Embrace the Change: Analyzing Your Market to Effectively Adapt to COVID-19
If there is a lesson to be learned from the first half of 2020, it's that things can change — fast. The COVID-19 pandemic has left an undeniable impact on the automotive sector, but we know that, as an industry, we will move forward and succeed.
As we navigate the weeks and months ahead, every aspect of the dealership will have a role to play. As marketers, our role is especially critical — particularly as many dealerships manage costs and reduce ad spend. We need to be strategic. We can't simply revisit pre-pandemic strategies. In an ever-shifting market, we need to be dynamic and make sure every dollar counts.
Analyze to understand what's changed
While it can be overwhelming and stressful, the first step in the process is to simply analyze your dealership's recent activity and local market conditions to identify trends. Now that we're a few months into the pandemic, we can assess our local markets prior to the pandemic and now. The situation for many consumers remains fluid, so the people in-market for a vehicle at the beginning of March have likely changed. We want to make sure our messages are relevant to our audiences. Has the make-up of in-market buyers shifted? How have sales been impacted? To what extent? Have consumer preferences shifted?
The more we understand about our local market, the better our ability to create messages and campaigns that effectively address the needs of specific audience segments. For instance, while some people may not be ready to buy a new car, they still need service and maintenance on their current vehicle. You can deliver messages that offer service coupons or educate them on safety protocols during service.
Ensure you're reaching the most relevant audience
It was established long-ago that one-size-fits-all marketing campaigns aren't the most cost effective, but COVID-19 has heightened the importance of identifying the right audience and ensuring you understand their most pressing needs and how urgently they're looking to buy. If you plan to reach the same audiences you developed prior to the pandemic, it could backfire. Consumers may have taken themselves out of the market for a vehicle while the pandemic continues, so not only are your messages irrelevant, they could come across as insensitive and potentially alienate your valuable relationship.
The situation for most Americans continues to fluctuate. Dealers need to understand consumer sentiment and how potential car shoppers are reacting to the market — that will help inform your messages. For example, recent consumer sentiment research from Experian shows generational differences as to who's is in-market from a vehicle: As of July 1st, only 8 percent of Baby Boomers said they were in-market for a vehicle, but 35 percent of Gen X raised their hands. If your main demographic has previously been Baby Boomers, your messages will likely fall flat because they're not as interested in buying right now.
Though Gen Z, Millennials, and Gen X all say they're likely to be in market for a vehicle, Experian's data shows that how they plan to go about that purchase differs. While 74 percent of in-market Gen Xers plan to continue with their purchase as planned, Gen Z and Millennials appear to be more interested in exploring their options, whether that's purchasing something less expensive or leasing instead.
Understanding these differences and tailoring your marketing strategies appropriately can help you establish a relationship with a demographic you hadn't previously focused on. Ultimately, this will help keep your dealership moving forward to be successful in the long run.
The environment that we're operating in will likely continue to quickly evolve throughout the rest of the year, and we need to be ready to respond in kind. Running ongoing analysis will ensure you're keeping a pulse on changes as they occur. Layering in additional data points, such as consumer sentiment, can make the analysis even more informative, and any resulting campaigns more effective. At the end of the day, dealerships that maintain this level of intentionality with their marketing strategies will be building customer relationships that will flourish, no matter what the next few months bring.