Memorial Day is filled with perks and incentives. This holiday signifies the start of summer sales, but even with incentives and a strong economy, dealers are still struggling to get customers into showrooms. Here to talk more on the subject is Brian Moody, Executive Editor at Autotrader. Moody discusses a variety of ways in which dealerships can entice consumers into the showroom throughout the summer, and gives feedback and perks that are important to highlight for interested customers. To learn more about these strategies and how to best capitalize on summer incentives watch the full interview.
VIDEO TRANSCRIPT:
Jim Fitzpatrick:
Hello everyone, I’m Jim Fitzpatrick. Thanks so much for joining us on another addition of CBT News. In preparation for Memorial Day weekend sales, dealers roll out new perks and incentives in May to try and get attention of car shoppers. This year is no different. But there are a few industry trends to watch out for that might impact consumer shopping behaviors. Here to tell us how your dealership can get buyers into the showroom this Memorial Day weekend is Brian Moody, Executive Editor at Autotrader. Brian, welcome to CBT News.
Brian Moody:
Hey, thanks for having me, yeah.
Jim Fitzpatrick:
Sure. So let’s kind of jump right in. With Memorial Day around the corner, what trends on segments or vehicles can dealers expect to attract dealers, or consumers rather.
Brian Moody:
Well, yeah, it’s a good question. And what continues to be true is what’s been true for a while now. Trucks and SUVs continue to be popular.
Jim Fitzpatrick:
Yeah, right.
Brian Moody:
Now that’s not to say that no one’s buying sedans. That’s kind of a myth. People are still buying sedans. In fact, all sedans taken together represents hundreds of thousands of vehicles, so it’s still a significant segment. But it seems like the buzz and the trends are going toward trucks and SUVs, especially crossovers, and that’s what people want.
Jim Fitzpatrick:
Sure.
Brian Moody:
So that’s what I’d stock up with.
Jim Fitzpatrick:
Sure. We had a dealer that we spoke to yesterday on air, and he said that he saw a trend in the used cars side selling more vehicles than SUVs and trucks.
Brian Moody:
Sure.
Jim Fitzpatrick:
Have you seen anything like that?
Brian Moody:
Sure. And I think one of the reasons is is that we know that the average transaction price for new cars is up quite a bit.
Jim Fitzpatrick:
Yeah, it’s unbelievable.
Brian Moody:
Past $35,000, depending on what your source is. That’s a lot of money,…
Jim Fitzpatrick:
It is, yeah.
Brian Moody:
…especially for the average family. Especially when you consider we’re at kind of a cutoff right now in terms of technology, both convenience technology and safety technology, where a two year old car is going to be a significant discount but might still give you all of those, the consumer, the things that they really want. So I would say having those cars there, those used sedans with the latest features, is another way. Because then you have to have something you can steer them to. “Yeah, 50 grand for this new, full-size SUV.”
Jim Fitzpatrick:
Right.
Brian Moody:
“Okay, what about this that has the same technology but is going to be $10,000, $20,000 less expensive.”
Jim Fitzpatrick:
That’s right. And I think it’s important to mention that for new car sales people on the new car showroom floor, always give that option to the customer, that you just mentioned, before the customer ends up leaving. Because you may just do your follow-up work to see what the customer, if they’re still in the market and they say, “Oh, we bought a used car.” “Well I showed you a new car because you came into the new car showroom. I didn’t know you were open to a preowned vehicle.”
Brian Moody:
Right.
Jim Fitzpatrick:
Right?
Brian Moody:
It’s a good question to ask right up front because if someone’s looking for a certain piece of technology, and I’ll just name a few that I think are significant, Apple CarPlay, popular.
Jim Fitzpatrick:
Yeah, it’s very popular. Very popular.
Brian Moody:
Forward collision warning and mitigation, meaning it will intervene and prevent an accident.
Jim Fitzpatrick:
Right.
Brian Moody:
If you know you have some sedans, one, two, three years old, that are less expensive and have that, bring it up, steer them that way.
Jim Fitzpatrick:
That’s right.
Brian Moody:
Because they’re still going to get what they want.
Jim Fitzpatrick:
That’s right.
Brian Moody:
But you might be able to make the sale a little easier at $20,000 versus $45,000.
Jim Fitzpatrick:
We’re seeing the used car market really flourish. We see, obviously, the new car saw a drop a little bit. But supposedly used car sales are still on fire. Should dealers be looking for ways to emphasize that side of the business even more, including CPOs?
