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Jared Hamilton
From: Jared Hamilton
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2019: A Year of Demand for Dealers

If there’s one word that looks like it will define 2019, it’s “demand.” Consumer demand for new or used vehicles is expected to be down, potentially delivering a second year of lower sales in North America. At the same time, growing demand for trucks and SUVs, decreasing interest in cars and growing prevalence of alternative powertrains came to a head in 2018, driving fundamental automaker changes to production plans and product lines that will be felt in 2019 and for decades to come.

These trends, in turn, demand a strategic response from dealers that want to ensure sustainability and profitability in 2019 and beyond. With sales down, margins squeezed, products changing and consumers evolving, “business as usual” risks no longer delivering the usual results in 2019.

For the “Year of Demand” in 2019, consider responding with efficiency, adaptation and experience:


While efficiency is a dealer’s friend in the best of times, it’s during tightening markets where it truly becomes a critical competency. Too many dealers mistake cutting costs for efficiency, especially when they’re trying to do the same thing the same way while spending less.

Take customer acquisition, which is the lifeblood of any dealership. Marketing costs are a constant source of irritation and pain for dealers, especially in the traditional “spray and pray” model that often defies trustworthy ROI calculations. It’s tempting for dealers to shave their marketing spend, reducing frequency or thinning out channels to save a few dollars month-to-month and improve their bottom line in the short term.

With the same number of competitors chasing fewer customers, this is exactly the wrong way to go about finding efficiencies in marketing and reducing acquisition costs. You’re not changing the fundamental number that drives profitability, which is your advertising cost-per-sale. Dealers are used to hearing all sorts of sales pitches about the value various marketing campaigns will bring their business. But predictive marketing like the kind Mastermind offers is an entirely different model, with the results to show for it.

For instance, the industry average advertising cost-per-sale is $632. For Mastermind users, it’s $128. That’s efficiency through reinvention, enabling a much higher return on your marketing dollar and not just by spending less money to do the same thing.

Creating this kind of efficiency in a highly-competitive and mature market requires true reinvention of the marketing process, using the kinds of digital analytics tools that are reinventing so many other industries. These are the kinds of technologies that drove the e-commerce boom, that are reinventing everything from insurance to tourism, from Wall Street to law enforcement.

This reinvention means a paradigm shift from marketing to demographics or channels, to a one-to-one, personalized and predictive model that gets the consumer thinking about buying a new car before they even realize they are in the market.


2019 isn’t going to be a business-as-usual year, and dealers will have to adapt to both customers and manufacturers going through deep transformations.

It’s a cliché that it’s hard to see the forest for the trees, and dealers who are focused on their day-to-day business – especially during a tightening sales market – risk looking up to discover that they missed both threats and opportunities along the path they were on. Are your customers still interested in what you have to sell them? Are you sure? How do you know? Are there new customers who might be more interested in what’s on your showroom floor now than had been in the past?

This kind of environment is where predictive analytics shines, as the technologies behind it aren’t static or locked into a snapshot of the past. They’re constantly learning, by their very nature. With their ability to juggle thousands of data points at a time, they factor in the behavior not only of the customers who show up, but just as critically, they learn from those who don’t and automatically identify what didn’t work and what could be done better for the next similar customer.

This automated adaptation, which constantly refines your dealership’s understanding of both its existing and potential customers, can form the solid foundation for dealership success in 2019 and beyond. If your environment is evolving, so must you.

Customer Experience

It’s long been a fundamental truth of the auto dealer business that it’s much cheaper to sell another car to an existing customer than it is to conquest a new one. With fewer consumers on the horizon for 2019, it’s time to invest in your customer experience (CX) to ensure you’re building and maintaining the relationships upon which your success will depend in this brave new automotive world.

With sales down, it might seem counterintuitive to talk about investing in CX. But with its importance to your bottom line, it’s an undeniable fact that being good at keeping customers happy and feeling valued is far less expensive than being bad at it. Given the difference in acquisition costs between existing and conquest sales, every customer who walks out your door never to be seen again is hundreds or thousands of dollars in profit erased from your future balance sheets.

As we’ve discussed before, there are simple things that a dealership can do to improve CX and increase loyalty; this can be a starting point in 2019 for a more comprehensive approach such as Amazon’s “obsession with the customer” that leads to meeting customers’ needs before the customer even realizes they have them.

Whatever your specific strategy for improving the total experience your customers have with your dealership might be, its foundation needs to be a great CRM system that gives empowered employees the right data to do the right thing at the right time.

Demand Excellence

If 2019 is going to be the “Year of Demand” for dealerships, let it be the year that you demand excellence in marketing efficiency, in your adaptation to a changing marketplace and in your relationship with your customers. If you’re successful in these initiatives, then 2019 will truly be a happy new year.

Interested in learning how you can capitalize on demand this year? Sign up for a VIP demo today:

Bart Wilson

CX CX CX! Great insight Rana.

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