The new WLTP rules enforced from September 1 mean that many dealers are still facing significant supply issues for new car model ranges.
Opinions expressed elsewhere in AM suggest that the 20.5% decline in September registrations could have a “brutal impact” on franchised dealer profitability for the rest of the year.
With the clear bottleneck in new car availability, it seems obvious that a focus on used car sales is required if franchised dealers are to combat the effects of WLTP.
However, a shift in attention alone is not enough. It’s time for a shift in methods, too.
Recent analysis by Auto Trader suggests demand for used cars has pushed average prices to a record level, but the Vehicle Remarketing Association reports that higher trade prices now mean that finance and insurance products are often the only source of a reasonable margin.
Therefore, dealers must ensure they are doing everything possible to maximise profitability from used car stock.
Improve your social skills
If a used car lead does not progress to a sale, then the chances are that it was down to one of three things: an issue with a salesperson, the price of the car, or vehicle availability.
Staff training can address the first issue but requires time to produce results; while customers’ budgets often mean that the price is an unsurmountable obstacle.
That leaves dealers with the task of keeping customers better informed of new additions to used car stock – and this is relatively easy to address through social marketing.
Our experience shows that data-driven marketing on social media platforms – particularly Facebook – provides the most reliable and cost-effective means to boost used car sales.
However, a clear majority of dealers in the UK do not currently include social media within their paid-for advertising activity, which means they are missing out on a large proportion of a relevant audience.
In thinking about the size of the opportunity, consider that advertising on social media not only enables you to remarket your stock to existing prospects, but also to generate fresh leads for your business from a much larger group.
Targeting potential customers in this way can help to get the right used car in front of the right person at the right time, as well as drive awareness and engagement that will become leads in future months and years.
Facebook is your friend
Most automotive content on Facebook is consumed by those in the 45 to 54 age group, which is the sweet spot for franchised dealers.
Furthermore, this consumption is most intense on Thursday and Friday, and least intense on Saturday, which suggests that it is a primer for visits to dealerships at the weekend.
In fact, Facebook’s significance is proven by the fact that it is the top source of paid-for traffic to many of our clients’ websites, delivering up to three times as many visitors as Google AdWords.
By using smart digital tools like the Facebook Pixel, dealers can target known prospects on the platform with adverts for used cars that most closely match their preferences, cross-checked from the CRM enquiry data.
In addition, stock adverts can be served to an even larger ‘lookalike’ audience of potential conquest customers, based on their social profile and search history.
These remarketing adverts act as a stock list for a dealer’s used cars, built into the platform where potential customers are more likely to linger, because being able to browse without leaving Facebook has been proven to maximise dwell time.
Average video view time on Facebook is around 10 seconds, and anything over 15 seconds is considered strong.
The adverts we are producing for dealers show prospects spending more than 40 seconds looking at stock lists in this way – a very clear indicator of qualified purchase intent.
High quality, low cost
Click-through rates for these Facebook adverts are impressive, running at 2% to 3%, compared to reported averages of 0.8% across all automotive advertising on Facebook.
Likewise, while the average cost per click across automotive placements is around £1.70, our stock remarketing adverts are running at approximately £0.19 – nearly 90% cheaper.
Beyond targeting known prospects, new tools on Facebook now make it possible to run dedicated lead-generation advertising with the aim of quickly bringing higher volumes of prospects to the dealership.
These should be highly qualified prospects, too, thanks to smart algorithms and tracking tools that can out-think any human-centred assessment about their purchase intent.
No other marketing initiative gives dealers such finely-honed targeting and such extensive data-driven assessment of potential leads.
Fundamentally, social platforms enable used cars to be marketed in a timely, proactive way to people who are most likely to be interested in them.
Those who still think these platforms are not relevant for their advertising spend need to take a second look at just how smart they have become.
Author: Jeremy Evans, managing director, Marketing Delivery
At Automotive Management Live on November 8, Marketing Delivery will be showcasing some of the methods and tools used to reach an ever-increasing number of consumers and will explain why your dealership can no longer ignore social media.