As we speak to dealers, read local newspapers and watch TV at home and on the road, we see many ad strategies trying to solicit the subprime customer.
Accordingly, I am certain you have asked yourself the question: “Is this working?”
There are many factors to advertising. First you must determine what type of customer you are looking for, then what will be “the irresistible offer.” (Mark Joyner's book by the same name is outstanding.)
The subprime customer should be kept in a credit decision and off your lot as long as possible. This allows you to control the customer, get a payment call secured and then “land the car on the customer.”
However, most of the advertising that is done on a weekly basis by dealerships across the country runs contrary to this. Those ads are image-based in promoting the local store. Or the call to action is: “Come to the store and get a free “ginsu knife.”
In either case the dealership is asking the subprime customer to make a product/brand decision before the credit discussion can be held. The result is the customer is responding to:
- The freebie
- The brand
- Credit concerns
Many dealers are concerned with their image, especially as it pertains to their many years of serving the community, their repeat customers or membership in civic organizations.
Brand image is the perception of your dealership by the consumer. While you want to enjoy the profit generated by subprime sales, protecting your reputation or image is critical.
Why would a dealer want to be “branded” as a subprime store?
This is not to say that there are not successful subprime superstores, especially in larger cities. But I am addressing the majority of dealerships.
Some dealerships have failed to protect their brand image, and as a result have become known as subprime stores.
In the early 1990s, a dealership in my area grew their subprime sales to more than 100 special-finance units per month. They became a subprime success. But it was at the expense of their retail or prime sales, which still suffer today.
If a dealership becomes too strongly identified with subprime, consumers begin to question if they want that store's nameplate on the backs of their vehicles.
They question whether they want their neighbors guessing whether they are “good-credit” or “bad-credit” customers.
Advertise and promote your dealership enough to let people know you help people with credit circumstances. But let most of your subprime advertising be blind.
Blind advertising keeps your dealership's name anonymous, which protects your reputation and brand image.
Additionally, you will engage your prospects only in a credit (vs. product) decision and expand your market share across franchise lines.
Consider what percentage of the market your franchise brand commands nationally and especially in your market. Note: your customer is not thinking about the 100 used cars you carry, only the name on the front sign.
It is also important to place yourself in the subprime customer's shoes and consider the shame that they carry into a car purchase.
They've heard “no” many times and dislike the process of waiting to find out they can't get the car they need or want.
By utilizing 800 numbers and driving the “blind traffic” to a live operator call center you will:
- Give your customer a more pleasurable experience.
- Get a better interview for your subprime department.
- Control the customer and keep them in a credit decision.
- Earn more gross profit.
If you keep the majority of your proactive subprime advertising (targeted direct mail, print ads, billboards, radio and TV), blind, you will enjoy greater benefits and sell more cars.
Tim Shea is president of Great Direct Concepts, a dealership consulting firm. He is at [email protected]. and 800-430 5484.
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