Yes, even in the current market, you can and should still steal more market share and sell more cars. Read more to learn how:
Take advantage of dying brand loyalty
Shoppers are not nearly as loyal to brands as they used to be. Currently, only 52% of those planning to buy a car in the next year say they would prefer to purchase from a brand they’ve already bought from, and only 41% rank brand as a “top priority” (Morning Consult). This means that for the majority of car buyers, brand is not at the top of their priority list, and they are likely to be open to comparable options from various manufacturers.
According to the most recent data from IHS Markit, while brand loyalty was down last year, body style loyalty was up, reaching 55.5%. This shows that consumers are more focused on the type of car rather than the brand. If you offer a similar model to that of your competitors, many of their customers are fair game. With brand loyalty on the decline, make sure you are showing shoppers that you have the type of car they’re looking for, and they are more likely than ever to come to your lot instead.
Steal customers from neighboring dealerships
More than likely, your dealership is not the only one in the area. In 2021, a total of 16,676 light-vehicle dealers in the U.S. sold 14.9 million vehicles (NADA). With an average of over 300 dealerships in each state, it is likely that you are surrounded by competition–both from same-brand dealers and different brands altogether.
The good news is this means more potential customers for you. Picture this: new car shopper Sharon looks online and determines she wants an SUV. Historically, she has always purchased from Brand X, so that is where she looks first, but they don't have any stock online. Discouraged, she leaves Brand X site and sees that your dealership, selling Brand Y, actually has the exact kind of SUV she is looking for, but just a different brand. At this point, she has a decision to make: wait for her usual dealership to have the Brand X SUV she wants in stock, or buy the comparable Brand Y SUV from your dealership and get it right away. In many cases, people don’t want to wait, and will buy an alternative from a dealership with more available stock.
Market your entire inventory, pre-owned and new
Want more inventory to sell? Focus on both new and used cars. With new vehicle inventory declining, buyers who enter the market initially looking for a new car often end up having to consider a used one instead. Over the last 30 days, ZeroSum data indicates that 1.4 million used cars were sold, compared to only 688 thousand new cars. Often, by the time a customer reaches the lot, the car they were looking at is already sold, and they have to consider other options.
By marketing, and therefore increasing your turn rate on new vehicles, you will increase your manufacturer allocations, giving you more to sell. As a result, it is extremely important to market both your new and used inventory. Since used cars have more unique information, used vehicle ads perform better than new vehicle ads.
Reach the right people at the right time
Many shoppers have stories similar to the one above. However, not all of them will simply stumble upon a different dealership while driving down the road and choose to buy from there. Make them come to you by being in the right place at the right time and showing them you have what they’re looking for in stock.
The easiest way to do this well is to focus on inventory-based advertising. When customers are ready to buy a car ASAP, and they are served an ad of what they’re looking for in their area, they are much more likely to purchase than if they just see a general ad for a dealership. This can be accomplished in several ways: