The Future For Auto Dealerships
Is Here

April 1, 2018 Carol Forden

Auto dealers are increasingly aware of what the future holds and what is will look like in contrast to how business is done today.

Car sales are moving online with 97% of the car buyers journey starting online. How will tomorrow’s car salesperson sell to customers with no physical store, or with autonomous vehicles?

The question is: how to rethink today’s traditional car sales operations and legacy model of communication so that your dealership appeals to the customers today and in the future?

Below are some of the common topics and insights on the future among Outsell Digital clients and thought leaders in the automotive industry.

1. The Customer Focus Has Turned From the Physical Store to the Online Customer Experience

The future of the automotive sales is heading towards digital, the KPMG’s Global Automotive Executive Survey 2018 found that 56% of automotive executives think that the number of physical outlets will be reduced to about 30-50% by 2025. 

Furthermore, “auto executives believe that its Brand above all – this year 41% of execs believe a trustful brand to be the key success factor for a sharing economy, followed by communities sharing the same values (24%).”

In the past, customer perception of a trustful brand was very much linked to the product itself and possibly to a visit to the dealership – an environment which was solely dominated and managed by the manufacturer. The future is more complex: Brand perception goes far beyond the mere product.

“Almost half (43%) of the surveyed respondents show confidence that half of the car owners they know today will no longer want to own a personal vehicle by 2025.” According to this year’s executives, the most important reasons for this are living circumstances (32%), followed by total cost of ownership (23%). Especially vehicle manufacturer executives believe that living circumstances and the resulting urbanization are the most important reason (43%).”

The consumers is now in the driver seat, visiting the dealership aided with information and research they have completed online.

Further, 80% of drivers would be unlikely to buy a car without a test drive first. This means that there will be opportunities for dealers to talk to and interact with customers, answering their questions concerns during the buying process.

How to plan for the future…

a) Have a Multi-Channel Marketing Strategy

Today, consumers start their buying journey online, when a car buying consumer does visit your dealership they know what to expect both regarding the service they should receive and the condition and price of the vehicle they want.

Success Factor Multi Channel marketingToday online researchers can find out everything about a vehicle long before visiting a dealership; from car reviews and reviews on your dealership to information about the car they want and your online presence on social media from Twitter, Facebook, and YouTube, etc.

This shift to online buying means that customer expectations have changed, which is why multi-channel marketing is now mandatory. Today, customers expect a 24-hour real-time response, and 81% of customers will take their business elsewhere if their questions are not answered quickly.

81% go elsewhere if questions are answered quickly

b) The Days of Pushy Sales Methods are Over

The customers coming through the door have likely research everything they need to know online. They don’t want a sales pitch; they want guidance and insights.

When they visit your dealership, they expect to have the exact experience they have read about in positive customer online reviews.

You will build trust with customers that you guide through the purchase rather than push sales to, which will contribute to more positive online reviews.

The thought of fewer visitors coming through the door is not necessarily bad, even with less traffic, the traffic is more “targeted.”  The consumers have done their online research and chosen to visit your dealership after looking at everything available online to know about you.

As long as you give them the customer experience they expect, you will achieve your sales targets.

Read More: Benefits of Multi-Channel Digital Marketing for Auto Dealerships

2. Technology is on the rise: You need to embrace it, don’t fear it 

Technology and the digital aspect of the consumers’ journey have had and will continue to have a significant impact on car sales. Dealerships need to embrace the ever-growing opportunities technology offers if you don’t your competitors will.

Embracing technology is at the top of the list when it comes to the critical factors to stay ahead of the competition. Technology gives automotive brands hand dealerships the opportunity to engage with potential car buyers.

