21 Oct Marketing for Automotive Dealerships in 2020
The end of the year is upon us and dealerships are preparing for an uptick in sales. Still, it’s never too soon to start preparing for the next year. What should dealerships expect in 2020? How will marketing for automotive dealerships change in the upcoming year?
To find the answers, we must first look at what happened in 2019. We will also evaluate the latest automotive marketing trends for 2020. With these insights, you will be able to prepare a marketing strategy that crushes the competition.
What Happened in 2019?
Looking in the rearview mirror helps us to establish a game plan moving forward. It’s the only pathway to true success. What we see in 2019 provides the springboard for creating a well-thought-out strategy.
Car sales for 2019 are expected to finish at more than 16.9 million. That would be the first time since 2014 that they fell short of 17 million. While it is still strong by historical standards, there is plenty of room for improvement.
In 2016, US auto sales reached their peak at 17.55 million vehicles. Since then, the decline has been steady each year. Still, economic conditions are favorable for auto sales and the demand remains high.
New Car Sale Trends in 2020
For 2020, Cox Automotive predicts that U.S. auto sales will continue to decline, this time to 16.5 million. This is due in part to an increased demand for used vehicles as the consumer tries to save money. Interest rates play another factor and they don’t continue to trend favorably. The rates will continue to rise over the past few years and consumers aren’t happy.
The most significant factor behind the decline of new car sales is the used car market. Vehicles are lasting longer than ever before, so owners are more reluctant to turn it in for a new car. This only lengthens the trading cycle, creating less of a demand for new vehicles.
Used Car Sale Trends in 2020
The good news is that with new cars sales plummeting, the used car business is continuing to pick up. Americans are more interested in buying used than looking at the new car incentives. Edmunds predicted record used car sales figures in 2019 and those figures continue into the new year.
The amount of new cars available due to off-lease turn over continues to increase, giving the consumer more options. With the certified pre-owned options offered from auto dealers, customers see a way to cash in on the savings without sacrificing reliability.
Increase in Technology for 2020
The biggest game-changer is the introduction of new technologies for 2020. Car brands continue to release updated technology in hopes of luring in customers. Still, many car dealerships continue to worry about ride-sharing and subscription services, but these don’t really pose a threat.
People aren’t forgoing owning a vehicle because of ride-sharing. In fact, 60% of the people using these services would have utilized public transportation if they had not hailed a ride. This includes walking or riding a bike. While the services are dense in urban areas, they aren’t taking over anywhere else.
Furthermore, subscription services have gained plenty of attention, but they aren’t a threat either. With this plan, drivers pay a monthly fee to access vehicles without getting locked into contracts. At this time, these plans are only limited to a few cities and aren’t practical for most Americans.
So, if these innovations aren’t changing why people buy cars, what is?
Rise of the Internet
The Internet has changed everything related to car buying. 95% of car buyers use digital sources to find information. This puts the customer in the dealership for a much shorter time. They only need to visit once they are prepared to make a purchase.
These statistics prove that dealerships have less chance to attract customers and win them over. That’s why every interaction must be taken advantage of. Your marketing strategy must play on the latest trends if you want to succeed.
2020 Digital Marketing Trends for Car Dealers
Before you can plan for your marketing for automotive dealerships strategy, you need to be aware of what to focus on. Digital marketing continues to grow at alarming rates, so it’s often challenging to keep up with what’s coming. At AimLogic, it’s our job to stay informed. That’s how we remain prepared for what’s around the corner.
To stay ahead of the competition, you want to review these dealership marketing trends for 2020.
1. Larger Emphasis on Micro-Moments
It’s only been a few years since the concept of micro-moments was introduced by Google. Since then, we’ve seen these decision-making moments change the way the consumer buys a vehicle. Every moment is a chance to influence the decision-making process. Your digital marketing moments occur on phones, connected-home devices and smartwatches these days.
Some OEMs recognize the importance of these micro-moments and now mandate that dealers implement strategies to enhance their automotive marketing.
