Unlike the dealership consolidators that are trying to reduce costs through scale economies in administration, advertising and service, Republic’s stated strategy is to manage actively the vehicle life cycle while developing a proprietary channel brand. Another example of a company involved in external channel evolution is G.E. Capital Services, an extremely accomplished innovator. It has purchased Autobytel.com and is moving into used-car leasing.
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Detroit-based General Motors, which operates under several brands such as Chevrolet, Cadillac, Buick, is the third largest advertisers in the U.S., spending 3.5 million U.S. dollars in advertising in 2015. Also based in the Detroit area, Ford Motor Company was the sixth largest advertiser in the country that year. Italian group Fiat Chrysler Automobiles ranked eighth with a total of ad spend of 2.25 billion U.S. dollars in 2015, investing an average of 2.16 thousand U.S. dollar on advertising per each Fiat vehicle sold that year. Carmakers are some of the major spenders in the advertising market in the U.S., but they are not the only ones within the automotive industry. Advertising expenditure of the automotive rental and leasing industry was estimated at 492 million U.S. dollars in 2016, whereas automotive dealers and gas stations were projected to spend about 983 million U.S. dollars that year.
The way that you have to do that is to integrate your customer database, which is your DMS (data management system) or your CRM (consumer relationship management), with your website. When you integrate these tools, when I go to your website, it might say, “Hello Scott,” (like the Momentum site below) or even more interestingly, it might show, “Great to see you again, is it time to service your vehicle?”.
As an example, if someone looks at a red truck on your website, they would receive an email with information about the red truck, they would see ads for the red truck, and your sales team would be alerted about the potential customer.
There is another issue that global automotive market have to deal with in gaining preference among target audiences. Yes, those pesky dealerships that few, if anybody, like to frequent. Rebranding automobiles means looking at this model too.
Sometimes, it’s best to assume that a potential customer walking onto your lot has had a bad car-buying experience in the past, or they’ve heard plenty of stories from people who have. This gives you an opportunity to change the way you sell and not just make a sale, but hopefully, alter their perception — for the better — of car salespeople.
“MediaPost’s events are a fabulous way to meet industry experts, learn about industry solutions, interact with peer groups and learn about specific channels of interactive media. The contacts I have made at these events will be valuable for years to come.”
Automotive companies face a number of unique marketing challenges. Incentive programs for Customers and Dealers, for example, are constantly evolving and costly to execute. Generally taking the form Financing, Leasing and Cash Back programs, incentives are continuously offered, thus making it difficult to discern their ability to drive new versus repeat purchases. The vehicle purchase cycle is also much longer than for most products. This increases the importance of striking the right mix of short-term, product-focused and long-term, brand-focused marketing investments. Other major challenges include pricing, innovation and an intense competitive environment. The automotive industry is a complex system. MMA is well-versed in building models to capture these complexities and help automotive companies better understand the impact of marketing on all levels of their business.
“Initially, we had growing pains. It cost us money to stand behind it, but we’ve evolved over the years to where that program cost us very little because our cars are reconditioned so well. We know what the car is going to need so we build a car we’re not going to have to buy back in three days or exchange in 30 days.”
“We have relations with 160 e-invoicing providers and we connect will all kinds of ERP systems,” he added. “If your ERP can generate any sensible data format, we can capture it and send it to the receiver.” This makes it different from EDI, an earlier electronic invoicing system, that required one-off connections between a supplier and a buyer.
Leverage purchasing power. Dealers can also capitalize on economies of scale. The economies result from lower costs in areas such as financing, advertising, management personnel, payroll handling, insurance, supplies, administrative functions and parts purchases. The reported cost savings from these economies alone can be as high as 20 percent of a dealer’s total costs. B.B. Hollingsworth Jr., chairman of Group 1 Automotive Inc., one of the leading consolidators in the country, says that his company has “discovered more economies-of-scale savings than [it] initially expected.”
Since then, I have talked multiple people out of even driving by the first, and have gotten 3-4 referral checks from the second. Not to mention the countless other people I have sent their way without bothering to bring up the bird dog.
If you like the car, consider having it inspected by a mechanic before you buy it. If you don’t have a mechanic, Google and Yelp are good places to read local shops’ reviews. A pre-purchase inspection costs about $100 and can alert you to problems you may not find yourself. It’s a smart investment.