Addressing Industry Challenges & Trends
The current state of the industry indicates that supply chain issues will impact dealer inventory levels throughout this year and into the next.
How can dealers meet their quarterly goals in a fragmented landscape that may not reach pre-pandemic levels until 2024 or beyond (as reported by RetailWire)?
It may feel as though your hands are tied, as market challenges block your dealership from fulfilling consumer demand, but your dealership has more control than you think. The key to driving success when the state of the industry throws wrenches into your quarterly plans is to embrace and harness these changes.
Easier said than done, right? The reformed consumer landscape has driven your customers to the internet, resulting in a spike in new digital trends that have changed the way dealerships need to market their inventory.
We understand that trying to understand all these emerging digital trends can be overwhelming. How do you decide which direction is right for your dealership? You can’t do everything at once, but you CAN identify your dealership’s greatest needs – and the corresponding strategies that will benefit you.
Is your dealership experiencing any of these industry challenges?
- Selling Inventory Amid Supply Chain Shortages
- Navigating an Increasingly Competitive Digital Landscape
- Overcoming Labor Shortages
- Keeping Up with Consumer Demand
- Meeting Expectations for the Customer Experience
- Driving Revenue in the Face of Inflation
- Make the Most of Your Low Sales Seasons
- Future-Proofing Your Dealership Strategy
If so, we have some digital strategies that can help you overcome your market-growth roadblocks.
Selling Inventory Amid Supply Chain Shortages
“I’m losing out on sales because I can’t get the inventory I need onto my lot.”
Sound familiar? Dealerships everywhere are struggling to acquire inventory in time to meet seasonal demand. To make matters more complicated, the ongoing market volatility is creating a lot of uncertainty around how many units to order. After all, will the next year see a continued feast of unit sales, or will inflation lead to a buying famine?
In order to keep your customer base full of interested buyers, your dealership needs strategies that help you retain customer interest in between inventory shipments.
Lead Nurturing
Shoppers are willing to wait longer for a unit if they trust your dealership and are confident that they’ll get what they want in the end. Brand trust is critical here because shoppers are looking for a worry-free online experience.
Your first step should be to evaluate your brand equity processes. Make reputation management a priority by staying on top of all your online reviews and responding within 24 hours to any new reviews (positive or otherwise). Similarly, follow up on any social media messages or website lead form submissions. Keep your social pages active with new posts to encourage audience engagement, and respond within a day to any post comments.
Pre-Order Campaigns
Consider offering your customers the opportunity to place pre-orders. Inventory shortages have created buyer anxiety around being able to buy the preferred unit or having to pivot to a different model. By offering pre-orders on new inventory, you can let shoppers beat the crowds and claim high-demand units before they reach your lot.
Shoppers are more patient if they know they’ll receive the exact unit they’ve set their heart on instead of settling for whatever is in stock right now. The ability to place an order in advance also creates a feeling of exclusivity that will resonate with your shoppers.
As a bonus for you, taking pre-orders lets you gauge customer interest for the upcoming year, so you can get a better idea of how many units to order. (This can help qualm some of that market volatility we mentioned earlier.)
Navigating an Increasingly Competitive Digital Landscape
“How do I get in front of shoppers before they choose a competitor?”
This dilemma pre-dates any pandemic-related market challenges, yet it remains just as relevant as ever. Online shoppers will visit several websites during the research phase, but dealerships who can catch their attention early on have a much better chance of drawing them back in and achieving a sale.
Online marketing means that small and mid-sized dealerships find themselves competing with larger brands who have greater resources and, therefore, seem better equipped to scoop up online leads. However, creating a strong digital presence levels the playing field for dealerships of all sizes.
Your digital presence is key to positioning your brand in front of shoppers, and here are digital strategies that can help your dealership connect with leads ahead of the bigger brands:
Optimized Website Content
Shoppers who are in the process of researching a unit may not know exactly what type of unit they want. They may be looking at a variety of brands, models and pricing, as well as debating between new versus used models. These characteristics of a unit are known as keywords for shoppers’ online searches.
You can target these high-value website keywords by filling out your online inventory listings and ensuring your website always reflects the units you have in stock (or available for pre-order). Use your website analytics to track leads’ journeys across your website and identify highly trafficked webpages to really get an idea of what potential customers are looking for.
