As you may have heard, sales growth in the new-car market is slowing. There’s a general consensus in the industry that new-car sales will plateau this year or next.
A number of factors are to blame.
First, the recession severely depressed the auto market. Sales surged in the last few years as consumers began buying again, but now things are returning to normalcy.
Second, people are keeping their cars longer – a side effect of improved build quality.
And while today’s drivers continue to replace their cars, fewer young people are getting their licenses. Plus, the Millennial generation is burdened with billions of dollars of student loan debt. Millennials are delaying big purchases like homes and cars as a result.
As the new car market softens, how can you take advantage and even grow your sales in a challenging market environment?
No. 1: Pricing
The average new car is unaffordable for many of the nation’s households, according to a Bankrate.com analysis.
That may explain why more car buyers are opting for loans with terms greater than 60 months, and why lease rates are higher than they’ve ever been.
It’s also leading shoppers to look more closely at used vehicles. Used cars now make up 56% of car loans, Experian says.
Attract price-sensitive today’s auto shopper by offering prices in line with your local market. And be sure that shoppers know, by way of price validation from sources like CarGurus Deal Badges, that you’re making an effort to compete on price.
No. 2: Marketing
After all, your best pricing efforts won’t count for much if you’re not advertising them. Yet the ad landscape has changed a lot in the past decade, and you may need to adjust your marketing practices to keep up.
Running ads on old-media channels like TV and print did make sense 10 years ago. But today’s consumers are less engaged with old media, even TV. The number of hours people spend watching television has been declining since 2012.
Overall media time continues to grow. But all of the growth is in digital channels, and advertisers are responding. In 2016, for the first time, companies will spend more on digital ads than TV ads.
This isn’t a flash-in-the-pan event. Instead, it’s the next step in a long-term trend – one that consumers are leading by spending more and more time on digital channels.
No. 3: The sales process
Print and radio ads aren’t the only casualty of consumers’ embracing digital media: Outdated sales practices are also falling by the wayside. Haggling is out, and convenience is in.
Shoppers now have more insight than ever before into how different kinds of businesses actually do business. Thanks to online reviews on Yelp, Google, and industry-specific sites like Angie’s List, transparency is now the norm with local businesses.
You can’t control what shoppers write about you online, but you can control how you respond. Address online reviews, both good and bad, in a positive, professional way. And ask your customers to review you – the more satisfied reviews people post, the more positive your online impression will be.
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