The winds of change are buffeting dealer’s marketing strategies amid continually shifting forces and dynamics, ranging from unpredictable inventory levels and high interest rates to evolving marketing technologies and stressed ad spends. What are dealers supposed to make of this ever-changing landscape? To gain some insightful strategies for coping with these challenges, Automotive News spoke with Angie Cordova, vice president, product, at Ansira, a global marketing technologies company, and Erik Hjermstad, vice president, product management, at Experian Automotive, a leader in auto-data intelligence.
Adapting Automotive Marketing in a Shifting Landscape: Strategies for Dealers in 2023
Q: With auto manufacturers pulling back on incentive spending, the tactical nature of dealership marketing can no longer rely on ultra-low offer rates. What should dealers be focusing on now, in place of low rates, to get customers attention?
Angie Cordova: With ultra-low rates no longer the dominant mechanism to get consumers’ attention. Dealers must rely on other mechanisms that can be leveraged to combat this, like declaring their own discounts to stay competitive in their local market, and turning to vehicle availability features on their websites and social platforms. Website features that consumers are accustomed to in other industries, such as booking a hotel room or buying airfare, can be powerful in showing how many similar vehicles are in inventory, or how many other consumers have recently viewed that vehicle. We know fuel efficiency is one of the primary filters consumers leverage to narrow their search results and dealers can create a frictionless experience on their website by enabling consumers to find fuel-efficient vehicles easily through pre-selected filter chips, navigation options, and inline advertisements directly on the search results page.
Erik Hjermstad: Dealers need to make sure they understand who’s shopping, when they are in the market for a vehicle and where they are shopping. When price is no longer a key lever to pull, it’s critical to learn what else may motivate consumers. What are their buying preferences? Or what is their affinity towards a type of vehicle or brand? Is it ease of doing business with your dealership, your brand, your sales process or your service? We’re also seeing that price transparency is a key driver, too. Ultimately, you need to understand what will entice consumers to buy from you, so look at their psychographics to really get to know what motivates them to make a move. You also need to understand their channel preference so you can more strategically connect with them. Whether they are on their phone, tablet, online, checking email or streaming, you need to know where they are to better target them.
Q: There is now a complex set of factors that dealers big and small need to contend with: unpredictable inventory supply, higher interest rates, reduced dealership staff, etc. Given these new challenges, how should dealers be adjusting their marketing plans to reflect the ‘new normal’?
Hjermstad: Dealers need to focus on their data. Be sure your data is nimble enough to change, based on what the market is doing. You need to start upstream and use identity resolution to ensure your marketing data stays up to date, regardless of market shifts – your data must remain clean and needs to move with the market. At Experian Automotive we help marketers do proper data hygiene, enrich and append fragmented data and include digital identity resolution because, with consumers on multiple devices, they need the ability to identify them across devices. Whether your “new normal” is continuing to focus on acquiring used vehicles or shifting focus to the service drive, you need to start with clean data.
Cordova: In an industry where the only thing that’s constant is change, dealers should be nimble with their marketing plans. A thorough, holistic review of their marketing plan is essential to ensure it’s serving them well. Are there things on the website, SEO, or advertising strategies that are impeding the consumer’s digital experience? Look at what the data is saying. After the data review, make adjustments based on what consumers are (and aren’t) doing. Be bold with a ‘fail fast’ mindset - try something new, and if it doesn’t work, change it. If dealers are struggling with low inventory, create an incoming inventory page to consolidate the vehicles that are in transit, in the factory, and/or on order into one view. Consumers have high expectations for what they want in a digital experience, and on average they form an opinion based on what they see in just 0.05 seconds. Approximately 38% of consumers will stop engaging if they find content and layout unattractive, or if the images take too long to load. It is imperative to make sure the content on the website is meaningful to consumers. People in the US visit 130+ websites on average per day, yet consumers only shop for a vehicle every 3 to 5 years. Draw influence from other industries and simplify your search results and details pages to mimic what consumers are accustomed to in other industries.
Q: With many dealers taking a hard look at their marketing budget, how can they become more disciplined with their spend, without spending more?
Cordova: Stretch spend by letting technology and automation do the heavy lifting. Using third-generation AI logic, Ansira can optimize spend across multiple channels at once and/or across multiple publishers at once. We’ve seen that 61% of consumers are entering the website directly through the search results page, which is a result of using robust SEO strategies that drive organic traffic and longtail search terms. All this combined means dealers need a comprehensive partner that maximizes their spend across advertising, website, and SEO strategies.
Hjermstad: This comes down to understanding your consumers before choosing how you’re going to market to them. We recommend looking at demographics, psychographics, buying personas, buying patterns, preferences and attitudes to really understand your consumers. Once you understand who you want to focus on, you can choose a very targeted audience. This process is highly effective and very cost-efficient. There is much less waste because you are focusing only on the consumers you want to reach. Another way to spend less but gain more is to learn about your market to expand market share. Dealers can learn about their competitors as well as how they are currently positioned in the market. This enables them to learn where and if they are likely to win/grow, so they can make key marketing decisions. Dealers must be more disciplined. Take your time and do your homework before making decisions. It’s much more effective that way.
Q: Traditionally, so much marketing focus has been placed on new vehicle sales. Can dealers utilize similar marketing measures to attract in-market consumers for used vehicles sales?
