The biggest change in automotive over the past few years has been in the way customers buy cars. Shoppers still go through the 5 stages of purchase identified by McKinsey & Company: 1) Awareness, 2) Familiarity, 3) Consideration, 4) Purchase, and 5) Loyalty. Somehow, while we were all watching, 3rd party lead providers snuck into the process and stole a whole bunch of customers from their client dealers.
Most of the early legwork done in the Familiarity and Consideration phases is now taking place online, not in the showroom. Customers are conducting early research online, and involving dealers much later in the process. Research tools provided by 3rd party lead providers are attracting customers in droves because they are driven by massive amounts of content and they provide an easy way for customers to compare vehicles and prices across different makes and dealers.
Relegated to the end of the buying journey, dealers are facing increased pricing pressure and greater challenges in brand building than ever before. True competitive advantage in the purchase phase is difficult to get and almost impossible to maintain. Savvy dealers are finding some success through effective digital marketing, yet they are still facing the competitive pressure created by engaging the customer so late in the journey.
Taking a cue from 3rd party sites
Typically, third party sources help the customer select a vehicle and begin to determine a price. Later,
as the intensity and depth of the research increases, dealers are pulled into the process via SEO, SEM, and effective dealership websites.
Maximizing these digital channels is now a key to driving sales. We believe every dealer should maximize these opportunities, especially since the advertising cost per sale is relatively small.
So where is the industry going and what should dealers do to have a competitive advantage today and tomorrow? Dealers can learn a lot from what is making the 3rd party sites (AutoTrader, cars.com, TRUECar, etc) successful.
The 3rd party sites are engaging prospects earlier in the buying cycle and assisting them through purchase. Quite simply, they win customers by giving them what they want in the Familiarity and Consideration phases. They offer strong content and great research tools which consequently creates authentic engagement. This engagement is carrying over into the purchase phase.
Ultimately, dealers are paying for these customers with low gross deals and fees to the 3rd party vendors like True Car, AutoTrader, and Cars.com. The 3rd party sites use dealership ad dollars to build the 3rd party brand which is designed to reach out to the consumer earlier in the buying process and convince the customer to stay loyal to them through purchase.
On the surface, the auto marketing solution to competing with the 3rd party sites for customer loyalty seems to be to create better dealership websites filled with great content and strong research tools. Yes, great dealership websites are needed, but alone they will not win in a head to head battle with 3rd party sites.
A single dealership or dealer group cannot compete with the ad spend, content generated or even the key words spend of a 3rd party site for buyers in the Familiarity or early Consideration phases. Once the customer is nearing the purchase stage, if they have not already decided to stick with their 3rd party research site through purchase then google will prioritize the dealers on location, content, traffic, etc. Still, the 3rd parties publish quality sites with very high traffic counts and strong customer engagement, so they will be there as well.
At Client Command, we’ve found that if a customer can be reached as they become aware of their
in-market status and then walked through the buying cycle with relevant messaging, it is possible to create a competitive advantage by eliminating competition from other dealers and 3rd party sites.
Tap the power of data
A tremendous amount of online and offline demographic and behavioral data exists and is available in the marketplace today.
Client Command uses the proven strategy to reach customers with relevant messaging as early as the Awareness stage, then leverage Personally Identifiable Information (PII) from dealership CRM and DMSs to profile in-market buyers as well as create buying profiles that can be used to target conquest customers.
Data pulled from these resources, combined with the vast amount of Personally Identifiable Information (PII), stored in dealership CRMs and DMSs, gives dealers the ability to profile in-market retained and conquest buyers and reach those buyers before they go to the 3rd party sites. Dealers using this approach can then reach prospects with relevant messaging as early as the Awareness stage.
By matching marketing efforts to new consumer shopping patterns, dealers will soon see stronger ROI through digital channels, and stronger sales in the showroom. We can’t wait to hear about your success!