4 Marketing Strategies for Overcoming Inventory Shortages
Reports show that the demand for vehicles has surged over the past year. Though the market slowed a bit during the pandemic, people who decided to wait until things returned to normal to purchase vehicles are now ready to take the plunge. At the same time, a growing number of people who own aging vehicles are realizing they need to upgrade.
Under ordinary circumstances, this would be welcome news for dealerships. As we stand right now, though, it’s a bit of a problem. Production slowdowns in the automotive industry during the pandemic led to a shortage of new vehicles. On top of that, people are holding onto the cars they already own much longer than before. That’s creating a deficit of used vehicles as well.
Overcoming Inventory Shortages through Marketing
Those factors and others have left dealerships across the nation struggling to maintain their inventory levels. Even though prospects are out there, dealerships may not have the vehicles they’re looking for. In turn, that’s causing many dealerships to lose both customers and profits. Certain marketing strategies can go a long way toward balancing the scales.
Appeal to Logic and Reason
For dealerships, the ultimate goal is to make sales. For many consumers, though, the thought of purchasing a vehicle is intimidating. Some are worried about getting a vehicle that doesn’t measure up to the one they have. Others are simply concerned about taking on the financial burden of monthly car payments especially if they’ve paid off the vehicles they currently own.
Because of that, appealing to the public to “buy vehicles” may not be the best approach right now. That’s particularly true with so many prospects hit hard by the effects of the pandemic. Instead, think about steering your marketing efforts toward the reasons prospects would be wise to trade in their existing vehicles.
Sell Value Rather Than Vehicles
For example, instead of selling cars specifically, sell the concept of upgrading to a better vehicle. It’s a more cost-effective move for prospects than constantly repairing the aging vehicles they have. Sell the fact that many manufacturers are no longer making vital parts for older models. Because of that, their owners may not be able to repair them if something goes terribly wrong. Isn’t it better to go ahead and upgrade now than to wait until a major unresolvable breakdown happens?
Selling prospects about the need to upgrade could help get them in the door. From there, it’s time to usher them further along your sales funnel. After all, now that they’ve realized they need to upgrade and come to you for help, you happen to have a selection of vehicles they may be interested in. Instead of focusing on the models you don’t have in stock, they may just decide it’s better to choose from among the ones you do.
Ramp up Your Selection of Used Vehicles
Dealerships that sell used vehicles instead of or in addition to new ones already have an advantage right now. Because of that, the shortage of new vehicles may not be having such a dramatic impact on them as it is on those that only sell new models. It’s certainly affecting them, though, considering the fact that people are holding onto the vehicles they own. That still detracts from inventory levels and makes stocking up more difficult.
Concentrating on used vehicle sales still means having an adequate selection for prospects to choose from. As such, reaching out to the members of your target audience who are ready to get rid of the vehicles they currently own is crucial. From there, you’ll need to entice them to bring those vehicles to you rather than taking them elsewhere.
Encourage Trade-Ins
One of the most effective strategies in that regard is advertising that you give customers the highest possible value for their trade-ins. Remember, they’re most likely holding onto those vehicles for one of two reasons. They’re either holding fast in case they can’t find the right newer model to buy or hoping to use them as a down payment for another vehicle. Either way, they don’t want to feel like they’re just giving away the vehicles they’ve bonded with over time.
At the same time, letting them know you’ll take trade-ins in any reasonable condition will also help draw their interest. Some people may be reluctant to bring in vehicles that are beat up or making odd noises because they think your salespeople will laugh them off of the lot rather than making an offer.
Combating a Different Issue
By advertising that you’re willing to offer top prices for trade-ins in any condition, you can encourage prospects to bring in those vehicles. Then, you’ll be able to use them to expand your inventory. Of course, there may be a bit of a downside here.
Most of the trade-ins people offer are bound to need repairs, some of which may be extensive. As such, you may need to work your service team overtime or hire new technicians to help carry the extra load. If you rely on an outside source for vehicle repairs, getting those vehicles back to add to your inventory may be a slow process. It seems there’s a shortage of automotive technicians right now, and many repair shops are booked up months in advance.
Broaden Your Scope
Used car dealerships tend to rely on local customers. Focusing on a highly localized target audience makes perfect sense. After all, there are dealerships in or near virtually every city, and each one is most likely appealing to its own local crowd. Furthermore, until fairly recently, consumers were only willing to travel about 25 miles or so to purchase vehicles.
At this point, though, concentrating primarily on nearby customers could be considered a bad move. With the previously mentioned inventory issues in mind, countless consumers have changed their views on the matter. Based on a recent survey, almost 70 percent of prospective car buyers have decided they’re willing to travel 450 miles or more to find vehicles that meet their needs and expectations. Yes, that even applies to used vehicles.
Expand Your Marketing Radius
With that being the case, broadening your scope is advisable. Otherwise, you could be missing out on hundreds or even thousands of consumers who are in the market for vehicles. Broadening your scope will require a few adjustments to your current marketing strategies and campaigns, though.
Modify Your Marketing Efforts Accordingly
When prospects turn to the internet to look for vehicles, search engines like Google automatically provide lists of dealerships that are closest to them based on their physical locations, areas mentioned in dealerships’ website content, and other factors. If those search engines have reason to believe you only serve a small area, they won’t bring up your dealership in users’ search engine results pages.
That means you may need to create new website content and paid ads that focus on cities in your expanded target zone. Don’t forget to include those areas in your print mail advertising, either. Even in our current digital age, print and direct mail marketing are highly effective. They create more emotional responses among consumers and generate higher conversion rates than many digital measures to name a few of their benefits.
Don’t Overlook Existing Customers
Acquiring new customers is much more costly and difficult than profiting from repeat businesses. Countless dealerships and marketing firms are quick to point out that fact. Statistics indicate that selling to existing customers is at least 50 percent more successful than attracting new business.
You already have a database of existing customers. Why not try to bank on that? Any new vehicles customers purchased a few years ago are used at this point. All those used vehicles you’ve sold over the years are even more used now than they were when you sold them.
Chances are many customers from the past are considering trading in their vehicles. If you send them a thoughtful email or your postcards arrive in their mailboxes, they’ll be more likely to choose you over the competition. Some of them may not be consciously thinking about upgrading at the moment, but hearing from you might get that ball rolling.
Selling More Vehicles Despite Current Challenges
Keeping adequate inventory levels on hand is difficult for most dealerships right now. Revamping your marketing strategies could be the key to overcoming the current challenges. Encourage people to bring you their trade-ins instead of taking them to the competition. Try catching consumers’ attention with value as opposed to vehicles alone. Reach out to more prospects, and draw from existing customers. All those measures can aid in expanding your inventory as well as your sales.
Ready to give your dealership a substantial boost? Contact Vantage Finance and connect with the best F&I partner in the industry today.
