10:03 am, October 7, 2022
With an ongoing cost-of-living crisis and agency sales looming, the next 12 months could prove to be a challenging time for the nation’s car dealers.
It is therefore key that every facet of a business is running as smoothly as possible in order to keep disruption to a minimum.
One key area that needs to be up to scratch is marketing and we caught up with expert Simon Crace to find out why.
Here is what Crace, managing director at MB Advertising, told us…
What are the key challenges you see dealers facing over the next year?
The introduction of the agency model for some and an even more competitive used car marketplace for all. A continuing shortage of used car stock alongside a predicted, prolonged recession are some key challenge.
There will be no shortage of issues to deal with but as always, it’s the businesses who adapt quickest who will come out in the best shape in the long term.
How can marketing play its part in overcoming these challenges?
Simply put, you need a marketing strategy that totally aligns with the changing needs of your business.
Whilst that may be obvious, most new clients that we speak with don’t have that in place before partnering with us.
For example, a dealer may want to grow their used volumes by 25 per cent but they haven’t got a considered and costed strategy to help them achieve this.
Often, they are typically doing the same marketing but expecting a different result, or worse, they are spending their budget using ineffective methods.
How can dealers sell more used cars in a recession?
Dealers need the ambition, a clear and defined marketing strategy, and a budget. I think that most dealers’ used car marketing strategies for the last 10 years has been to perfect the art of online retailing.
This, as we know, generates the best response from Auto Trader and other online classified sites as well as the dealer’s website. This has been the right approach and will remain an essential part of any future success.
However, in my opinion, we are now entering a different era of the digital journey where the dealer’s own brand (which may have been secondary in previous years) is now coming to the fore to own the local digital space around them.
It is now entirely possible, using the digital tools that we have built, to own that space and saturate their marketplace with their used car stock to new potential customers, with any given budget.
We call it the Used Car Eco-System and it’s one of the first things we assess when talking to dealers about their used car performance and aspirations.
Faced with a smaller budget next year, where would you start to drive growth for used cars?
Without a doubt, dealers’ databases. To manage costs, dealers often use one channel to market to their database; this is email.
A channel with an average 35 per cent open rate is successful but is still not speaking to 65 per cent of the opportunity – even less if only 80 per cent of their database has an opt-in email address.
Usually within 30 minutes of asking questions in this key area, we can recommend some huge opportunities within a dealer’s database, and as we all know, those repeat customers are the easiest and most cost-effective to sell to.
How can you help dealers overcome stock shortages?
The holy grail of stock can also be found within dealers’ own databases with a targeted and tailored 12-month car buying strategy.
However, most dealers don’t utilise this rich seam of part-exchanges as well as they could.
Whilst ‘We Want Your Car’ campaigns are effective and successful to a point, they generally cost more and generate less bottom-line business than more targeted and frequent communications.
Targeted delivery of tailored messages on a daily and weekly basis delivers a low-cost, constant stream of manageable and higher-converting used car stock opportunities.
Using broadcast media to generate used car stock will cost dealers a fortune as they compete with the digital players who spend millions dominating that space.
We’re not saying don’t do that, but we are saying start by looking at home and exhausting that opportunity first.
If you are interested in speaking with MB about any of the topics outlined, visit their website. Alternatively, you can call 0114 244 6060 or send an email to [email protected].
