Auto dealers are a resilient group. From margin compression to high vehicle prices and low inventory, there has been shortage of obstacles to overcome in recent years. But the most forward-thinking dealers know how to adapt and thrive.
As consumer expectations and market conditions continue to shift toward digital, one-size-fits-all marketing and sales strategies are no longer effective. Today’s consumers want personalization, and forward-thinking dealers are adapting to deliver the experiences consumers expect.
What Your Dealership’s Level of Operational Advancement?
When it comes to operational advance, dealers can be categorized into three main groups: static, modern, and forward-thinking. Static dealers have limited technology and take a more traditional approach to sales and marketing. Modern dealers use some digital technology, but still rely mostly on manual processes. Forward-thinking dealers, on the other hand, leverage advanced technology. They use integrated auto dealership software, automation, and data throughout the dealership.
Forward-thinking dealers aren’t only more technologically advanced; they are more profitable too. Forward-thinking dealers use data to implement specific sales and marketing strategies to attract more customers, manage leads more effectively, and advance their businesses. In fact, forward-thinking dealers experience 64% higher net profit than static dealers, according to the 2022 Cox Automotive Forward-Thinking Dealership Study.
Marketing Strategies of Forward-Thinking Dealers
To improve personalization and create messages that resonate with individual consumers, forward-thinking dealers focus on four key marketing capabilities: behavior insights, lead management, content development, and service marketing.
- Behavior Insights: Using data from their dealer CRM or website to make marketing more personal
- Lead Management: Leveraging the CRM to manage leads and communications
- Content Development: Creating personalized advertising and communications to attract new consumers and retain business
- Service Marketing: Growing service business through campaigns targeting owners who did not purchase from the dealership
Sales Strategies of Forward-Thinking Dealers
The sales process is complex, bringing together many capabilities from both front-office and back-office operations into one workflow. Forward-thinking dealers focus on a few of the following capabilities at a time to streamline and personalize the sales process.
- Vehicle Selection: Providing search filters or vehicle configuration tools to consumers
- Trade-in Valuation: Providing value vehicles for trade-in
- Trade-in Vehicle Inspection: Inspecting vehicles for trade-in
- Trade-in Offers: Proactively contacting customers related to trade-ins
- Trade-in Payoff: Paying off or satisfying existing loans on vehicles for trade-in
- Credit Decisioning: Determining consumer credit worthiness
- Aftermarket and Menu: Providing search filters or tools for customers to shop for aftermarket products/services
- Desking: The process used for building deals
- Compliance: Ensuring all sales comply with state and federal regulations for transaction and consumer information
- Contracting/Document Management: How a dealership handles the final sales contract
- and storage of documents
- Signing and Vaulting: Signing final contracts (electronic or paper) in a secure, trusted environment
- Registration and Title Management: How a dealership manages and tracks vehicle registration and the process for title management and storage
No matter what kind of dealership you are today, you can prepare for tomorrow’s challenges in ways that pay off now. Adopt the strategies of forward-thinking dealers to evolve with modern consumers and meet every sales and marketing challenge that comes your way.
To learn more about the strategies and tactics uses by today’s top dealers, check out our guide: The Forward-Thinking Dealership: Sales and Marketing.