Our world is crowded with marketing messages about what to buy and why.  As consumers we shop multiple places to make sure we’re receiving the best deal and that the offers we are being presented are consistent, valid and apply to our specific needs. 

The world of automobile shopping has taken this ubiquitous shopping experience to a new level with multi-channel advertising, paid search, auto research/listing sites, tiers 1 – 3 websites and many on line pricing tools.  There are so many tools at our disposal that getting pricing has never been easier.  Since consumers cross shopping sites, it is more important than ever for the auto retail industry to have consistent pricing across all tiers.

Technology now allows OEM’s, dealers and advertising agencies to apply incentives to a price configuration for customized transactions that meet a consumer’s budget.  The accuracy, consistency, speed and comprehensiveness of this information is the difference in converting shoppers to buyers for auto retailers that advertise on multiple digital properties.

The openness of information for consumers fosters candor and trust that are like a carrot as opposed to a stick method of engagement.  Studies support this approach which has seen rapid adoption by dealers, shopping sites, finance companies and OEM’s.  This is a more specific application of the offers available on public domains and presented through omnichannel communication (traditional, digital & social) with specific inventory or advertised specials from OEM’s.

Our clients are seeing a collaborative effort by the industry (OEM’s, dealers, ad agencies, software providers, lenders, etc.) to present consistent information for targeting shoppers and their position in the purchasing process.  Use cases have surfaced about how this information is being applied as a competitive pricing/feature analysis of brand/makes, influencing the transaction (price and financing), qualifying requirements (credit score, eligibility, used vehicle trade value . . .) and the strategy of using incentives as part of a payment lowering for winning market share battles.  These examples have tactical value and will continue to help us with analytics for improved spending and ROI from inventive investments.

Analytics will continue to drive where and how incentives will be applied for achieving both volume and margin requirements.  Transitioning incentives from “showroom traffic drivers” to strategic discounts for payment conscious shoppers looking for the right vehicle at an affordable cost is an example of moving incentive use further down the funnel to a transactional level.  This dynamic will continue to drive the collaboration between all players in the industry for providing guidance on the sales effectiveness of incentives based on their targeted intent.

These areas are key to dealer and OEM profitability which is under attack because of margin compression at many levels.  Initiating a new car sales strategy by maximizing inventory, advertising/marketing and inventory turn (see Brian Finkelmeyer’s post https://www.linkedin.com/feed/update/urn:li:activity:6443198218871332864/) shows the many ways factory incentives support all facets of new vehicle pricing, advertising, marketing, digital retailing transacting and data base mining (equity).  Incentives are not a one trick pony used for driving showroom traffic, rather a key component in 100% of all new vehicle promotion and sales.