A Slow Market Doesn’t Have to Mean Slow Sales

While automotive sales finally seem to be strengthening, there’s no denying the recession took a steep toll on many dealers. Even amid the unprecedented challenges of the past two years, however, some dealers prospered. Five Star Automotive Group in Macon, Georgia, is a good example.

In 2008, Five Star’s six dealerships (representing 13 brands from six manufacturers) were averaging 500 retail sales a month with a customer retention rate of 18 percent. Today, Five Star is averaging 800 retail sales a month, with a 30 percent retention rate—an increase of 67 percent.
To achieve such an increase, Five Star leaders invested time in understanding how their customers and market had changed and adjusted their marketing strategy accordingly. I believe any dealer can increase sales if he or she is willing to do the same.
1.       Objectively assess your strengths and weaknesses.
In working with more than 1,500 dealers during the past decade, I have found many don’t have the tools to assess what’s truly working and what’s not. For example, as Five Star built its dealer group, it purchased dealerships from many different owners, which eroded customer loyalty, retention, and sales. As a result, marketing strategies that targeted existing customers became less effective as those customers felt free to ‘shop around.’ Identifying this problem was an important first step.  
2.       Know your market and how buying patterns have changed.
The market has turned upside down in the last 18 months, but the real question is, how has your market changed? When Five Star invested in researching their market, they found that buyers were increasingly looking for older, lower-priced vehicles, and that two import stores were capturing Five Star customers. Knowing what and where their customers were buying was powerful knowledge that helped Five Star bring buyers back to their dealerships.
3.       Adjust your inventory and marketing strategy to be reflective of your buyers.
Once you know who your buyers are and what they are buying, you can adjust inventory and marketing accordingly. To capture buyers looking for cheaper vehicles, Five Star became more aggressive in taking, marketing and reselling trade-ins, especially older models, at all its dealerships. They also enhanced marketing efforts in regions south and west of their traditional geographic market since market profiling showed pockets of buyers in those areas.
4.       Maintain a consistent presence in the market to enhance buyer awareness.
Successful dealers influence buyers on a continual basis. Five Star’s strong sales are sustained by consistent follow-up with buyers through integrated direct mail, email, and phone campaigns that ramp up awareness and a strong  brand presence.
Five Star leaders also fostered a group-wide culture of aggressively pursuing sales opportunities above and beyond walk-up sales. Today when I provide Five Star a list of in-market buyers, their associates work the phones, building and maintaining relationships with customers to ensure Five Star is always top-of-mind.
Indeed, economic challenges deflated automotive sales, but not all dealers suffered. Those dealers—like Five Star Automotive Group—who invest in understanding their strengths and weaknesses, learn how their market has changed and are willing to adjust their marketing strategies will always be more likely to beat the market—and the competition.
Jonathan Lucenay is founder and CEO of Summit Resources, LLC, an Atlanta-based direct marketing company that provides “guaranteed sales” for auto dealers (new and pre-owned) throughout the U.S.  For more information, visit www.srppm.com, or call 1-888-786-6489.




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