Shoppers who submit research queries on search engines are often looking for websites that provide industry expertise. This is especially common when a shopper is stepping outside their comfort zone and considering a make or model they’re unfamiliar with. Online searches are a good opportunity for you to demonstrate your knowledge by creating educational blog articles that list the pros, cons and need-to-knows about each of your inventory lines.
Social Media Management
While social media was invented to form connections across distance, it has evolved to serve as a search engine for shoppers to discover products and services. As a result, shoppers are drawn to brands whose social pages are lively and informative.
This doesn’t mean you need to spam your feed with posts. Consider your audience and determine what type of social media posts your shoppers want to see. Encourage shoppers to engage with your social media by setting the example – “like” and respond to all comments on your posts. You can also drive shoppers from your social media pages to your website by posting links to your inventory pages and blog articles.
Online Customer Service
We’re willing to bet you’ve got in-store service. But does your digital customer service measure up? With most consumers spending a lot of time online before they set foot in a dealership, most of their interactions with your brand will be digital.
Today’s consumers are very comfortable using online technology to connect with businesses, as it saves them time in their busy schedules. Offering digital communication channels also helps your team scale your online customer engagement to one digital platform, where they can respond quickly to shopper inquiries. One of the highest-performing digital tools for customer service is dynamic texting.
TechJury has found that 43% of customers proactively text businesses, and they expect brands to be prepared to reciprocate. Connecting with shoppers via phone is the highest-ranked method (91%) of driving customer satisfaction, as found by Help Scout, because shoppers can connect with your team on the go.
Customers value their time, and demonstrating that you do too is a great way to build a reputation for having good customer service. Training your customer service team to respond quickly to messages and follow up regularly with digital customers will generate some great word-of-mouth from your customers.
Business Listing Management
When a consumer has a need to buy, they go to Google (or another search engine) to generate a list of local dealerships so they can cross-reference available units and pricing. In order to compete with local dealerships, you need to make sure your Google Business Profile page is accurate and complete. This same rule applies to any other online business listings – Google Maps, Apple Maps, Bing, Facebook, etc. By keeping your business listings up to date on all your digital directories, you can make your dealership easy to find and contact.
Having a strong digital presence is key to driving more leads to your platform. Once they browse your site and are ready to take the next step, your team’s capacity to connect is crucial to retaining their interest.
Overcoming Labor Shortages
“I don’t have the team capacity to regularly market to prospects.”
The buying frenzy over the last few years – especially among Marine, Powersports and RV dealerships – has resulted in salespeople acting as “order takers” rather than actively selling to and educating their customers. Combined with the nationwide labor shortage, a lot of dealers have found themselves struggling to find enough qualified employees who know how to nurture sales leads and can handle consumer demand.
If you’re in this boat, there are steps you can take to a) grow your workforce and b) maximize your current team’s potential. (Even if you’re not currently looking to hire, we recommend implementing these strategies so you can provide top-tier service to your customers.)
Competitive Work Environment
Evaluate your dealership’s culture, environment and compensation, and ask yourself, “Would you work for you?” We hope the answer is yes! To determine if your workplace provides a fulfilling environment for employees, compare your dealership to others in surrounding areas.
Look at the industry average for each job title and verify if your dealership meets the standard for income and growth potential. Employee expectations are rising, and top talent will veer toward dealerships that will invest in their employees’ futures. (Again, we’re advocating for this to be you!)
Employee Training
Smaller teams have a well-earned reputation for being scrappy – after all, they’re doing the work of a larger dealership with only a fraction of the workforce size. They’re capable of managing a variety of job responsibilities. Encourage your team to wear many hats to keep every factor of your dealership in operation, and create processes to maintain productivity without reaching burnout. Offer ample opportunities for cross-training and offer appreciation and bonus incentives for employees who step up to the challenge.
When training your team for customer-centric roles, look for individuals who are outgoing, energetic and have a killer sales pitch over being tech whizzes. (You can always find technology that automates the digital work for you, but more on that later).
Mutual Dealership Vision
We all need to know the “why” behind our job roles. No one wants to show up to work not knowing whether their contribution makes a difference to the business. Make sure each member of your team understands how their role fits into the bigger picture of your dealership.
Gather your team together and mutually agree on your brand’s “what” – vision, strategy, values and problems you’re solving – and make sure each team member is on board and invigorated to go above and beyond in their roles.
