Emerging Incentives Will Drive Demand. Here’s How Your Dealership Can Capitalize
With emerging markets on the rise and a complete shift in consumer behavior, dealers are forced to get even more competitive (who knew this was possible) and win market share in the digital space. Think about it. In the past five months, COVID-19 has completely reshaped the way consumers think about living their lives. Single car suburban families are now in-market for a second vehicle as private vehicles take precedence over public transportation. Millennials who previously dominated ride-share are justifiably ready to purchase their first and possibly largest-- investment in their lives. This birth of new shoppers alongside an increase in digital demand means new and creative sales opportunities have become a critical component to keeping your dealership resilient.
During the initial shock of lockdown, dealerships were facing the challenge of having to shut down business. The National Automobile Dealers Association helped auto sales get deemed essential just days after shelter-in-place orders went into effect across the country. Dealers could continue to sell online, and some showrooms stayed open shortly after closure measures were relaxed.
But this wasn’t the only challenge. Even with dealerships deemed essential, there wasn’t enough foot traffic in the showroom. That’s when OEMs released unprecedented incentives, including lease payment relief and deferred payment options. The economic downfall sparked coronavirus car payment programs that aimed to help those still looking to purchase a car amid job uncertainty. According to J.D. Power - far-reaching incentives are now being offered by 25 OEMs, including most major luxury, import, and domestic brands. These incentives range from long-term, low-rate financing to deferred payments for up to six months - all aggressively promoted in commercial advertising and the news. Take for example, one of the more aggressive payment plan options offered by Hyundai Motor America: they revived their Assurance Job Loss Protection Program, making up to six months of payments for new customers who lose their jobs by the end of the year due to COVID-19, and who purchased or leased their vehicles during the month of March. The dealership also offered buyers up to 120 days of deferred payments and zero-interest financing for as long as 84 months.
When looking at the data from our index, it’s clear shoppers are showing real interest. 25% of conversions on Honda dealerships in March-April were on deferral payments alone, while Minnesota shoppers show an impressive 44.12% in conversions.
However, these incentives driven by the government and OEMs are only as good as the dealers make them. Dealers need fast action to deploy messaging across all channels to react to the dynamic market. This means investing in technology that facilitates a complete, seamless digital experience that your shoppers will already be expecting. The dealers that can do this quickly will get the first crack at buyers.
There is no more effective platform than automation tools to rapidly unleash these incentives' power by targeting the right offer, to the right buyer, across every phase of the buying journey. Automated tools will be the first to ramp these incentives live and the most effective at testing and targeting.
And we see this today. Dealerships are testing COVID-19 specific messaging to keep shoppers engaged and ready to convert. More noticeably, an emergence of corona-related templates has become readily available for consumers across dealership websites. Dealers can alert shoppers if and when they’re open for business and that they remain sensitive to their concerns.
Bottom line: Dealers that rapidly deploy incentives to their marketing channels through automation will outperform their markets. Moreover, dealers that utilize automation to deploy incentives will stay ahead of the curve, beat the competition, and in turn, stay not only alive but resilient.
You can access the full report here.
Ilana Shabtay is the VP of Marketing at Fullpath, Automotive’s first customer data and experience platform (CDXP). She is an experienced marketer, highly skilled in digital marketing and artificial intelligence, and the host of the InsideAuto podcast. Having spent almost a decade in the automotive industry, Ilana continues to develop critical skills to drive marketing and serve the dealership community in a new era of technology.View full profile