Brian Moody:
Right. I think CPO is a great way of getting customers into the showroom that you might not normally have had.
Jim Fitzpatrick:
Right.
Brian Moody:
And here’s the perfect example, luxury vehicles.
Jim Fitzpatrick:
Yeah.
Brian Moody:
There’s lots of people that just simply can’t afford a new Lexus or a Porsche. However, certified preowned… And those two programs, by the way, are excellent.
Jim Fitzpatrick:
Right.
Brian Moody:
You get them in the showroom, now what do you have? An opportunity to earn a new customer for life, an opportunity to give them amazing service and get them the car that they didn’t think that they could afford. That’s really powerful in terms of building a lifelong customer base.
Jim Fitzpatrick:
Yeah, for sure. For sure. Are there any specific features that dealers should highlight ahead of the weekend?
Brian Moody:
I think technology and electronics features like Apple CarPlay, Android Auto are good ones to have. I think some of the safety features that you see coming up on cars are important. But they’re also difficult to comprehend, so the average person may not be buying a car based on safety. But highlight that for them. I think safety features, I think niceties on non-luxury cars, so heated and cooled seats or those kind of things. If you have those features, it’s a place that you can steer new car shoppers.
Jim Fitzpatrick:
Right.
Brian Moody:
Maybe you’re going to make a little bit more money.
Jim Fitzpatrick:
Yeah.
Brian Moody:
And they’re going to get what they want.
Jim Fitzpatrick:
That’s right. And we all know that, you pointed out, you’re going to make more money probably on a used car than you are a new car because you’re chasing that deal to the bottom with other dealers competing for the same deal.
Brian Moody:
Exactly right. And if you have something used that’s very compelling, with the latest features, why not?
Jim Fitzpatrick:
That’s right.
Brian Moody:
They’re going to be happy and you’re going to be happy. That’s the best of all worlds.
Jim Fitzpatrick:
Yeah, for sure. So what advice would you give to dealers overall to get the most out of the Memorial Day weekend sales? It’s a big weekend. It really kicks off the summer selling season, doesn’t it?
Brian Moody:
Yeah. Park a Jeep out front.
Jim Fitzpatrick:
What do you mean by that?
Brian Moody:
Just because people just love Jeeps. Just get a Wrangler and park it out there.
Jim Fitzpatrick:
Right.
Brian Moody:
That’s the kind of stuff people love.
Jim Fitzpatrick:
Right.
Brian Moody:
If you don’t have one of those, trucks and SUVs,…
Jim Fitzpatrick:
Go buy one and put it out.
Brian Moody:
… go buy one and put it out front, yeah. Because they transact at a high price.
Jim Fitzpatrick:
Yeah.
Brian Moody:
People want them. They’re desirable, they’re cook, they’re unique.
Jim Fitzpatrick:
Right.
Brian Moody:
And people are buying these things not because they necessarily need them, but because the picture themselves as the kind of person who needs a full-size pickup or whatever.
Jim Fitzpatrick:
That’s crazy.
Brian Moody:
So get a Ford F-150, get a Jeep. Put those out front.
Jim Fitzpatrick:
Right.
Brian Moody:
And if those aren’t the ones that you end up selling, fine. At least you got the people in because they’re like, “Well what’s that? I want to get one of those.”
Jim Fitzpatrick:
Right. And it’s kind of that eye candy that a consumer gets in and then he goes, “Okay, let’s get the… Oh my god, this incredible truck.” You’re 20 feet off the ground.
Brian Moody:
Right.
Jim Fitzpatrick:
And meanwhile the wife goes, “Come back to Earth, honey. We’ve got three kids and they’re all under the age of four. What are we going to with this?”
Brian Moody:
Right. And these days, the way that it might work these days is that maybe the husbands saying, “You can’t get that because we need to do these things and tow and all that.” But I would say put those SUVs, those Jeeps and pickups out front. And then what they buy is what they buy. But I think you’re going to get them in.
Jim Fitzpatrick:
Sure. From your perspective at Autotrader, and you’ve got obviously a tremendous amount of data there. And I don’t know if you track this or not, but what are some of the top reasons that a consumer leaves a showroom and doesn’t do business with that particular dealer, doesn’t transact a car?
Brian Moody:
Well, I think a lot of the reason don’t, unfortunately, don’t have much to do with that dealer at all.
Jim Fitzpatrick:
Okay.
