It’s important that all dealers recognize what Jared Hamilton and his team at DrivingSales are doing for our industry. In addition to being a well-run event, this week’s DrivingSales Executive Summit in Las Vegas brings together a stellar roster of speakers, a host of insights and multiple networking opportunities to help dealers be more effective and profitable auto retailers.
Here are five key take-aways I drew from conversations and sessions on Monday:
The Internet isn’t really driving a “race to the bottom.” AutoTrader.com Senior Director of Enterprise Analytics, Scott Hernalsteen, shared data that shows buyers narrow their vehicle choices, and explore more expensive cars, as they research new vehicles online. This dynamic translates to them paying more to purchase these vehicles when they arrive at the dealership. “It’s not a race to the bottom, it’s a race to the consumer,” Hernalsteen says. He also provided valuable new vehicle and pricing insights for dealers—namely that a combination of custom, vehicle-specific merchandising and below-MSRP pricing yields more buyers.
The advent of an integrated “marketing manager” position for dealers. DrivingSales’ Hamilton aptly noted that dealership advertising still skews toward traditional, not digital, outlets. In addition, the advertising and marketing efforts heavily favor variable operations, even though fixed operations retention and revenue is critical for future dealership profitability. Hamilton announced a certification program for a marketing manager position to address these disconnects—which mirrors the recommendation I made in my second book, Velocity 2.0: Paint, Pixels & Profitability, for a single, Internet-oriented marketing department that feeds all dealership profit centers.
Inventory engagement signals future sales success. Chris Reed, Chief Marketing Officer for Cobalt, offered data that shows the importance for dealers to turn their dealerships into “VDP factories.” Consumer clicks on VDP pages and other online engagement with new/used vehicle inventories offer a “surrogate for emotional connections” to specific vehicles, which leads to sales. I agree with Reed’s assessment that as dealers gain deeper insights into why some vehicles generate more VDPs than others—the subject of my Monday afternoon breakout session—the more customers they’ll see in their showrooms.
Dealership differentiation is an emerging battleground. Matt Smith, Marketing Manager for Darling’s Auto Group, highlighted ways his Maine-based dealer group aims to wow customers. He smartly highlighted two points of commoditization that make differentiation critical—OEMs are trying to make dealers look and operate the same, and new/used vehicles are increasingly becoming commodities. “Your people are the only thing your competition can’t replicate,” Smith says.
“People can feel perfection.” The Disney Institute’s Bruce Kimbrall shared this quote while detailing the hows/whys behind Disney’s ability to create magic-like, memorable moments with its guests. Disney sweats the details, and dealers should too as they strive to exceed customer expectations and put more vehicles across the curb.