First the pandemic, now the chip shortage. Dealers have been hit hard over the past year. You don’t need the news to tell you just how bad the inventory situation is right now. According to Cox Automotive, new car inventory is down 42% nationwide from April 2020. That’s only about a 33-day supply for most dealerships. The outlook for when full automobile production will resume is grim and seems to be worsening. Car dealers are in a tough spot. You need to keep your name out there, but with the lack of inventory, what do you advertise? And with the average new vehicle price topping $40,000 (up nearly 10% in two years) and reduced manufacturer incentives, price points won’t make for an effective marketing message at the moment either.
The good news is that if you’ve been including strong branding campaigns in your automotive marketing, you’re already in a better position than you may think. And if your brand has historically focused on “the deal” instead, it’s not too late to shift your messaging to branding. You see, even though inventory is at an all-time low, consumer demand is really high. In fact, the April 2021 SAAR was around 18.5 million cars. That means there are still buyers out there and you still need to reach them.
Watch our latest 60-Second Automotive Update to learn why you should persevere even when your competitors are pulling back and what you can do to make your branding messages more impactful.
What should dealers keep in mind as they shift their marketing messages from retail to branding? How does the psychology of the consumer come into play when formulating those messages?
The demand is still there. With pandemic restrictions easing up, it’s no surprise that consumers are in “buy-now” mode. Despite challenges with inventory, and even inflation, now’s not the time to take your foot off the gas when it comes to your advertising. There’s still a demand in the marketplace for new, used and fixed ops. And the fact that in-market consumers are acutely aware of the inventory shortages has seemed to only heighten the demand. So, it appears that Automotive is 2021’s version of the toilet paper shortage of 2020. How can you capitalize on that? Consider a scarcity strategy. The thought of not being able to get something you need or want because that item is scarce is a powerful psychological motivator when it comes to the purchasing decisions of consumers.
Consistency is key. Dealers who remain consistent, whether it be with their messaging or with their media buys, tend to gain market share even when the market takes a hit. As we discussed in our “Grow Long-Term Market Share Through Consistency and Persistence” blog post, brands that continue advertising and marketing efforts in both good and bad times do better than their competitors in the long run. On the other side, dealers who rely on “spasm advertising” – an eclectic hodgepodge of marketing information with no continuity – see no residual benefit from the thousands of dollars they spend every month to capture new customers. And here’s something else: consistent presentation of a brand has been seen to increase revenue by 33%. So, yes, consistency definitely matters.
What’s so great about you? At the end of the day, consumers don’t really care about how many units are on your lot or how long those units have been sitting there. They care about how you treat them and how you can make their life easier when buying or servicing a car. Therefore, it’s important to leverage your brand equity by having a unique selling proposition and highlighting what all makes your dealership different than your competitor down the street.
What sets you apart in your market and what are you doing in your market to convey that message? If you’re having a difficult time answering those questions, contact Intermark Automotive today. We can help!
by Shea Posey, Senior Account Executive/Blog Writer/Compliance & Co-op Specialist
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