Gone are the days where a catchy radio or television commercial is enough to get buyers to walk into your dealership ready to purchase a vehicle. Car buyers today distrust traditional marketing channels and prefer to be more in control of the car buying process. How can automobile marketers implement best practices for improving performance, managing fast inventory turnover, and building a network of satisfied customers in today’s digital age?
When shopping for a car, buyers like to do independent research rather than rely solely on information dealerships provide. And when you’re trying to turnover inventory quickly, these factors can seem to work against one another.
A study from McKinsey on the consumer decision journey found that two-thirds of the active research period involves consumer-driven marketing activities, such as Internet reviews and word-of-mouth recommendations from friends and family, as well as in-store interactions and past experiences.
They like to curate content, ignoring those channels that do not resonate with them, in order to help their decision-making process. Because it is so easy to access prices, specifications, performance, and other factors, consumers have greater bargaining power.
If car buyers are already so informed, what information can dealerships arm themselves with in order to counter shoppers who become part-time product experts?
3 Ways Dealerships Can Increase Inventory Turnover with Data
Know Your Customers’ Online Searching Habits
Consumers now spend 12 hours online doing comparison shopping. And they’re not sitting at a desktop computer when they conduct research.
In an Edmunds.com 2014 Car Shopping Trends Report, 100 percent of smartphone owners surveyed say they used their device to perform some sort of car-shopping activity, typically for vehicle and pricing information.
It is clear your dealership needs to be accessible on a mobile platform to maximize user experience. Some factors that will turn off customers browsing your inventory on mobile platforms are:
- Failure to design a mobile-friendly site
- Pages taking too long to load
- Lack of information on what they’re searching for on your web pages
- Poor quality pictures
- Disorganized information
- Hard to navigate
- Lack of dealership contact information
Dealerships that utilize a platform to directly connect consumers with your VDPs will find themselves the most successful in uniting with exactly what the customer wants and increasing inventory turnover. VDPs accomplish this because these pages offer easy navigation, contact information, high-quality pictures, dynamic design, and information that exactly matches the query and intent of the consumer.
Know and Manage Your Online Reputation
Do you know what people are saying about your dealership on social media? Review sites are everywhere, and buyers will read every word when making independent situations. According to Invesp regarding the importance of online customer reviews:
- 90% of consumers read online reviews before visiting a business.
- 88% of them trust the online reviews as much as personal recommendations.
- 86% of customers will hesitate to purchase from a business that has negative reviews.
Beyond practicing impeccable customer service that would reduce obvious reasons for a negative online presence, ensure you are doing what you can to manage your online reputation. If someone left a bad review, leave a comment if you can that you will make an effort to rectify the situation, then take it to the next level in a private message if possible.
While you can’t delete negative reviews on most social media platforms, you can show those 90% of customers reading your reviews before they even step foot on your lot that you are a dealership that cares about the customer experience.
Consider Statistics Regarding Your Inventory Turnover Rate
Selling used cars is often more profitable than selling new cars. However, used cars that aren’t selling create frozen capital. To avoid losing money, you should have a solid inventory management platform in place that helps you know how to price used cars, appraise trade-ins, and base inventory management decisions on data.
When you evaluate your current inventory system, keep these factors in mind:
- The Leedom and Associates industry benchmark for inventory aging is to not have more than three vehicles on the lot more than 61 days.
- The average cost of used vehicles inventoried at franchised automobile dealerships today is nearly $14,000.
- 61 percent of a dealer’s used car inventory comes from trade-ins.
- 71 percent of car buyers surveyed reported being likely to consider a late-model used car as an alternative to a new car.
If you’re not exceeding—or at least meeting—these industry data standards, then there is a need for you to revise your marketing efforts. But without the ability to even gather and analyze consumer data, then you need to discover software solutions that can help.
And even if your dealership is Internet-savvy with a solid working knowledge of how to attract and keep today’s car buyer, there is always room for improvement when implementing an inventory turnover strategy.
So, there’s one question for you to answer …
What are you currently doing that’s working to maximize your dealership’s inventory turnover, and what can you do to improve?
Millennials. You know the type. They’re the young adults—ages 18 to 34—walking around with their faces perpetually buried in their smartphones.
That’s the stereotype anyway, and while it’s not as hard as you would think to get them to look up and have a conversation with you, it’s important not to underestimate how important those mobile devices are to the way they conduct their day-to-day business. Smartphones have become that “can’t live without it” gadget that millennials use to communicate, organize their days, decide where to eat, and, yes, shop for cars.
We’re going to let you in on a secret: It’s not just millennials who are reliant on smartphones to help them find a new car. Studies of recent mobile marketing trends show a majority of people now use their mobile device during the car-buying process.