Planning for “Worst Case Scenario”
Obviously, we hope the worst never happens, but planning for it will increase employee capability. Sit down with your current team and develop contingency plans for the issues and problems that you envision having to confront. Having a plan gives your team the support and confidence to function at their best, even in the wake of a sudden challenge.
Third-Party Support
Despite your best efforts, you may not be able to fill every necessary role for your dealership, and that’s okay. You have the option to outsource your needs to third parties. This could mean partnering with a marketing agency to run your social media and paid ad campaigns, or an industry expert who analyzes market trends and advises your team on how to plan for the next quarter. Choose a third party who understand your industry needs and what makes your brand tick and who has the expertise to deliver results you can trust.
Task Management Software
See, we told you we’d come back around to the technology part. Task management software simplifies your team’s daily to-do list to increase productivity. It can even eliminate some of the repetitive tasks that take up hours of your team’s time, such as automatically following up with potential customers. Instead of answering a dozen emails, your salespeople can be out on the floor interacting with more in-store customers.
Technology can replace just about every aspect of your dealership operations – except the people. So, instead of your team being bogged down with digital sales leads, use technology to increase employee efficiency so your people have more time to focus on selling.
Regardless of your team’s size, with the right planning, you can consolidate your lead generation and focus on the leads that matter most.
Keeping Up with Consumer Demand
“I can’t stay on top of all my website leads. How do I prioritize?”
In 2021, attendees of a Powersports Business webinar survey were asked, “How does your dealership currently handle internet lead follow-up?” Here are the results:
- A staff member is solely dedicated to web leads - 26%
- Sales team handles all follow-up - 68%
- Outsource it to a third-party vendor - 0%
- Other - 5%
Most surveyed dealers tasked their sales team with all website lead follow-up. While salespeople excel at dealing with leads who are ready to buy, internet leads are a different story.
When someone is visiting your website, you don’t know what stage of the sales funnel they are in, what their interests are or how to reach them at the right time. Many dealers address this problem by only focusing on the leads who are reaching out online or visiting the store. For the rest, they may batch n’ blast the entire audience to maintain brand awareness, but this does little to generate sales.
Many dealers are not even thinking about marketing to their website leads right now because buyer demand is still high. And it’s true that dealers don’t need more leads. But they do need to be able to separate the qualified leads from the scores of website visitors.
Lead Scoring
An Eloqua study looked at 10 companies who all used lead scoring systems. The study found these companies achieved an average 30% increase in deal close rates, 18% increase in company revenue and 17% increase in revenue per deal.
The objective of a lead scoring system is pretty simple: The actions shoppers take determine their lead score and inform your team how much time to invest in each lead. For example, a shopper who submits a website lead form could be considered a “hot” lead because they’ve expressed a strong interest in a particular unit. Whereas a shopper who visits the website or starts following your social media may only be a “warm” lead because, while they’re interested in your dealership, they’ve expressed no immediate desire to make a purchase.
Qualified Lead Follow-Up
As we’ve mentioned, leads move quickly. If they don’t receive a timely response from one dealer, they’ll move on to the next.
Create processes to follow up with “hot” leads while buyer interest is high and connect them with your sales team. Coach your team to follow up on a lead form submission within the same day to engage the shopper before their attention starts to wander to the dealership down the street.
Additionally, we encourage you to study the customer journey and identify touchpoints where a shopper should hear from your dealership – such as submitting a lead form, requesting a test drive, reaching out on social media to ask a question – so your team can follow up within 24 hours of that action being taken.
You may also consider automated digital solutions that can identify and nurture hungry leads without requiring manual input from your team.
Gaining command of your lead engagement will help you optimize the customer experience and foster greater buyer interest.
Meeting Expectations for the Customer Experience
“How do I personalize the shopping experience for every customer?”
How important is a personalized shopping experience for consumers? Well, Help Scout reports 80% of shoppers feel a company’s customer experience is as important as its products and services. In fact, the customer experience is responsible for as much as 75% of repeat business that is seen at powersports dealerships around the world, as reported by PSX Digital.
In other words, you’re not competing with the guy down the street; you’re competing with consumers’ previous experiences.
