The 2010s were a time of incredible change in automotive marketing. Not since the growth of radio advertising in the 1930s or television ads in the 1950s have dealers had both the challenge and opportunity of reinventing the way they engage with potential consumers as they did during the decade where the Internet, social media and data analytics became a ubiquitous part of American life.
Automotive marketers looking forward to 2020 and beyond can benefit from a reminder of how much the landscape has changed in a relatively short period of time.
As consumers increasingly spent their lives online, advertisers followed. In 2010, U.S. advertisers spent $26 billion on online advertisements. By 2019, they spent roughly that much on search advertising alone – in just the first half of the year. By the end of June 2019, combined digital advertising spending in the U.S. had exceeded $57.9 billion and was on track to pass offline ad spending for the first time.
What it meant to be “online” and “offline” evolved, as well. The 2010 U.S. Census found that roughly two-thirds of Americans lived in a home with some form of Internet access, primarily cable or DSL service. The Internet – and online marketing – was something that happened on your computer, as fewer than one in 10 Americans used their mobile phone to access the Internet.
By 2019, 81 percent of Americans owned a smartphone and the richness of the mobile experience had gotten to the point where more than a third had made their phone or tablet, rather than the computer, their primary method of going online.
Looking forward to 2020 and beyond, what do automotive marketers need to know? What dealership marketing strategies are ready to drive growth, and what auto marketing tools are driving sales and ROI? Mastermind’s best practices for automotive marketers in 2020 include:
- Recognizing where evolving product mix is driving a change in your prospects.
- Driving down costs through efficient personalized marketing.
- Committing to service and other fixed ops marketing to drive revenue in a flat sales environment.
- Nailing down your most efficient sales through effective loyalty and service-not-sold marketing.
New Auto Models and Consumer Preferences
The auto industry is grappling with changing consumer preferences, and dealers are being forced to work their existing inventory while trying to predict which future models consumers might be interested in.
Marketers know that when what you’re selling is changing, whom you’re selling to changes, as well. In 2016, there were 91 CUVs on the marketplace. By 2021, there are expected to be 136 models competing for consumer attention. As consumers continue to opt for larger vehicles in 2020, car market share is forecasted to continue shrinking, while SUVs are expected to grow and pickups to stay relatively steady.
Even with so many new models on the horizon, 2020 car sales are expected to be relatively flat. According to NADA, sales of new-light vehicles are expected to decline by 1.2 percent in the next year, signaling that the competition between dealers is only going to grow fiercer.
In an environment like this, it’s more important than ever to base marketing decisions on forward-looking predictive analytics – and more dangerous than ever to assume that what’s worked before will continue to work in a new era with new consumers and new products.
Better Personalization Means Better Dealership Profits
Mastermind’s personalized marketing campaigns, powered by industry-best data from partners such as TransUnion, Carfax and IHS Markit, rendered into simple and usable insights led by our proprietary Behavior Prediction Score®, help dealers maintain their competitive edge by ensuring they’re reaching the best possible customer in their market with the right message – at the right time.
Looking ahead, the timing of dealership’s marketing messages is growing increasingly important. According to Cox Automotive research, the average car shopper is spending significantly less time on the market than ever before: 96 days, which is down 20 days in just two years. And while 96 days is the average length of the car buying journey, a growing cohort of shoppers is even quicker on the trigger, with one in four new car buyers spending 30 days or less on the market.
Identifying the best prospects for your existing offers and product mix and then using data-driven insights to deliver marketing content that has the highest potential to move that specific prospect to take action is how the average dealer marketing spend-per-car-sale with Mastermind is $115, versus $624 for the auto industry as a whole.
Effective personalized advertising is the secret to conquest success in a flat and increasingly competitive marketplace. The results are real: Our dealer partners report the combination of predictive analytics and personalized marketing in Market EyeQ’s Market Conquest feature drives up to 15 new conquest sales a month.
Softening Sales Call For Selling Service
As we discussed a few months ago, auto industry experts generally predict a flat to softening sales market in 2020. In addition to heated competition, this means the risk of marketing oversaturation for consumers is high. Even though the auto industry is slowly decreasing its share of total national digital ad spending, the total amount spent continues to grow steadily. The total automotive online advertising spend has virtually doubled in just four years, skyrocketing from $9.11 billion in 2016 to a predicted $18.15 billion this year.
Personalized dealership marketing can help break through the noise, but the time is certainly now for dealers to look at new revenue opportunities – starting with the service drive.
Dealership marketers need to embrace the opportunity to get more loyalty customers into the service drive through effective relationship marketing and to attract more new service-not-sold customers through efficient predictive analytics and personalized marketing campaigns.
More service drive customers doesn’t just mean more fixed ops revenues – although it certainly does mean that if managed effectively, which is great for the dealership’s bottom line. But bringing more customers into your dealership means more opportunities for sales, even if it’s not the showroom door through which they’re entering.
Dealership Retention: Keep Your Existing Customers In-House
If auto industry forecasts are correct, efficiency will be critical to dealership’s profitability in 2020, and there’s no more efficient way to do automotive marketing than to your existing customers. Industry statistics suggest it’s as much as five times cheaper to retain an existing customer than it is to conquest a new one. That means huge impacts on your bottom line. In fact, research from Bain & Company suggests that increasing your dealership customer retention rate by just five percent can increase total profits by anywhere from 25 percent to 95 percent.
Market EyeQ’s predictive analytics capabilities are incredibly powerful when it comes to service conquest, as it’s able to integrate your own dealership DMS data with Mastermind’s arsenal of proprietary and public data to identify the service-not-sold customers who are most ready for a new vehicle, and who are the best prospects for the products and offers you have available.
This combination of analytics and existing service relationship is why Mastermind’s dealers report activating an average 55 percent of their service drive into high-quality new car sales leads, while continuing to show steady service and parts revenue growth.
Finally, by maintaining customer relationships over time, dealers can continue to maximize their sales opportunities even in a flat market. By integrating their CRM with a sales platform such as Market EyeQ, dealers can proactively identify when an existing customer has become a valuable prospect for a lease-end or turn-in deal generating potential revenue from factors such as new and used car sales, lease initiation, upsells and initiation fees. By leveraging this approach, Market EyeQ improves our dealer partner’s retention sales rates by an average of 15 percent over non-Mastermind dealerships.
Does the changing landscape of automotive marketing have you worried that your dealership is falling behind rather than leading the charge into the future? Contact us for a free consultation on how you can use predictive marketing to attract new conquest customers, increase service revenues, keep your loyalty customers in-house and improve your marketing ROI in 2020 and beyond.