How to plan for the future…

Embrace technology that boosts engagement with customers:

a) Rich SMS Marketing

Rich SMS is a text messaging that contains multimedia content that is not limited to 160 characters, unlike traditional SMS marketing with visual content through a shortened unique URL in the body of the text. With Rich SMS you can offer different types of content to suit the campaign: from customer surveys, coupons, discounts, gamification, and calls-to-action such as “Call Now,” “Book a Test Drive,” “request a call back” and similar. Rich SMS has an open rate of 98% compared to email marketing campaigns at just 6%. Within 3 minutes of receipt, 90% of SMS messages are read.An image showing the open rate of SMS vs emailb) Social Media Advertising

This type of advertising relies on social media platforms to generate, target and deliver the ad. The use of social media is on the rise and most consumers engage with some form of social media daily, be it Facebook, Twitter, Instagram, YouTube or other platforms.

The U.S. market has the highest social network penetration rate in the world.

In the United States, 81 percent of the population had a social media profile. This means that there were around 207 million social network users in the country. This method will expose your ads more, so by adapting to the technological changes in marketing, you too can be targeting this audience if you don’t already.

Percentage of U.S. population with a social media profile from 2008 to 2017

Percentage of U.S. population with a social media profile from 2008 to 2017Technology is unavoidable regardless of your business category and accepting the advancements it offers you will be increasing your sales opportunities.

3. Auto Trader is More Demanding… And Giving Fewer Results

The feedback that we hear from numerous prospects and clients is that they feel that Auto Trader has become more demanding and prices have increased, (how you rank sets the rate that you pay to advertise), and the results a few dealerships are getting are decreasing year over year.  You can read more here on ways to Differentiate Your Auto Dealership – Alternatives to Auto Trader

80% of USA car dealers advertise on Auto Trader, how do you get your dealership to stand out?

Plan for the future…

a) Develop a Multi-Channel Presence

Auto dealerships need to have an online presence everywhere the competition does and does not to boost brand awareness. A multi-channel presence gives your dealership customers multiple ways to get information about your dealership, service, and inventory whether it’s through social media, visiting your website or the physical dealership.

b) Local SEO

Search Engine Optimization (SEO) promotes your cars to local consumers at the exact time they’re looking for them. SEO helps a website rank higher than the local competition.

Local SEO gives you better exposure to potential customers without the expense of an automotive platform such as Auto Trader or Cars.com.

The objective is to not put “all your eggs in one basket.”

Diversifying your marketing strategy to garner the best results today.  Consumers have a preference for where and how they research cars, and it isn’t always Auto Trader.

4. Times are a Changing; People Don’t Want to Own Cars Anymore

According to the KPMG study, 43% of auto executives believe that by 2025 50% of car owners will no longer want to own a personal vehicle.

Today, there are endless options with car financing and leasing available; fewer car buyers want to buy the cars they’re looking to purchase, more and more people are leasing vehicles than ever before.

The key is to assure that you are meeting the changing needs of the consumer, ff car buyers prefer to get a car on finance or lease a vehicle, promote these options.

How to plan for the future…

Your advertising has to be effective and available where the consumer is:

a) Display Advertising

Display ads are advertisements on websites that your customers may visit.

Today, there’s more than one way to advertise on websites; e.g., text, banner, apps, sponsors content, etc.

As an example, your dealership may decide to target an audience that uses driving test apps.

Why?

The audience that has downloaded the app is close to passing their driving tests.  This means they may be thinking about buying their first car.

Since the majority of first-time drivers are between 16-25 years old, they are likely to be not as stable financially and would likely be interested in low down payments with financing or leasing.

b) Social Advertising

As explained above, social media platforms are widely used in the USA, so exposing your ads to this audience can be beneficial to your dealership.

Using social ads to showcase finance and leasing, low down payment, used car carousel images of inventory cars is far more effective than advertising car prices.

c) Rich SMS Marketing

Also explained above, Rich SMS text messaging is a highly effective way to advertise special offers, coupons, finance and leasing options to existing and potential customers.

SMS Marketing has a high open rate and click-through-rate, advertising with this type of marketing is fare unlikely to be missed.

Aa more relevant, targeted and personalized ad or promotion showcased in the campaign, the better the results.

Want to Get Ahead With Your Marketing Strategy?

If you are interested in updating your marketing strategy by implementing a multiple channel strategy, contact us, to talk about how Outsell Digital can help.

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