Tracking the success is the key. Dealers must have adequate conversion tracking, a strong account structure and complex attribution model to achieve the most visibility in the micro-moment funnel.
2. Increased Visual and Voice Searches
In 2020, it’s estimated that half of all searches will be voice searches. Among those, 30% will be performed without a screen. New technologies continue to change visual and voice searches. Because of this, you must change your paid search and SEO strategies.
A voice search is conversational. That’s why it requires the use of more long tail keywords, while visual searches require more upkeep of the website metadata. Either way, technical SEO experience is required, so how do you make sure that your dealership continues to receive web traffic?
3. Decrease in Conventional Ad Budgets
With the digital audience reaching closer to 100%, traditional ads require less attention. It no longer makes sense to have a large conventional ad budget, which is why dealerships are allocating funds elsewhere.
It’s no surprise that the majority of ad spending should go towards social media and email marketing in 2020. Any strategy toward marketing for automotive dealerships must have these avenues as the most significant focus. Platforms such as YouTube and Facebook can no longer be ignored.
In fact, it might sound like we are a broken record as we talk about automotive digital marketing, but we can’t tell you enough.
4. Monitoring Website Activity
61% of new and used car shoppers contact the dealership after a search, but how many go back to your website after the contact? How are you monitoring this activity and implementing the data?
With less foot traffic at the lot, you need to shift the focus to your website. This is where the digital footprints are. For most people, browsing occurs more than one time.
By creating a customer-centric experience, you must know who your customers are. That involves knowing what inventory they are looking at and what they are interested in. As you get in touch with your target audience, your dealership starts to separate from the pack.
5. Proactively Monitoring Reviews
There is nothing more important than your online reviews. In 2020, they are going to continue playing an active role in how much consumers trust you. You must implement reputation management if you hope to succeed.
Reviews and star ratings have become one of the most important factors consumers look at. If you plan to impact the micro-moments during car-buying, you must improve your rating. Even the four-star dealers stand to lose sales in 2020.
Don’t ignore a bad reputation for one more minute. It will come back to bite you later.
6. Personalized Communication
Your dealership’s main focus in 2020 needs to be on personalization. Studies show a 30% higher close rate with personalization. This goes beyond simply putting the customer’s name at the top of an email. That’s not personalized at all.
The thing is, your customers expect personalization in 2020. Why do they expect it? Because that’s what they receive in other industries, so automotive marketing shouldn’t be any different. If your sales and marketing communication doesn’t speak directly to the consumer, your efforts fall short. It’s time to get rid of the email marketing platforms and autoresponders that use bots or canned responses.
Instead, you must think as Amazon does. It’s time to create personalized, dynamic communication that increases engagement. When you customize your follow-up emails correctly, the sales team productivity begins to soar.
What Your Dealership Must Do in 2020
What have we learned thus far? Let’s do a quick recap.
- Used car sales continue to increase.
- Prices on used cars continue to drop.
- New car sales stand at a plateau.
- Car buyers conduct the majority of research online.
- Dealers receive less face time with the consumer.
- Each interaction is more critical now than ever before.
What should your car dealership do with this information? Let us share our best practical tips to market your automotive dealership in 2020.
1. Upgrade the Reconditioning Process
As used vehicles continue gaining more popularity, your consumers will invest more in a vehicle that’s branded “like new.” If your reconditioning is done properly, you can earn a lot more profit. Spend $1,000 on reconditioning done right and you receive a high ROI.
vAuto shares five pointers to improve your used vehicle reconditioning process. Among their tips include carefully choosing the used cars and mapping out the exit strategy. You also want to create an auto-approval for certain parts and watch for ways to reduce the costs.
With the right steps implemented, you can advertise more “like-new” vehicles to your consumers.
2. Dive Into Technology
Whether you are ready or not, the information age is upon us. You can no longer prolong your digital marketing efforts and achieve success. Consumers understand the internet better than anyone and they use it to their advantage.
Not only do they know exactly what to pay for a vehicle, they know where to get it from. Dealers who want to capture this market must post more content online. The additional value offered helps the dealership gain credibility as a leader in the industry.
