In 2024, franchised new car dealerships face many challenges to their operations. The automotive sales landscape is more competitive than ever, from economic uncertainties to shifting consumer behaviors to rapid technological advancements.
We recognize that dealerships must adapt and innovate continuously to thrive in this environment. This article draws on the success stories of leading dealerships to provide actionable strategies. These strategies are about navigating difficulties and boosting sales and profitability, by enhancing customer experience, adopting a data-driven approach, and expanding financing options.
Actionable Strategies to Boost Sales
Upgrade Customer Experience
A dealership can streamline the buying process through digital tools to reduce customers’ time and effort in purchasing a new car, which includes offering online pre-approval for financing and enabling customers to complete paperwork digitally.
Additionally, having well-trained staff who can efficiently and courteously guide customers through each step can enhance overall customer satisfaction. Employing an appointment-based system to manage customer flow can significantly reduce wait times.
Expand Financing Options
Partnering with multiple financial institutions can provide more flexible and competitive financing options, making it easier for customers to purchase vehicles. To further expand its customer finance options beyond traditional partnerships with local banks and credit unions, a dealership can explore several innovative approaches:
Online Lending Platforms: Partner with online lenders for quick, flexible financing and instant loan approvals.
Buy Here, Pay Here (BHPH) Programs: Offer customers with less-than-perfect credit in-house financing.
Subscription Services: Provide vehicle subscriptions that include maintenance, insurance, and other services for a monthly fee.
Peer-to-Peer Lending: Facilitate loans from individual investors through P2P lending platforms.
Lease-to-Own Programs: Allow customers to lease with an option to purchase at the end of the term.
Integrate Data Effectively
Customer Relationship Management (CRM) systems that track customer interactions and preferences can provide valuable insights into buying behaviors and trends. Analyzing this data can assist dealerships in refining their marketing strategies and better targeting potential buyers.
Predictive analytics is another powerful tool that can anticipate customer needs and preferences. By analyzing historical data and trends, dealerships can predict which customers will likely be in the market for a new vehicle and tailor their marketing efforts accordingly.
Leverage Digital Tools
A robust online presence is crucial for driving sales in today’s digital age. Accordingly, dealerships should invest in effective digital marketing strategies, including:
Search Engine Optimization (SEO): Optimize your website for search engines to improve its visibility in search results, drive organic traffic and attract potential buyers.
Social Media Marketing: Use social media platforms to connect with potential customers, build brand awareness, and drive engagement. Focus on platforms where your target audience is most active.
Video Marketing: Create engaging content to showcase new car models, features, and benefits. Use live streaming for virtual tours, Q&A sessions, and showcasing new arrivals.
Email Marketing: Nurture leads and stay connected with customers by personalizing email content to address different customer segments’ specific needs and preferences. Develop drip marketing campaigns.
Online Reviews and Reputation Management: Positive reviews significantly influence potential buyers’ decisions. Respond to all reviews, both positive and negative, professionally and courteously.
Pay-Per-Click (PPC) Advertising: PPC advertising can reach potential customers through targeted ads on search engines and social media—target users who have previously visited your website but did not purchase.
Influencer Partnerships: Partner with influencers to expand your reach and build credibility. Collaborate with local sports celebrities to enhance your dealership’s visibility.
Create a Virtual Showroom
Dealerships should consider investing in high-quality 3D modeling and virtual reality (VR) technology, allowing customers to explore vehicles interactively from home. Integrate each car (including used) model’s high-resolution images and 360-degree videos with comprehensive descriptions, specifications, and comparison tools to aid decision-making. Regularly update the virtual showroom with the latest models and offers.
Summary
Successfully navigating the challenges faced by dealerships in 2024 requires a multifaceted approach that embraces digital tools, enhances customer experience, adopts data-driven strategies, and expands financing options. But it doesn’t stop there. The evolving automotive market demands continuous adaptation and innovation. Your role, as a dealership professional, in driving these changes is crucial. By doing so, you can lead the dealership to overcome obstacles and thrive in a competitive landscape. Continuous adaptation and innovation, driven by your efforts, are the keys to sustained success in the evolving automotive market.