According to Cox Automotive, “Predictive, meet-every-consumer-where-they-are solutions like Starbucks, Netflix and Amazon have raised the bar, and have consumers demanding intelligent buying experiences that ‘get’ them every step of the way."
Consumers expect brands to understand them more than ever, and they’re willing to share more about themselves if it makes the shopping process faster and easier. This means that dealers need to be able to deliver the online experience that shoppers expect.
You may feel like the internet is taking away control from your dealership and limiting your influence in the buying process, but that’s not the case. You can leverage digital solutions to understand customers’ expectations and influence their buying decisions.
Online Inventory Pricing
You may be hesitant to display a unit’s price on your website for fear it will drive away shoppers or give a local competitor too much information about your business. However, gated pricing breeds suspicion and creates false roadblocks that discourage sales. Shoppers don’t want to pick up the phone and call your dealership about pricing; they’ll simply move on to another website.
We encourage you to be upfront about unit pricing as a courtesy to your leads. This will also reduce or eliminate low-ball offers from shoppers who aren’t really serious about a purchase or don’t understand a unit’s value.
Omnichannel Digital Retailing
Digital retailing refers to a customer’s ability to dive deeper into the buying process. These are your most valuable leads because they become more likely to buy the farther they progress through the sales funnel. In this way, digital retailing helps you separate ready buyers from casual website browsers.
“Omnichannel” views each online interaction as part of the larger customer journey, instead of a series of isolated incidents. Omnichannel digital retailing means that each step a customer takes should build onto the last, allowing them to lead themselves deeper into an experience that you own.
What does this look like in action? First, it means making your website more transactional – in other words, letting consumers complete most of the buying process online. Simply encouraging prospects to “call today” or “schedule a demo” can lead to a dead end if someone is not ready to visit your dealership. Website visitors should be able to easily source in-depth information about each unit, including photos, pricing and credit applications.
Digital retailing at its best lets shoppers move as fast or as slow as they want, whether they want to rush through their to-do list so they can sign the paperwork and get their keys or they need more time to sell themselves on the commitment. No matter what path customers take, they will still end up at your dealership.
Omnichannel Customer Engagement
Similarly, omnichannel customer service lets you integrate your digital channels and prioritize unified data so that you have one clear record of a customer’s online interactions. This puts your dealership in control and makes it easy to drive shoppers into your sales funnel, where you can influence the rest of their online journey.
Omnichannel customer service means creating a seamless experience across channels. Let’s say a lead reaches out to your dealership on social media and then a few days later submits a lead form and has an email conversation. Then, finally, they come to your store and chat with your team in person. An omnichannel strategy would mean that each of these interactions used the same brand voice, set the same expectations and captured the interactions in a singular record that your team can refer to during the in-person conversation.
A 2020 Salesforce report shared that nearly 54% of consumers feel like they are interacting with siloed departments instead of a unified business. You want to deliver connected experiences instead of single, one-off interactions. This is where a good CRM system can provide a 360-degree view of each customer that’s accessible to all departments. Make sure your CRM system offers a comprehensive record of each lead interaction so you can better understand every customer’s unique journey and better meet their expectations.
Every shopper moves at their own pace, and strong digital strategies keep your brand in front of shoppers who may not be ready to buy for a while.
Driving Revenue in the Face of Inflation
“The price of units and gas has gone up. How do I encourage online shoppers to take the plunge and make a purchase?”
Inflation is on everyone’s minds these days as we wait to see how rising prices will affect buyer mentality. Many businesses worry that shoppers may hold off on a purchase because of higher-than-normal price hikes. Industry enthusiasts are willing to brave the costs and indulge in their passion anyway, but they only account for a portion of your customer base.
Here are some simple strategies to help you weather a downturn in buyer enthusiasm:
Promote Repair Services
Supply shortages and the rising cost of materials mean that, unfortunately, some manufacturers are cutting costs on materials, such as choosing plastic over metal. While this can lessen the cost of the unit by a margin, it can also result in the unit needing body repairs sooner. This creates more opportunities for your service department.
If you’re running an active digital marketing campaign (and we hope you are – for reasons we’ll address in the next section), invest a portion of your ad spend to promoting your repairs and maintenance sectors. Just as we’ve seen happen to the auto industry, many of your customers may choose to maintain an older model rather than buy a new unit at an inflated price. When customers need their unit fixed, you don’t want them going to a local garage – you want them to come to you, as you know the unit best.
