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Dealers Must Invest In Alternative Marketing Strategies

Automakers were among the first companies to recognize the value of having an online presence, creating car configurators and websites to attract the digerati. However, in the recent years, many dealerships have fallen behind when it comes to reaching their customers on the internet.  But times they are  a changin’.  Many dealerships are choosing to invest in an  integrated  digital marketing approach designed to fully leverage the opportunities offered by the digital age

According to a study conducted by McKinsey to better understand the touchpoints that drive the customers’ premium perception and as a result their willingness to pay, of the 7 core touchpoints that were identified digital experience ranked 2nd most important, immediately behind live experience. Therefore, although the focus on the traditional dimensions like retail and product experience is still important, dealerships need to improve their online game.

Digital provides opportunities for dealerships throughout the value chain that goes beyond traditional marketing. In addition, digital will play an important role in creating new leads. Evidently, leveraging digital should become a reality throughout the value chain; most dealerships have big opportunities to do even more than they are currently doing.

Our research has revealed that that a new sensation is changing the landscape: the customers who research on the internet but purchase offline. These customers obtain advice, compare brands and usually also check pricing on the internet before they move offline to the traditional retail channel and finally purchasing their car. This growing and heavy, reliance on information obtained from online sources requires the marketers to have an integrated marketing approach that cuts across different customer touchpoints and channels. In the future, it will not be enough for dealerships to understand the needs of the customers; they must also understand their channel behavior.

The process of buying a car involves several phases, these include awareness, consideration, short listing, service, purchase, and finally repurchase, the “consumer decision journey” (CDJ) framework explains the way people who purchase cars move from making an initial consideration to purchasing cars. Throughout the CDJ, customers are increasingly relying on digital channels, for instance, reading reviews, checking brands’ websites, and visiting social community forums and networks in the consideration phase. Recent insights have shown that more than 50% of customers make their decision online; this emphasizes the importance of managing the digital channel for dealerships.  Digital sales are larger than expected. The traditional physical retail channels still dominate the sale of cars, but digital sales are now becoming more of a reality, particularly when it comes to used cars. New car sales are still a very minute share of this kind of transaction given the perceived risk and the limited ability to bargain. Even in the new car domain, however, 25% of car purchasers stated that they prefer moving towards online channels in the future.

The digital age is also transforming the products that are being added in today’s cars. Many original-equipment manufacturers (OEMs) are now introducing new levels of digital services and content in their products. OEMs are now developing solutions that allow the incorporation of external digital solutions that still enables them to keep their position as gatekeeper and integrator.

Digital communities influence decisions. – People who buy cars are increasingly relying on the opinion of other people when buying a car. They go into reading neutral online reviews and communities before making a decision. As a result, it becomes important that dealerships actively manage their discussions and presence in the various online communities. Many dealerships have already realized this amazing opportunity and educated their teams to follow the online discussions and give input when required.

Although most uplifting examples of digital marketing success exist in the automotive industry, only a few players have started to approach the opportunity provided by digital communication from a holistic perspective. Although having an innovative app or a YouTube channel is a good beginning point, in the end, only having a systematic approach will allow dealerships to capture the full potential of the digital age.