What Dealerships Should Be Considering When it Comes to COVID-19

Whitney Norrad   •   

Mar 17 2021   •   

7-8 min read

Today, while news here in Canada isn’t the brightest, times feel uncertain, and consumers are acting irrationally, we had two approaches to client marketing cross our desks:

  • A small, independent dealer upped his ad budget by 50%.
  • A large, franchise dealer in a smaller city suggested they might want to cut all ad and marketing spending.

I’ll come back to this later, but think about these two polar opposites and the ultimate outcomes they may receive when it comes to sales further down the line, in 30, 60, or 90 days.

What Does FlexDealer Have to Say About Where Online Shopping is at Today?

We’re aware that there’s no crystal ball to marketing, but we can look to consumer psychology, logic, history, and an infinite number of other ideas. If we look at the world’s recent written history, we’ve not only survived pandemics but depressions, recessions, wars, and more. While there’s no guarantees, we’re optimistic that the world and the automotive industry will again land on their figurative feet, and return to a period of impressive growth. 

After all, don’t you want a new car now that you’re spending extra time online?

Our CEO, Michael Cirillo, shared the below insights this morning with our newsletter subscribers:

First, as more people are beginning to stay home, we are seeing an increase in web search activity, even as it relates to vehicle sales.

Second, the customer purchase process doesn't happen overnight, which means that your next group of car shoppers are still engaged and intend on making purchases. 

Where your competitors begin to panic or contract, this is your (and our) opportunity to expand. That's why as a company, FlexDealer remains "full steam ahead" on your projects.

Sure, that means no kicking back and eating Doritos all day every day, but we’ve been blessed with the ability to continue to work remotely (or offer that opportunity to in-office staff at HQ) and we want to continue to do so, and do right by our clients.

Should We Pull our Ad Budget?

In times of panic, people panic. We’re more connected to the world than we ever have been. There are more ways to transmit and share media than ever before. This is both a blessing and a curse in times of prosperity and difficulty, COVID-19 being no exception.

Our goal is to help our dealers win online. That has not changed in light of recent events.

So, do we think you should pull your ads budget? 

In short: no.

With our clients, we have a set management fee for their online ads. This means that we don’t take a percentage of their spend to manage their ads, our fee to do so remains the same regardless of how much they spend on Google, Facebook, etc. If a dealer client dropped their ad spend from $5,000 to $500, that doesn’t make a difference to our bottom line.

Keeping that in mind: we don’t believe that backing away is the answer here.

We know that Google has shared that the online buying journey for car shoppers can last months. We see the best results with our remarketing campaigns in the 60 days+ range. If we think logically, that journey may very well remain that long, or increase. If a buyer was on the fence two weeks ago, they likely are putting off their purchase until the future seems more certain. When they’re ready to buy again in 60-90 days, you should be the one they come to first.

How do you become that one? One of the most straightforward ways to do this is to use remarketing. 

Remarketing allows us advertisers to put a pixel on your site that tracks visitors. If they’ve visited but not submitted a lead, we can shoot more ads to them within the next 60-90 days. We want to keep you top-of-mind with relevant ads and help you to catch potential customers directly in the research phase of the buyer’s journey with content that answers their questions.

Back to Our Two Dealer Response Examples 

Our small, independent dealer is thinking long-term about what opportunities are out there. He’s been through 2010, 2008, and 2001. His goal isn’t to run away from the market when times are tough, but hold tight and find more customers, even if their horizon might be a little bit longer. Some ideas we shared with him to leverage the opportunities that are out there:

  • Remarketing: as discussed above using Facebook and Google
  • CPC: Google CPC Ads that only charge you when someone clicks, and that only show when you have something relevant to exactly what they’re searching for.
  • Bidding strategies for Google: if all of your competition is pulling out and not bidding, those sweet sweet clicks aren’t going to have any competition and your placements will be cheaper.

Our big, franchise dealer is thinking about cutting all marketing spend! What?! While this hasn’t happened, and we’ve shared the same insights as above, it’s an interesting parallel to consider. The franchise dealership with higher revenues (and yes, higher costs) doesn’t spend all that much more than our small, independent when it comes to advertising. What will he miss out on if he chooses to hit the big red pause button?

  • The opportunity to remarket to customers that are interested in his products down the line based on their online behaviours right now.
  • Expected lower CPC prices for ad placements.
  • Those lower prices being directly applicable to ad placements that are showing for customers who are online, and searching for exactly what he has in his inventory! (That’s how Google Dynamic ads can work and it’s really cool).
  • Visibility: tapping out will inevitably lead to falling behind.

Looking at the long-term potential outcomes, the different parties with unique situations, and how they’re approaching them is incredibly interesting. We truly believe that the above paths are worth considering when it comes to your own dealership’s plan.

How to Make the Most of Your Continued Marketing

When the market changes, it is important to change with it. When buyers went online, dealers started building websites. When customers wanted virtual tours, dealers got their cameras out. When customers got sick of balloons on car lots, dealers...okay, you guys kept the balloons (but we forgive you). 

Right now, customers want to stay the heck away from public places. Shouldn’t our dealers be helping them do so?

Here are some suggestions that can help you do business the way your clients need you to during this unique situation:

Run ads that explain that you’ll bring the test drive to them! Customers don’t need to visit the dealership to test drive a car, and you don’t need to have that salesperson in the car with them when they drop it off. Contactless test drives and online applications are your friend! I bet your competitors haven’t thought of this one yet (Whoa, I’m just giving away the secret sauce here!)

Start a reservation service and promote it. Do they want a specific vehicle on your lot but might not want to get physically involved in the buying process right now? Sure, it’s not a sale, but they can begin the process and ensure that the car they want is there when they’re ready: ensuring you a sale and the client their dream car. This could look like a digital or phone deposit, a contract, of whatever works for your dealership.

Leverage mobile service opportunities. Keeping your customers away from the dealership doesn’t mean that they aren’t driving to mom’s house for Sunday dinner, and this doesn’t mean that they won’t need an oil change or an emergency repair. It does mean that your team can pick up the vehicle, sanitize everything they touch, repair it, and return it (maybe even with a free wash so they feel extra fresh!) squeaky clean and freshly steering-wheel-wiped with Lysol.

Promote detailing. What many people are realizing is the importance of general cleaning and personal hygiene. Offer to clean their car—now is the time! Detailing is a deep clean compared to the $10 wash at the gas station or the $30 vac-n-go stop on the highway, so make it known, and make it appeal to their current need for speed clean.

Comfort them. Show your customers with video examples, newsletters, and posts exactly what you’re doing to prevent the spread, while keeping your staff, and your customers healthy. Show your drivers wearing gloves, team members sanitizing steering wheels and surfaces, and build trust that it isn’t just for show.

Knee-jerk reactions usually aren’t sustainable or logical. We’re here to help you in good times and bad times with logical and data-driven marketing plans that think outside of the box. We’re not retreating into our shells and neither should you.

Be brave, be bold, wash your hands, and market smart: not short-term and silly.

Need advice? I’m here to help you strategize.

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