Show Your Worth
Be upfront in your messaging to emphasize your dealership’s value and industry expertise. If a shopper is going to pay big bucks, they want to be confident they’ll get their money’s worth.
Do you have decades of industry experience? Are you passionate about your work? Do you stand behind your guarantees? Do you offer buybacks or pre-orders? Whatever makes your dealership “worth the cost” should be front and center on your website, social media and paid ads. This is where paid ads really bring value to your digital marketing campaign because you are in full control of the story you tell and the type of audience you reach.
If you’re concerned about a looming sales slump, remember you can use low-traffic periods to reinvest in your dealership’s digital processes.
Make the Most of Your Low Sales Seasons
“The selling season is over. Why should I care about my online presence when no one is buying units?”
Powersports and Marine customers typically buy during spring and summer, and dealers experience routine periods of buyer famine during fall and winter. You can use this time to optimize your dealership for the next quarter or sales season.
Review Your Last Quarter
Before things get busy again, take some time to review what did or didn’t go well in the last sales period. Consider the following questions to guide your discussion:
- If you lost customers, why did they leave?
- If you gained customers, why did they choose you?
- Is your financial outcome better, worse or the same as last quarter?
- What factors impacted your revenue?
- Are your greatest roadblocks to driving more revenue a human issue (eg, lack of staff) or a technological one (eg, limited resources to engage online customers)?
If your sales have been great, identify three ways they could be even better next season. Would that be more foot traffic through your doors? Faster follow-up with online leads? An easy way to communicate with shoppers no matter which platform they’re using?
Search Engine Optimization
SEO requires routine optimization to keep up with search engine updates, and the more effort you put into your SEO, the better results it will yield in the future. Identify how you’re going to strengthen your SEO and online content for the next sales season. What keywords will customers use in their online searches? What questions will they need answered? Is now the time to launch a content calendar to organize your dealership’s messaging for the year?
Find Inspiration from Your Surroundings
Use your community to find inspiration, starting with other local dealerships. What are your competitors doing that you may not have considered for yourself? Maybe you’re seeing their digital ads on social media, or they’re offering a bold percentage off down payments. If what they’re doing is working for them, it might work for you, too.
Ask your customers for feedback on the sales process, especially their online experience. Was your website easy to use and informative? Did your team follow up promptly on lead form submissions? This will help you determine if your sales process aligns with how your customers want to shop.
Trying to plan for the future can seem like a waste of resources when the future feels unpredictable, but the digital landscape is certainly here to stay. Our next section details how you invest in long-term success.
Future-Proofing Your Dealership Strategy
“How can my dealership prepare for the future when it’s so unpredictable?”
2020 was a mad scramble for solutions, 2021 was a battle against massive supply shortages and 2022 is doubling down on digital.
Many dealers still view traditional selling methods as the default, but digital is the new default. Many aspects of the future are still in limbo, but what we can predict is the hold that technology will continue to have over the industry. The digital landscape is here to stay, and customers want it.
Embrace Digital Solutions
We encourage you to invest in your online presence because customers won’t revert to shopping in-store. You should assume that by the time a customer visits your store, they have already researched you heavily online.
Does your current digital presence provide the information they need to progress with their search? Here’s a good way to find out: Pretend for a moment that you’re an online shopper and start searching online for units related to your dealership. Is your website easy to find?
When you click on your site, how much information can you learn about your brand and inventory just from the webpages? Is there a clear path to performing most of the buying process online? Would your digital systems be able to track your actions on your site and deliver that information to your sales team? Is your team trained and ready to begin nurturing that online lead?
By putting yourself in the shoes of an online shopper, you can gauge how well your dealership aligns with the way your prospects shop. If you’re encountering roadblocks, consider how the solutions we’ve listed above could resolve some of these challenges and empower your sales team to convert more leads.
There are many paths future customers can take to reach your dealership – what you need to do is find the ones that work for you. When it comes to doing business with online shoppers, you can’t do everything and be everywhere at once, but you can target the trends that are impacting your business right now. Addressing marketing trends now will prime your dealership to thrive amid the incoming changes of the next year.
If you’re interested in further exploring more trusted solutions to industry trends, we invite you to check out our recent article on SEO, which is the foundation of mastering industry trends.