Does Auto Brand Demand Dictate Market Performance For Dealerships?

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Hale Soucie

Yes and No.

Yes, less demand for your brand means less of that brand sold in relationship to other brands in your market area.  That's a given. However, the demand for your brand does not have to limit your individual dealership’s performance.

Your dealership can increase market share even when demand for your brand is down in a couple ways:

  • Gaining a bigger share of your brand against same brand dealers in your area
  • Gaining used car share: Your competitors here are more than just same brand competition, it's all brands and Independents as well.

Doing both of the above will mitigate the downward trend and in some cases, reverse it.

A good way to think of this is that the demand for your brand is a pie and you want your slice of it. How big of a slice do you want? While the size of the pie may be limited to certain constraints (the demand), this doesn’t mean that you should be getting less or settling for an equal share. And the used cars? Well, the used cars are ice-cream that can either round off your month and make it that much better, or supplement where the pie is lacking.

So how do you do that?  You can give cars away, but let's not go down that road.  The better approach is to systematically keep your marketing in front of the ever changing list of those most likely to buy.

Well, you have to know who those people are first and since that list of people keeps changing (albeit, slowly), you have to have something in place that continues to market to that ever-changing list of people.  (The data does exist, and more importantly, we have it.)

Will they all buy from you?  No.  Will they all buy from anybody?  No, interest in buying does not always ensure a purchase.  However, 'most likely to buy' is a heck of a lot better than 'who knows what they're up to?'; and carpet-bombing the whole area (expensive) which is what most direct marketing is about.

Let’s be candid. Marketing doesn't necessarily cause people to buy.  But, continuous targeted direct marketing acts as a 'tipping point' or accumulative effect of multiple exposures at opportune times.  Keeping your dealership in front of the buyer as much as produces gains in your market share: More 'tipping points'.

Picking up 8, 10, 14 or 20 additional sales each month with this approach makes all the difference, especially if demand for your brand is down.  If demand for your brand is up, then the same principle applies: you can increase your share against same brand dealers in your area.

All of this equates to one thing: a bigger slice of the pie.

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