51% of New Car Buyers Used a Mobile Device to Find Their Vehicle
In general, millennials have mastered the art of using their smartphone for nearly any conceivable task, and a recent study by Edmunds.com confirms that extends to shopping for a car. The survey found that 80% of millennials used a mobile device to complete at least one car shopping task. That includes reading reviews of cars, finding cars for sale, and researching car prices.
That’s a staggering number, and if you own or operate a car dealership it tells you a lot about how you’ll have to adapt your mobile marketing strategies in the future. But the longer you wait, the more sales you’re losing right now.
A study by J.D. Power from late last year found that 51% of ALL new car shoppers online used a tablet or smartphone to research the car they want. This marks the first time mobile devices have overtaken personal computers as the preferred medium for online car shopping.
The study also found that:
- Use of tablets to shop for a car has increased 83% since 2012
- Use of smartphones has increased 70% in the same time period
- 34% of new vehicle shoppers use a smartphone for research
- 30% use a tablet
Another critical takeaway is 48% of customers use their smartphones to look up automotive information while they’re at the dealership (13% use tablets). That means that half of the people standing in your showroom are using their phone to look up pricing, deals and specials, car reviews, and inventory listings.
So what does that mean for you?
Make Sure Your Mobile Marketing Platform Empowers Your Customers
The tools you give that customer can make or break their experience at your dealership. You need a website that scales well, loads quickly on a mobile device, and is easy to navigate from a smartphone or a tablet. And it must have have the right tools on it to make their experience at your dealership exceptional.
So, when a person standing in your showroom is consulting a third-party site instead, you need a mobile marketing and sales solution that is still going to put your cars on their touchscreen based on what they’re searching for.
If you’re still not convinced, take a look at the results of last year’s Mobile Path-to-Purchase study. It found that 54% of consumers who used a mobile device during their car-shopping process made a purchase. Of the 2,000 people surveyed, 40% said that their smartphone was the most important tool for making purchasing decisions.
Smartphones are taking over the country. Nearly 68% of all Americans own one (with a huge majority of those being an Android or iOS device). These statistics account for far more than just millennials, even if they are the most visible users.
In today’s car buying market, the information you give your customers on the go is more important than ever. You need software that can convert your showroom into a digital experience, and not all mobile marketing services are able to provide that kind of platform. Make sure you take that into account as you move forward in the digital age.
So, are you leveraging your solutions to connect with those mobile shoppers? And what are your thoughts about this trend?
The way that people shop for cars has changed. You know that. In fact, you’ve likely had a well-researched consumer walk into your showroom, armed to the teeth with information about the exact model he or she wants based on specifications, reviews, videos, and more found online. But what you may not have known is the answer to this question …
How do you build trust with that consumer to earn his or her purchase?
The answer to this question is vital. DME Automotive conducted a study last year that found 68% of automotive shoppers visited two or fewer dealerships prior to making a purchase. Furthermore, 80% of its respondents stated that they visited 10 websites during their process.
So, if all of this data relates to digital, what does this mean for you … in the dealership?
You need to provide the best experience when they decide to visit.
When the average consumer walks onto the lot of your dealership, this means that he or she chose your business as one of two stops (perhaps only one) after hours of research and visiting 10 different dealership websites. And you need to capitalize on that opportunity by providing the absolute best customer experience.
Here are five methods to build customer trust that will create the best possible customer service experience and earn the purchase …
You need to be you.
It’s absolutely vital that you are authentic. When many people think of salesmen and saleswomen at an automobile dealership, they picture a big suit and a fake smile. Don’t put on the persona of being a friend to the shopper; just actually be a friend by putting forth who you genuinely are and fulfilling the remainder of these five methods.
You must possess product knowledge.
It’s quite likely that consumers know more than you about the specific vehicle he or she has chosen. That’s not fault of your own—that’s the new reality of the car buying process. Consumers have focused on a single model, or even trim level. You need to make sure that your dealership has an appropriate training program in place for new hires, as well as any additional resources that help you and your colleagues demonstrate genuine knowledge of the products (vehicles) you sell.
You want to have conversations, not sales pitches.
A major part of having a conversation with someone is listening. Shoppers have a specific perspective, anxiety, and need about the product/vehicle or buying process, so it’s important that you’re with open ears even more so than with an open mouth. And it may prove difficult because, let’s be honest, you’re excited about the brand and about making the sale or fulfilling a service. But it’s about the consumer, who wants to talk about the cars on your lot or the service specials for a current vehicle.
Your brand—the dealership you represent—must have consistency.
The messaging to the consumer must remain the same. Being consistent is a primary component to establishing a truth because shoppers who know they matter to you with every interaction will yield incredible growth toward earning trust. But consistency goes beyond how you and a shopper interact:
- It’s about online presence, like web content and social media.
- It includes branding with logos and slogans.
- It applies to pricing and trade-in appraisals.
- It’s about the quality of service from all departments.
People want to know that you’re fair and trustworthy, and this consistency goes a long way to creating that feeling.
You need to make customers’ lives easier.
