“I want it all and I want it now.”–Farrokh “Freddie Mercury” Bulsara; (1946-1991), Singer and Bohemian Rhapsodizer
In Part III we discussed looking at your potential in terms of market share, as opposed to a fluctuating amount of units sold. The tricky part is understanding where or WHO your market is. For many, they are locked into the notion of what they’re told by the manufacturers, believing their market is a neat and tidy x-mile radius around their store. If only things were that simple.
One of the main things that makes automotive dealerships different from other businesses is they are not particularly portable. If you have ten acres in downtown wherever, it’s going to be pretty difficult (and costly) to find ten more acres in a better part of town. So, unlike other retailers, restaurants, clubs, and other small-to-medium businesses, you can’t just up and move when the neighborhood is no longer good for business. The shifting ages come naturally with time, while the spending power of the area morphs with career arcs, retirements, and fixed incomes. This doesn’t even take into account the tidal shifts of workplace closures, stagnation, gentrification, or immigrant enclaving. If the dealership isn’t poised to adapt to these changes in its conveniently packaged local market, it is just along for the ride.
What if we were to classify people outside other than market geography and brand affinity, and categorize them into clusters of customers? Instead of fighting for the 0.64% of a gigantic pie, let’s look for smaller pies than those conveniently around us. Let’s look further than the brand loyalists and brand defectors. Let’s look for those little-tiny-itty-bitty-say-it-in-a-high-pitched-voice-bite-sized pies you can only find at Whole Foods, along with a few pâtisseries, across the United States. These delicious treats often contain many kinds of fruit, and you can consume 100% of that pie all by yourself.
(Full disclosure, this has been my obsession since entering the car business.)
The word “market” has many connotations. We can think of markets as places, like whole metropolitan areas, or city centers and suburbs. Sometimes it’s some place super-specific, like a farmer’s market. Then we have the stock market, which is more metaphysical in nature, as it exists in ones and zeroes. When we talk market-ing, simply speaking, it means a defined group of people we’re trying to reach with a message. That’s it. We get to put up the boundaries.
Lifestyle and luxury companies have laid the groundwork for this type of marketing. They know where their audiences goes, what media they consume, and where to get in front of them. It’s not likely you’ll see a $130,000 Patek Philippe watch advertised in USA Today alongside plebeian Rolexes, but you might see it in London’s Financial Times. By understanding who wants to consume your products and services, you can define your own markets to dominate. What this also means is that you absolutely need to define what you do and who is most likely to be interested in what you have to offer.
When this strategy gets adopted, it means defining who your markets are, and the best methods to reach them. That’s right, I said markets plural. As I mentioned, it’s up to us to define what those boundaries are. Earlier in my retail career, I used a lensing technique to identify the right customers. I focused on certain zip codes to acquire leads from. I added the lenses of those who qualified for corporate discounts, then those who were most likely to take advantage of our services, and kept boiling down from there. The data began to take on the shape of faces, with careers, lifestyles, interests, and goals. Something I could have lasting and productive relationships with. I ignored what everyone told me my markets should be, and defined my own. As my markets fluctuated, I moved with them, adapting my marketing strategy to remain efficient, always trying to catch 100% of my pie.
We are in the golden age of targeting technology. All manner of services are available to help understand search conversion behavior, click funnels, user interface and experience, geographic modeling, pump-in-pump-out, demographic profiling, lead scoring, inventory optimization, and the list goes on. I’m very fortunate to have worked with some of the leaders in this space, and am very proud to have developed some of this technology. I’ve spent the last year working with some of the brightest people, in and outside of automotive, on creating marketing nano-clusters and behavioral fractals for even more advanced technology on the horizon.
Does it sell more cars? If I brought you a UFO with no operators manual, do you think you could fly it? From what “paranormal science” tells us, the answer is no (unless you have some alien ancestry you don’t know about). You still need people in AND outside of the dealership to use it frequently. Do I think it’s better than chasing the 0.64%? You can’t convince me otherwise.
If you’ve stuck with this series this long, I hope you now realize there are many variables in the application of technology as it pertains to selling cars. Despite the Internet’s massive disruption to the business model, which has only been amplified by mobile devices, dealerships still have the most important variable in the equation. And, no I don’t mean franchise laws. In the final part of this series, we’ll discuss this variable, and how it can not only preserve the dealership model, but also make it the preferred way of purchasing a vehicle. Stay tuned!