The automotive market is looking for guidance in a new world.
While virtually all businesses and markets were shaken by the effects of the coronavirus pandemic, the automotive market was also given a violent kick into the 21s century’s way of doing business. Dealerships have been slow, if not purposefully resistant, in accommodating entirely online transactions with their customers. Just prior to the pandemic and the restrictions that accompanied it, competitors such as Carvana and Vroom were opening the eyes of brick and mortar dealership owners to the fact that some consumers preferred purchasing a vehicle entirely online.
Dealerships tried to rationalize this phenomenon away as a small segment of the consumer market. Perhaps they were correct—but then, state-level restrictions turned preference into necessity. Now they’re scrambling to stay relevant in a whole new world of car-buying.
1. Contactless Transactions Are Here to Stay
This genie cannot be put back into the bottle. During the pandemic, dealership services were considered essential, and most dealerships remained open and operating, but restrictions on contact with customers meant they had to make some adjustments. Dealerships began to offer contactless “concierge” services for both the Service and Sales departments
If a customer needed their vehicle repaired, they simply made an appointment and either dropped the vehicle off at the dealership, or a porter would pick up and drop off the vehicle from and to their location of choice. If a consumer wanted to buy a car, they could browse inventory online, correspond with a salesperson and finance person via email, request a vehicle be delivered for a test drive, or simply buy and have the vehicle delivered and complete all paperwork at home.
This created the biggest challenge for dealerships because, up until this point, almost all vehicle purchase transactions were completed at the dealership. Few dealerships were prepared to transact all the legal documents involved in car-buying online. They were even less prepared to market to consumers that barely left their home, let alone couldn’t drive by or visit the dealership. After several months of operating in this manner, many consumers are now accustomed to and prefer contactless dealership transactions, and dealerships have learned that we won’t be going back to the “old ways.”
2. Marketing to the Online Car Buyer
Prior to the pandemic, 95% of consumers began their car buying journey online, researching vehicles for options and safety information, searching local dealerships and investigating fair pricing. Dealerships knew this and reluctantly invested in a few digital marketing efforts, primarily through improvements to their own websites, Google and Facebook advertising, cookie-based remarketing and participation in third-party site inventory listings.
This strategy still relied heavily on the consumer stopping by or calling the dealership prior to making their buying decision. With more and more dealerships working to offer contactless transactions as a permanent feature and with the end of cookie-based advertising being nigh, this digital marketing strategy is no longer effective.
Dealerships will need to rev up their data-driven engines and look to more personalized connection solutions to market to today’s car buyer. Data analytics that convert unknown website visitors to credit-qualified in-market shoppers are vital, exacting on effective social-media marketing is critical, and investing in mobile solutions that build brand and loyalty will give the dealership a much-needed advantage.
3. Classic Solutions That Still Work
Direct mail has been a staple of dealership advertising for a very long time, but as online car searching and social media became more popular, dealerships allocated less of their marketing budget to this effective medium. Likely true for most verticals, the automotive market saw a sharp increase in the utilization of direct mail in 2020.
You must meet consumers where they are, and right now, they are at home. In fact, some experts now predict that “25-30% of the United States workforce will be working from home multiple days a week by the end of 2021.” This means direct mail will remain an effective marketing solution well into the future, and dealerships would be wise to redistribute some of their marketing budget back to direct mail.
4. Creating a Unique Customer Experience From Afar
One of the biggest challenges for dealerships in this “next normal” is providing a unique, personalized experience and staying top-of-mind with customers who may rarely or never interact with them face-to-face. Dealerships have always found the value in typical promo items such as keychains, pens and travel mugs, but some are now realizing that they can increase their brand awareness and brand loyalty by embracing the vast universe of promotional products. They see the results that manufacturer-branded promo (that they often offer in their own dealerships) can have on customer experience and brand loyalty, and they are eager to apply the same strategy to their marketing efforts.
5. This is Where You Come In
While dealerships recognize the consumer market has radically changed and their old ways of doing things will quickly put them in danger of going out of business, they are at a loss for where to start transforming their own marketing strategy. This is where you, the expert consultant, come in. Dealership owners and managers know one thing: moving and maintaining metal. They rely on subject matter experts for everything else, from what everyday lubricants to use to which printers to buy. They look to someone with documented experience to guide their decisions.
Marketing is no different. While dealerships have in the last decade invested in creating on-staff positions for marketing management and business development, these staff members are typically not experienced in the print and promotional products arena. You have an opportunity to be a valuable partner to the dealership in this capacity.
The key will be bringing them new ideas regularly to engage their customers and set them apart from other dealerships who are also working toward the same objectives. A new type of consumer requires a new promo strategy. Solutions should focus on building deep, meaningful relationships with the customer. We cannot replace the mechanisms of face-to-face relationship building, but we can find new ways to speak directly to our customers and make them feel appreciated.
The most important element is being innovative and forward-thinking. Don’t be a “used idea salesperson.” Dealerships are starting to embrace technology and promo products. Let’s not scare them off. Let them take your ideas for a test drive, make sure to illuminate all of the features and benefits, where proven success exists, share the information with them and above all, ask questions to better understand your dealership customers’ goals.
While the last year has been a challenge for everyone, it has also brought many opportunities. Jumping into or expanding your business in the automotive vertical market is one of them. Dealerships have rebounded better than expected and business is projected to build back rapidly over the next two years. Don’t miss out on this exciting and fast-paced market!
