had little transparency into vehicle prices or values without entering the store. The purpose was to use a sampling of low-price/high-value demonstrations to generate urgency in shoppers who are thinking about buying a vehicle and store preference for those who are definitely in-market for a vehicle. Today, shoppers have access to market pricing on millions of vehicles and enough information about many of them to formulate initial value estimates.

New-vehicle sales at the dealer level are quickly losing their impact, and coming changes will further erode their effectiveness. Information transparency regarding vehicles, prices, and interest rates is leading to the obsolescence of dealer specific sales events. This is not unique to the automobile industry. Other durable goods industries are already responding to the changes in consumer behavior brought on by readily available market information. Auto dealers must do the same.

More and more dealers are turning their used-vehicle inventory in less than 45 day, and many in less than 30. Keeping new-vehicle inventories to less than 60-days supply has become a priority for many manufacturers as well. When every shopper has 24/7 access to information in a competitive market place, the job of blowing out inventory is constant, and the blowout sales event becomes obsolete.

Related files: 

The Obsolescense of Sales Events~.pdf

There is no doubt that inventory-level video helps drive more ready-to-buy traffic to the store. The question holding most dealers back is whether or not it is cost effective for them. The answer is yes for some stores and no for others. In many cases the mathematics needed to determine the difference are not all that difficult.

The objective of inventory-level video is to produce more contacts from a given number of vehicle exposures. Most of the benefit comes from more Vehicle Details Page views (VDPs) to contact the store by phone, email, chat or walking in. Secondarily, shoppers with a strong preference for video may choose to view vehicle listings on third-party sites that include video over those that do not, raising the number of VDPs. Regardless of the increase from one benefit as compared to the other, the end result is a higher quantity of ready-to-buy shoppers contacting the store.

This benefit is very measurable. How many contacts is the store receiving from its listed vehicles and how much does it need to go up in order to cover the cost of producing the video. To establish the value of a contact, one need look no further than the marginal cost per contact from the poorest performing source used or the expected cost per contact from the next best service being considered.

[See attached PDF for the complete article]

Related files: 

The Inventory-Level Video Decision.pdf

Executive Summary (Click the link below to download the complete paper.)

Most dealers do not have a marketing strategy, and it is hurting them financially in a number of ways:
1. Buying the wrong kind of advertising
2. Not buying enough of the right advertising
3. There is little or no synergy among the components of the overall advertising campaign
4. Advertising is not working in conjunction with pricing and the rest of the marketing mix
Advertising cannot be purchased cost effectively without consideration of how each advertising purchase works together and how the overall advertising effort works in conjunction with pricing, distribution (location and sales operations), and the product mix. The dealer’s marketing strategy maximizes the result of all these elements working together.

Dealers have but two fundamental advertising objectives, branding and traffic now. Branding should be done sufficiently or not at all. This is a key consideration in formulating the dealer’s strategy. Vehicle price is the top consideration impacting the effectiveness of traffic-now advertising. These two considerations, branding and pricing, define the four major marketing strategies dealers embark upon.

Which strategy is best for the dealer depends a great deal on location and franchises, if any. These variables cannot easily be changed. Modification of pricing, advertising and the mix of used vehicles are relatively easy to modify. The way in which the store operates can be changed to match any new marketing strategy. However, operational changes are difficult enough to merit consideration of developing a marketing strategy around the proven competencies of the existing store leadership.

Related files: 

Dealer Marketing Strategies.pdf