The last three years have been significantly different than any period since the great recession. Entering ’23, there are headwinds to battle. Many of the challenges are macroeconomic. The industry as a whole must adapt (as we always successfully do), and make a positive impact in the areas where we have control.
Pent-up demand is still a thing. Many customers have been patiently waiting for the right and affordable time to buy… and are remaining on the sidelines. As inventory returns, customers are shopping again. They want a value proposition, the right place to do business, and a monthly payment that is affordable. Fed policy, increasing vehicle prices, and inflation that over-indexes wage increases are reasons customers remain on the sideline. Not to mention, we’re currently in the annual January ‘lull’ when customers are working through holiday credit card bills, all while dealing with revolving credit card debt that is 29% higher year over year (and now with higher interest rates).
This mix of headwinds might seem impossible to overcome. But we all must do what we can to earn our unfair market share. First-mover advantage can pay dividends. We can’t sit still and hope customers choose your store. If your competitors are late to the game and not willing to make changes, you have an advantage. No one wants to see a race to the bottom, but pricing and payment are huge sticking points. Cost of living is up 8% YoY, while wages are up 4% YoY. With everything being relatively more expensive, the sideline waiting game will continue for those who are not desperate for a new vehicle.
What about your advertising? PPC won’t save you. If you have a reputable provider and have followed their advice, your PPC ‘net’ is cast to capture customer demand adequately. You need to be thinking further up the funnel and also via more direct marketing tactics and strategies. But before any of that, you MUST know your message. “Most stout inventory selection in 2 years!” “Most aggressive pricing in 2 years!” (or both!). If your message does not resonate with customers, your advertising budget will be ineffective.
Make sure your advertising basics are being handled exceptionally well. PPC and SEO will capture the demand already present in the market. Social and Youtube should be employed for retargeting, AIA ads, and prospecting purposes. Streaming video (and audio) combines the integrity of traditional big-screen ads with the data and efficiency of digital advertising and brick-and-mortar tracking capabilities. If you’re employing a solid full-funnel strategy, don’t make knee-jerk reactions to macroeconomic headwinds. Change your messaging and add direct marketing tactics that you may have put on the shelf a while ago.
In baseball, they say, ‘hit it where they ain’t.’ The same can hold in advertising. If you’re doing things your competitors are not doing, and your message resonates, you will succeed. Winning the “share of voice” battle in your market and employing an array/differentiation of tactics will help you stand out from your competition. For example, there are not a lot of tier 1 or 2 TV spots these days. Instead of 3-4 car commercials per pod (like three years ago), there’s 0-1 if your dealership enters this space, your message will over-index.
Direct mail and saturation/event campaigns can put your updated messaging directly in front of your prime customers. (Yes, this digital-focused agency is talking about direct mail. If it fills the proper void to help our customers, we don’t why away).
Long story short, don’t throw your full-funnel strategy away. It’s worked for the past 3+ years to drive pre-orders, leads, and ROs. Add to it. Do different things by thinking outside the box. Your Driven Media Group Account Director is here to help your store succeed. Consult with them today for assistance in these areas.