Whether or not you realize it, you’re in the solutions business. If you listen well enough (think of our #3 presented above!), you’ll have a better understanding of how to help them discover the choice of vehicle that best suits their needs. In service, send out reminders for an oil change or other routine maintenance that quickly slips to the back of one’s mind. Or send personal messages about specials or new model arrivals. Do what you can to reduce their time in the dealership and reach the right decision, and the best decision, sooner rather than later.
These 5 Methods Are Harmonious and Cooperative
You can’t successfully build trust without the total sum of these methods.
- You’ll never make a customer’s life easier without being yourself, having product knowledge, and engaging in a real conversation.
- You won’t be able to converse with a shopper without product knowledge or consistency.
Focus on refining these skills, and you’ll experience significant improvements on the overall perception of your dealership and your brand (your own reputation).
For further insights about the automotive industry, we encourage you to check out our other blogs. But first, we want to hear from you:
What actions are you taking that have demonstrated trust building with your customers?
As with all industries, technology changed the dynamics of managing an automotive dealership. Greater access to information on the Internet transformed how people shop—81% conduct online research before purchase. New software companies and applications help automate and account for various facets of the business, including inventory.
It has become imperative that general managers realize the importance of maintaining robust inventory content, especially for their used cars. That is—in no small part—due to the facts that selling used cars is often more profitable than selling new cars and providing ample content lends authority, which is recognized and rewarded by search engines.
So, what does it mean to create “robust inventory content”?
It’s important to know the basics of what people seek when they conduct their research. AdWeek highlighted a few key points for how consumers learn about your product (in this case: used car inventory):
- Reading clear product descriptions
- High-level overviews supplemented by details
- Multiple high-quality images
Assimilating these three points into your website’s content strategy will yield results with a myriad of benefits.
Robust Used Car Descriptions
You need to leverage keywords and relevant information that address a consumer’s query. For dealerships, this means including make, model, trim, specifications, features, technology, options, and warranty. By making these details simple to navigate and easy to read without sacrificing the necessary details that satisfy a potential customer’s questions, you will accomplish two things: first, you’ll become a resource people trust; second, you’ll address the correct verbiage to better rank in search engines.
Add high-quality images to create a better user experience, which will indirectly have a positive effect on your website’s authority and ranking.
But, why the emphasis on used cars?
There’s a huge market (real and potential) for selling late-model used cars. According to a Consumer Reports’ annual Car Brand Perception Study, two-thirds (65%) of people they surveyed said they are more likely to consider purchasing a used car as compared to several years ago. The survey also found that 71% were likely to consider a late-model used vehicle as an alternative to purchasing a new one.
Okay. So there are the people who may be a likely buyer of a used car. What may be more convincing are the actual numbers:
- In 2014, the total number of used cars expected to be sold was 41.2 million.
- CPOs (Certified Pre-Owned vehicles) were a driving force behind recent years’ surge of sales.
- In 2013, CPO models helped drive a dealer’s used vehicle profit margins to $2,361, which was nearly double what the margins were for new vehicles sold in 2012.
- In 2013, 2.1 million CPOs were sold.
Now, here is where data plays its part. If there’s anything you need to take away from this article, it’s the following:
- You should know what the biggest selling vehicles are in your particular market, as well as your historical record of make and model sales.
- You need access to real-time data that lets you know how to effectively and accurately appraise, price, and merchandise inventory.
The Perfect Tools for Used Car Inventory Content
MAXDigital’s Inventory Management Platform, formerly known as FirstLook, utilizes advanced analytics and decision making tools, guided by best practices, to generate faster turn and higher gross profits of your dealership’s inventory. This often proves most particularly helpful for used car inventory, which often does not receive the same sort of custom attention that new-year models enjoy (e.g. content team creating detailed pages dedicated to each model).
This Inventory Management Platform is your ideal tool for several reasons:
- It efficiently sources the best-selling vehicles in your market.
- It has an appraisal tool that helps you close more trade-ins and maximize gross profits by utilizing an incredibly accurate source of vehicle market data (61% of a dealer’s used car inventory come from trade-ins).
- It offers real-time market and wholesale data from the automotive industry’s most thorough and reliable data set, allowing you to appraise, price, and merchandise inventory from the desktop to your mobile device.
In addition to the Inventory Management Platform, you may also want to consider the advantages of our Marketing and Sales Platform:
One of its key functions, known as MAX Ad, automatically populates comprehensive information regarding features, options, specs, and more of each used model available in your inventory. So you will have a resource that automates plugging in the keywords and SEO-rich verbiage that will help you rank and fulfill a user’s query—allowing you to realize the potential of your used car inventory. With this information, it’s possible to turn your inventory quicker, which is demonstrated in this product’s proven ability to generate higher grosses; you also now equip your newest brand specialists with some of the finer key selling points for each model in your inventory.
For more information, we encourage you to contact us today!