2012 JUMPSTART | ESA & COMPANYEstimates for 2012 are all over the map, and most are cloaked in a waning degree of confidence. How good will your 2012 be? It’s directly related to your sales performance right now. The following is one of a series of quick posts to help local sales teams get a jumpstart on the competition … right now.
On the heels of a strong February, there is a tight window of opportunity in the U.S. automotive market today. Dealers need a solid plan to continue momentum and to outpace robust market growth. That said, here are three opportunities to consider when constructing a 2012 automotive retail plan:
1. THE LEAD-GENERATION ENGINE
Dealers are expecting continued growth in online lead-generation, some citing a 10-20% increase in this area for 2012. A solid plan should address both sides (offline and online) of the dealer’s lead sourcing.
2. SUPPLY & DEMAND
A decent portion of February’s strong showing in automotive was the residual fulfillment of pent-up demand from late 2011, when inventories where still being replenished. Moving forward, dealers who have good concentration of inventory in 2012 will be in better shape than those scrambling to fill the lot with decent product. Demand is already strong for fuel-efficient and pre-owned vehicles — which are in short supply given the big drop in auto sales of recent years. Dealers who continue to aggressively replenish their pre-owned inventory will have a key advantage in 2012.
3. LONGER LIFE
It’s no surprise that dealers want lifetime relationships with their current and new customers. Realizing that consumers are holding on to their vehicles longer today, some dealers will profit from riding a surge in leasing programs or service plans that attempt to cement this consumer relationship for a longer duration. One challenge worth noting: Younger drivers today are more likely to seek non-dealer service options.
Last but not least, over the past few years many dealers (and the auto industry in general) have incorporated plenty of good habits in streamlining their operations and marketing. Looking ahead to 2012 and beyond, plans should look to lower their per-vehicle ad spending, to continue the trend of profitable retail growth. Efficiency (not “cheapness”) in media buying is of utmost importance here!
Dave Eckstein is a Partner in the firm ESA & Company. He specializes in highly profitable market share growth for local businesses and gets a kick out of demonstrating a declining cost of customer acquisition. He plays baseball, but isn't that Dave Eckstein.
ESA Graph of the Week
Hi David,
As usual you guys are on point. We’ll on pace to move 370 cars this month at my store and about 3000 as a group and the web is going to account for roughly 18 to 20% of that. I am seeing our web traffic grow by leaps and bounds and we are adding 2 more people to our Toyota bdc staff to keep up. And late on Mondays into Tuesdays are when we are setting the majority of our appointments. With demand, we have a couple of dedicated sales people who’s only job is to try and buy our former customers out of thier current cars. part of the reason we do this is the prices at the auctions are creeping up and we don’t have to compete with other dealers when we by cars this way. Plus it increases the time in the customers buying cycle we retain them for around another 36 to 42 months increasing our service side especially with Toyota giving the first two years away. Thanks for the article and catch you guys soon.
Great post Marc. I feel as if I should wish you “good luck” here, but as evidenced by your comments, luck has little if anything to do with your success.