Posts by CarGurus Admin
1,144: that’s the magic number for Carbase, the family-run used car supermarket with branches in Bristol, Weston-super-Mare, Lympsham and Brent Knoll. It refers to the number of cars it strives to sell every month – mirroring the record set in March 2019.
Carbase aims to achieve this target by focusing on trust, transparency, and fairness – the values laid out by Managing Director Steve Winter when he established the company in 2003.
The used car market is one of a long list of sectors that have been upended by the internet, and the dealers with the best-run and most profitable operations are those that embrace it. According to CarGurus’ One Voice report, 73.2% of used vehicle retailers have adopted digital strategies to boost their businesses.
The savage supply and demand issues at play in the used car market have increased pressure on margins, and we’ve talked before about just how hot the competition is for good quality second-hand vehicles.
It’s no surprise, then, the research we conducted as part of our One Voice report revealed 43.8% of used car retailers were seeing their margins decrease – significantly more than the 25% reporting an uptick – and there is a number of reasons for the squeeze.
It’s absolutely no secret that retailers have turned their attention to the used car market over and above the new car market. After five years of growth and a record-breaking 2016, new car registrations turned on their heels and fell by 5.7% and 6.8% in the successive two years, which steered retailers toward what continues to be an exceptionally strong second-hand vehicle market.
The trouble is that used cars have been hot property for a long time; prices are extremely strong, the trade can’t get enough of them, and even in the wake of previously strong new car sales, competition is so fierce for quality second-hand stock that it’s proving ever trickier to procure. That’s great news for auction companies, less so for trade buyers and, in short, it’s the perfect storm of supply and demand.
Why existing customers are a good bet
Repeat business is a sign that you’re getting things right, regardless of whether you’re selling cars or chocolate, but spotting the opportunity for a next-time vehicle sale is harder than it used to be. Physical interaction with dealerships is falling, and the dealership visit is typically the last leg of the buying process for most customers, who aren’t likely to come sniffing until they’ve done plenty of homework.
That applies to all customers, but those with whom you’ve already done business represent excellent opportunities to boost sales. You already know each other and you have past experience of their preferences and buying habits, which you’re well placed to exploit. For example, a customer’s existing finance contract presents a window into the timeline for their next purchase. There’s no sense in hassling them when they’re not in the market for a new vehicle, though, so it’s important to understand and identify when they are.
It is, however, quite possible to do so, courtesy of some joined up data – and the good news is that it can be done with most stock dealer management systems.
Know your customers’ digital route
In today’s digital age, there is almost no end to the amount of information customers can find online during their shopping process. Yet, the majority of buyers still visit showrooms to test drive vehicles and make a purchase.
To be able to reach these shoppers early on and steer them to your showroom though, you must first understand their digital journey—and analytics help make this possible. Whether a customer visits a manufacturer website, social media profile, third-party shopping site, or something else, analytics allow you to keep tabs on their digital footprint. When you tap into that information, you’ll be able to understand exactly how customers have made their way to your dealership’s website—and from where—so you can begin to tailor your messages accordingly and drive more traffic to your forecourt.
Monitoring website performance is the cornerstone of your digital marketing strategy
Your website is the lifeblood of your business, and most of your digital marketing efforts likely revolve around ways of driving people towards it. In fact, according to Hubspot’s latest State of Inbound report, 54% of companies say driving more website traffic is their current marketing priority.
That’s a laudable aim. But for car dealers, as with all businesses, driving extra traffic is only useful if your website meets both visitor expectations and business ambitions. Nearly 40% of people will stop engaging with a website if they don’t like its content or design.
By monitoring a few key metrics, readily available on Google Analytics, you can more accurately measure the performance of your website and tweak it to be more user-friendly, compelling, and productive. Making this a continual process of improvement sets great dealers apart and creates the foundation for success—digitally-savvy small businesses are five times more likely to increase profits and operate more efficiently than less advanced competitors.
With that in mind, here’s what you need to know.
Increasing sales and measuring ROI in a digital world
In an increasingly competitive market, dealers need to look closely at how potential customers are moving through the car buying process. With shoppers interacting with an average of 24 touch points before purchase, 71% of which are online, it may make sense to work with a digital agency that knows the industry inside out.
As shoppers become increasingly digital, dealers must work harder than ever to connect with people before they even set foot in the showroom. Digital marketing is now the best way to reach a wide selection of shoppers as they move through the buying journey.
We spoke to automotive marketing expert Vikki Little who runs Feisty Consultancy. She has more than 20 years’ experience working with dealers and understands how to make a partnership work. She says, “Working with an agency that specialises in the automotive industry offers car dealers significant benefits, as they have a team of marketing experts who have experience in and understand this sector.”