For example, it’s wise to implement features such as integrating the Kelly Blue Book values with your used vehicles. When you share this with the customer, they immediately trust you. Furthermore, they instantly see that your prices align with KBB values.
3. Learn More about Your Customer
When Ford decided to get rid of its cars, it wasn’t a haphazard decision. The truth is, they understand what the customer wanted and they continued to change in response. When they made the announcement, it didn’t shock anyone.
If the dealerships could learn to listen to their customers the same way, they would see favorable results. By utilizing today’s technology, you can pay attention to what your customers want. Use tracking software to find out what website visitors are looking at and what appeals to them. Then, you can identify what should be on your lot and what you can get rid of.
4. Make Decisions Driven by Data
Dealerships must take advantage of today’s technology to make better decisions. With clear-cut data in front of you, it’s simple to make the next choice. Market insights prove to be more valuable than ever before, especially as a smaller dealership.
You must adjust with the market and price your vehicles accordingly. Everything you do must be driven by data, not your gut feelings or emotions. With the help of an automotive digital marketer, you will have the data and information needed to make the next right decision.
5. Use Private Messaging Apps
WeChat, WhatsApp, Viber and other smartphone messaging apps are already growing in popularity. For 2020, companies must shift their focus to start utilizing this technology. It’s becoming more valuable than emails with some consumers.
Some brands have already monetized the messaging apps and it won’t be long until the customers start paying for products directly through the app.
6. Hyper-Targeted Advertising
There’s nothing more annoying to a consumer than an online ad that has nothing to do with their circumstances. Not only will they ignore these ads, but they might be turned off from the product entirely. On the other hand, people genuinely enjoy great content that matters to them.
If your dealership consistently sends out tailored messages, you will see an extreme response to your company. This requires that you adequately target your audience so only the appropriate viewers see your ads.
7. Complete Transparency
If you produce transparent and simple information for your consumers, they are more likely to read it. Along with this, you must be completely open about how you handle your customer’s private information. Consumers want to know what is happening with the data.
In the future, there will be more emphasis on what kind of information is shared during the promotion of your brand. By being upfront with customers, you gain their trust and earn a better reputation.
Other ways to improve your transparency:
- Determine your core values.
- Don’t make selling your only goal.
- Be completely open with your customers.
- When your customers have a concern, respond to them immediately.
- Take constructive criticism and learn from it. Always respond in a thankful, friendly tone.
- Always ask for suggestions and feedback from your customers. Then, use the information to improve.
Why Dealerships Need Digital Marketing in 2020
After learning about all upcoming trends, you might think that your dealership can handle all of your marketing needs in house, but that’s not always a wise choice. First of all, you probably face a large turnover, just like most dealerships do. Do you have the resources, time and energy to train new people consistently to handle your marketing needs?
Furthermore, your in house staff might not have the experience and expertise that a digital marketing team does. In fact, automotive dealer marketers spend all of their time immersed in new advertising avenues and research. Digital companies, such as AimLogic, know what’s coming down the pipeline and understand how to change the strategy when needed.
It’s not impossible to handle your digital advertising with your existing workforce, but you receive a higher ROI when you deal with a team that lives and breathes automotive advertising. Hiring an advertising firm is like having more employees that you don’t need to train or monitor.
Marketing for Automotive Dealerships
If you operate a dealership, you must stay on top of the current marketing trends in order to succeed. You want to know what the future holds and how you can come out on top.
The best thing about using a dedicated automotive marketing agency is that they only focus on car dealerships. By saturating themselves with the information that matters in your field, they are more prepared to help you. Most advertising agencies deal with hundreds of niches, making it impossible for them to understand what’s happening fully in any one of them.
Just like Amazon, you must personalize your communication, stay active on social media and implement video marketing in order to stay in front of the consumer. Choose a company that has the innovative tools you need to bring customers through the door.
When you form a quality partnership, you get someone that understands what you need. Learn how to increase sales through marketing for automotive dealerships in 2020 by choosing a qualified partner today.