Hjermstad: Yes, absolutely. Understanding which consumers are in-market for which brand, make, model, in what price range and in what time frame is the best way to do this. And to gather that information and then find that unique audience to market to is the best way to find the right customer cost-effectively. Dealers don’t need to mass market and hope something “sticks” with a few consumers. They can target customers when they are in-market. It’s incredible what dealers can do these days by using psychographics and buying-preference information. This drives exponential marketing effectiveness.
Cordova: Absolutely. Marketing measures typically applied to new vehicle sales can be extendable to used-vehicle sales, too. However, we don’t have to limit dealers with just those metrics. Marketing measures can be tailored for used vehicles, like using inline advertisements and filter chips on the search results page to provide easy visibility and filtering options for consumers. Showcasing used vehicles with an SEO strategy can lead to organic traffic growth and, ultimately, a personalized website experience. Dealer-created offers and consumer urgency messaging encourages consumers to engage. Dealers should look at the data and let it inform their decision making. Did you know consumers click more often on phrases containing “used” vs “pre-owned” in the navigation? If adjusting the verbiage on the website means more consumers will click on it, why not try it?
Q: With more consumers keeping vehicles longer, should dealers be increasing their marketing focus towards service for existing customers? What are the most efficient ways to promote service and parts to existing customers?
Cordova: Dealers should have a marketing focus on service offerings for their existing customers. This is not new, but because of the pandemic and other factors, focusing on service has gotten a boost in recent years. Ultimately, this all comes down to the experience the dealer provides. Are dealers providing a frictionless experience for consumers to access service and parts related information on their website? Did the customer feel cared for throughout the purchase process or the last time they visited the dealer’s service department? If yes, those are reasons the customer will come back the next time their vehicle needs service. Other ways to encourage engagement and awareness include reputation management, responding to reviews, email marketing campaigns at the right frequency to spark customer interest, online service schedulers, easy access to the service department’s hours, and ensuring hours are accurate in Google Business Profile and on the website.
Hjermstad: Timing is everything. Dealers need to connect with customers at the right time. They need to learn when the customer is coming in and when are they due to come in and they need to be in front of those consumers with the right messages. For instance, it’s very easy to notify consumers about recalls. Even if those consumers haven’t serviced at your dealership for years, letting them know about potential safety concerns can help bring them back to your service drive. Additionally, Experian Automotive can help dealers learn how likely their customers are to service with them versus going to an independent repair shop. When you learn they are more likely to service at an independent shop, you may decide to make that a marketing priority and try to get them back to your drive.
Q: One new development that has come about from COVID is dealers’ increased focus in acquiring used vehicles, from both their existing customers and the general public. What types of marketing capabilities can be deployed to help dealers find these potential ‘sellers’?
Hjermstad: We recommend finding consumers or “audiences” that have equity in their current vehicle or who are off lease. This is the most effective way to identify people for trade-in. You also need to understand why and what may drive those consumers to sell you their vehicle and trade in. Look at their psychographics and buying preferences and learn what’s important to them in a vehicle. You must understand the dynamic between equity, interest rates, preferences and potential incentives and find creative ways to get consumers out of their existing vehicles and into new ones.
Cordova: Believe it or not, there are several ways for dealers to find potential ‘sellers’ to grow their used vehicle inventory. On the single-most trafficked page of the website – the search-results page – create an inline advertisement to increase consumer awareness. Ads do not have to be monetary! Dealers can promote their vehicle acquisition program in a meaningful way on the search-results page and, better yet, the ads are next to actual inventory the dealer already has, which organically encourages a consumer to consider their trade-in options.
Q: With all that is possible for dealership marketing and all the new areas of opportunity, how much of the marketing function should be outsourced and what should be kept in-house?
Cordova: I don’t believe there is a one-size-fits-all answer. Outsourcing or hiring in-house is going to depend on each dealer, their goals, their local area, and the pain points they need to overcome. That said, we’re all experts in our chosen craft. Ansira has people that are digital experts specifically trained to maximize results for dealers, driving brand awareness at the national to hyper-local level, securing more eyeballs on advertisements and ultimately generating more consumer traffic to websites. Dealers excel at selling vehicles and creating an experience for their customers in their brick-and-mortar store. Some dealers will have the technical chops to strategically define their digital marketing plan and execute it, but that may take time away from other priorities at the dealership. Whether it’s inside the dealer walls or outside help, the goal is to find someone to generate quality consumer traffic with a high likelihood of conversion.
Hjermstad: Whether you have 150 stores or two, you need to have a realistic understanding of your in-house capabilities. And as marketing becomes more robust and complex, what you can do today should guide your answer. From a data-management perspective, the data just needs to stay clean – it’s the execution that’s tough. We’ve seen success and failure on both sides. If you want to try outsourcing, test it. And if you’re successful and it saves you money and you get the measurement you need, then crawl, walk and run. But before you make any big decision, ask yourself one thing: Do you have the right sales team, business-development center and support mechanisms in place to support your marketing initiatives? And if you decide to outsource, be sure you receive end-to-end results, especially if you are only outsourcing a portion or a specific channel. You don’t want only one portion reported back.
ABOUT THE PANELISTS
Vice President, Product, Ansira
Cordova is an automotive digital-product expert who bridges consumer desires with tailored solutions, driving success with innovation and strategy.
To learn more, click here.
Vice President, Product Management, Experian Automotive
With more than 15 years of experience at Experian, Hjermstad is responsible for developing new, innovative solutions to help solve the automotive industry’s most challenging issues and needs.
To learn more, click here.