Brian Moody:
Didn’t understand the process, didn’t do their research ahead of time, didn’t know their credit score. These are all things that we advise consumers to do before you get there.
Jim Fitzpatrick:
Right.
Brian Moody:
A lot of times consumers say, “Well, yeah, but won’t the dealer be upset that I…” No, no, no. They want you to be as educated as possible so that once you get there…
Jim Fitzpatrick:
You’re ready.
Brian Moody:
… we’re ready to go.
Jim Fitzpatrick:
That’s right.
Brian Moody:
And I think sometimes they leave because they didn’t understand how the process was going to go. There are, I guess, certain circumstances where you didn’t have the exact color that they wanted. But that’s what’s selling is for. You get them into something that’s going to be a little bit of a discount and it didn’t have the sunroof and the red color. But that’s okay.
Jim Fitzpatrick:
And I would suppose also customer experience in some situations where maybe they left because of something the sales person did or didn’t do.
Brian Moody:
Right.
Jim Fitzpatrick:
That human element in there, that, yeah, it was the right car, it was the right price, everything was right but just didn’t click, wasn’t on the same page as the salesperson and felt as though, “We got to get out of here for that reason.”
Brian Moody:
I agree with you, but on the other hand, that really ultimately is up to the consumer to say, “Hey, listen, is there any way I could talk to somebody different?”
Jim Fitzpatrick:
Yeah.
Brian Moody:
Because just like in life, you meet people all the time where you’re like, “I like this guy.”
Jim Fitzpatrick:
Right.
Brian Moody:
And then you also meet people where you’re like, “Ah, I don’t think so.” And that’s okay.
Jim Fitzpatrick:
Right.
Brian Moody:
But don’t leave. Ask to do something different or ask for a different situation. And I think a lot of times consumers don’t know that they can do that.
Jim Fitzpatrick:
That’s right.
Brian Moody:
And so, again, they’re leaving for things of maybe they weren’t as educated as would have been ideal.
Jim Fitzpatrick:
Right. Do consumers today want to do the majority, if not all, of the purchase process online? Or are they still, “No, we want to go into the showroom”?
Brian Moody:
I think a lot of people, and this is what we’ve been finding at Autotrader, a lot of people want to do some of the experience online.
Jim Fitzpatrick:
Okay.
Brian Moody:
They, for the most part, no surprise, don’t like negotiating. Most. So do. But most don’t. But they still want to have the experience of being there in the showroom, seeing… Listen, this is a big, moving, dynamic, cool thing, and most people are saying, “I want to have that experience, but I might want to get the process started a little bit earlier at home. I want to do my research. I might want to be approved for funding or for a loan and I might want to have the price knocked out before I get there so that I can spend less time, still get the car I want, and focus, when I’m at the dealership, on the cool stuff.
Jim Fitzpatrick:
And I think, in some cases, you don’t have that level of embarrassment to say, “Well, I’m looking for a $40,000 car. My last car was $15,000. I don’t know if I qualify for this.” If I can get that out of the way, to your point, online first, so I know when I walk into the dealership the guy’s not going, across the showroom, go, “Hey, sorry, you’re turned down.”
Brian Moody:
I agree, yeah. Yeah, or over the loudspeaker.
Jim Fitzpatrick:
Or the loudspeaker, right.
Brian Moody:
“Mr. Jones, you’re not approved for…”
Jim Fitzpatrick:
The guy in the green jacket.
Brian Moody:
Right, “You’re not approved for financing.”
Jim Fitzpatrick:
That’s right.
Brian Moody:
But the advice I would give to sales people that are interacting with consumers and potential customers via phone, via email, encourage them to do the research before they come in. And I think a lot of times people leave, to your previous question, because they’re embarrassed.
Jim Fitzpatrick:
Yeah.
Brian Moody:
And you can eliminate all of that by going to a place like Autotrader, there are many others, and do that work ahead of time. And then you show up and you eliminate the uncomfortable part.
Jim Fitzpatrick:
And that’s what it’s all about.
Brian Moody:
Yeah.
Jim Fitzpatrick:
Just making it more comfortable for that consumer to do business at your dealership, right?
Brian Moody:
Yes, exactly right. Yeah.
Jim Fitzpatrick:
That’s what consumers want.
Brian Moody:
Yeah.
Jim Fitzpatrick:
Yep. Brian Moody, Executive Editor at Autotrader, thank you so much for joining us here in the studios to talk about Memorial Day weekend.
