Are we in a recession? Who knows? Even the experts disagree.
Fact is, we don't have a perfectly clear way to identify a recession. For discussion purposes, let's assume we're in one now.
So what to do when your local market economics wither? You need to make sure your ad campaign generates an even higher return on investment to compensate for fewer market opportunities.
How do you do it? Simple. You “recession-proof” your dealership. Here are a few tips on how to do it:
Present a Superior Value
The consumer wants to see a message from you that can help stretch his or her dollar. Some dealers are moving toward advertising pre-owned cars instead of new cars. These used cars are a great value and the dealer makes money. How can you present a better value?
Consider extended warranties included in the price, free car washes for life, free airport pick up and delivery, free service pick up. You get the picture. The question is: what makes your product a more attractive value than those of your competition?
Offer Zero Percent or Deferred Payment
Americans are not broke. It's just that their cash is tied up in their homes. They overbought during the home sales run up and now, since home sales have stalled, they have to spend “real” after-tax money instead of home-equity money.
This shortage of spending has effectively crimped the “free cash” in the market. On the upper income end of American consumers, these buyers have cash but don't want to take their cash out of their investments, especially in a down stock market. So what to do? Offer zero percent on all cars or a deferred payment. Most dealers can buy down the rate. Even if you never offered this before, now is the time.
Create New Service Standards
Live web chat is being used by busy female home shoppers. They like that they can hold a conversation with you while they are “at work.” (In reality, she is shopping while working.) As a result auto dealers are encouraged to include this function in their web site and to promote this capacity in their television commercials.
Eliminate Wasted Ad Dollars
If you normally buy multiple TV stations on your ad buy, perhaps it's time to choose a few friends from the group of stations. Approach your television station partners and ask for creative support. Ask how these stations can stretch your dollar.
If you approach in the right spirit, most station managers will join your cause and help. In a battle, chose your foxhole friends carefully. This is not the time to demand added value. This is the time to request creative support and new ideas.
Negotiate an annual plan instead of a quarterly buy. TV stations can help you on cost if you help them on planning. Next, analyze your current cost per thousand. Has it slowly increased as you've added day parts to your buys?
You may find better results in reducing your day-part count and instead double spotting lower cost per thousand areas such as local news and syndicated programming.
Look the Part
Market share can be bought on the cheap when your competition stops being aggressive. If you see that a major player goes quiet, then get loud. Pick up their customers and try to keep them.
The smartest thing to do in a recession is to present your business as aggressive and in search of value shoppers. Some clients even open up discount-themed departments to represent this concept visually in their stores.
These are a few ways to stretch your TV advertising dollars in a slow market. Hey, nobody asks for a down economic cycle. So use your resources creatively. Recession proof your dealership right now and, while your competition struggles, you may not even miss a step.
Adam Armbruster is a senior partner in the retail and broadcasting consulting firm Eckstein, Summers, Armbruster & Co. in Red Bank, New Jersey. He is at [email protected] and 941-928-7192.
Questions or comments about this column?
Send us an e-mail at [email protected].