Detroit might get a bailout. But that won’t be any help for American car dealers, who are on their own. What’s a dealer to do in order to not go the way of the Rambler? First, dealers need to get through this crisis. But after that, they need to rethink their whole business model. Just sitting back and selling cars with newspaper and TV ads won’t do it. You have to BRAND your dealership.
Frankly, car dealerships are boring. That is unfortunate, as a car is one of the most exciting things that people ever buy. You have to un-commoditize your approach, so that customers will want to pick you when they finally come back to buying cars. And you have to be an advocate for your car brand. While you don’t have to do like Harley Davidson and turn your dealership and showroom into a T-shirt and coffee shop, you can use some of those tricks.
Remember. The purpose is not to sell cars. The purpose is to make your potential customers want to buy a car. A few tips are here; email us and we can help you with customized research.
- A low, fixed price. Make sure you have some rock-bottom priced new and used cars. I swear, most dealers present their pricing with all sorts of asterisks and such, even in a recession. You need a cheap car to get folks in the door, a car that is priced to sell. Frankly, no matter what the discount, if you have to start at $35K and work down, you still feel like you are getting gypped. You can get a Mercedes for that. GM is running Red Tag sale, and Ford and Chrysler are also running national sales programs. But some local dealers don’t seem to be on the plan, and many are not putting prices on their websites.
- Cut newspaper advertising way back. As if you haven’t already? Run regular smaller ads, 1/4 pages, with exact cars and exact prices, without all the asterisks.
- Add a vendor to your lot. Lowe’s home stores always do well with allowing a sausage vendor on site. It’s not the big income (though I am sure you can use it) but the potential for traffic. People will not stop at a dealership where there are no customers. They are scared of being pressured by salesmen.
- Barter for radio time for charity. Ask local radio stations if they have extra time that they haven’t sold. If they do, perhaps you could do a one-time joint promotion to draw down inventory by paying the station (or charity) a fee for every car sold as a result of the program? Perhaps you can do it in cooperation with a charity. Another thought: Why not offer your showroom for a charity fund raiser?
- Leasing. Today, leasing seems to be just about long-term leases for new cars, but what about the local, short-term leasing? Churches need emergency church vans. Folks that are moving need pickups. Families that are traveling on long trips sometimes need minivans. We realize leasing is a pain, but is there a way to make it work for you? Could you even buy a U-Haul, Ryder or Hertz franchise to add to your dealership?
- Waiting Lists: Start a waiting list for next year’s models; advertise a “put me on the list” program. It seems that the Big Three will survive, at least in some form. So look at your 2009 models and see if there is anything that a person might look forward to, and start a “list” as a publicity stunt. For instance, there is a national Chevy Volt waiting list. Folks are waiting for the local waiting lists. Remember; Pan Am kept a “space travel” list as a publicity stunt, even though it had no rocket.
- Parts and Self Service. It sounds like we want to turn the U.S.A. into Havana ’59 with this one but so what. Is there parts business you can steal from Auto Zone? If a person that is delaying a car purchase by a year, and can get the part from the dealer at around the same price as an auto parts store, then by all means they will go to the dealer. Think like Home Depot, and hold a Saturday class where you teach some aspect of car maintenance, like switching out a head lamp or wiper blade. Hold a class for kids; get dads to bring their sons to the dealership to look under hoods, and teach car parts. GET THE COMMUNITY IN THE DOOR.
- Reach out to collectors. Why not hold rally where all the locals with your make come to show off their cars? Why not exhibit some historic 1930s or 1950s versions of your brand in the showroom? And do sell some branded T-shirts and such at the service counter. It might only be a bit of income, but it is free advertising for your dealership and brand.
- Detail, details. Most dealers are doing this already, but make sure you have a car detail shop as part of your service operation. Advertise the service at an unbeatable price. Even if folks can’t afford to buy a new car, they can at least come by the dealer for a detail job. Give them one of those paper mats, and stick a brochure on the passenger seat.
- Sell fewer cars. Back in the day, dealers didn’t carry so much inventory, and service was even more a part of the work of a dealership. I realize that dealers have been forced to carry too much inventory by automakers, but this practice has to stop; you need to sue if you can’t. I really a case study at a logistics class at the University of Richmond where the professor, who worked for Scott Paper, was forced to warehouse and hide inventory in the distribution system when sales targets weren’t met. Awful.
- Put a human face on your dealership. The local car dealer was once the pillar of the community. While so many dealers are named after generic things, for the dealerships that still have family names, make sure that the family is visible. Do not re-brand yourself and eliminate those family names. People trust people they know, and all things being equal, will support a person over a generic company.
FIND BEST PRACTICES: For more information on uncovering the potential in your regional car dealership brand, talk to BrandlandUSA. We can help you with the research and insight to re-brand your dealership. Email us.