A new year and time again for my favorite blog post of the year!
I love to see the constant progress dealers make to improve their operations. The changes in consumer behavior are always fascinating to witness, and the solutions vendors deliver to the industry play a pivotal role in the success dealers experience.
During the last few years, many solutions and strategies have begun to blur the lines of performance improvement. Let’s be honest, many dealers and vendors continue to miss the mark.
Many ignore the signals indicating the changes necessary to maintain the competitive advantage needed. Even worse, some are in a stagnant cycle of progress due to the solutions used. Six years of record new car sales has made it easy for some industry professionals to become very comfortable with their ways.
We finished 2017 with a total of 17,230,436 units sold, down 1.8% from 2016’s results. Dealers will find it difficult to achieve the same levels of success without paying attention to the changes facing the industry this year.
Many have become complacent. Complacency breeds mediocrity. It’s everyone’s responsibility to identify these trends and adapt accordingly to ensure continued success.
This year’s Automotive Marketing Predictions include ideas about:
- How dealers will change the way consumers shop and buy.
- How vendors will change the way they show value to dealers.
- How connected cars will be marketed to consumers.
How dealers will change the way consumer shop and buy vehicles.
Subscription-based ownership models will increase.
Expect to see more medium and large dealer groups introduce new vehicle buying alternatives. The new dealership programs will provide a different level of experiences and flexibility that will have a massive impact on the concept of vehicle ownership.
We could see a ripple effect from these models as they change the way consumers handle traditional activities such as insurance and vehicle maintenance.
I had the opportunity to sit down with an old friend, and one of the top automotive professionals in the industry, to ask a few questions about their new car buying program – Kevin Frye, eCommerce Director for the Jeff Wyler Automotive Family.
EM: What were the key factors that led the Jeff Wyler Automotive Family to decide to start the Wyler FastLane program?
KF: Simple. Our goal is to continue to grow and become more consumer-facing every day. Wyler FastLane allows us to provide a flexible mobility solution to our customers that is personalized and convenient while helping us to become more consumer-facing. In this time of disruption, every dealer, vendor, and OEM should be asking themselves this same question before any move they make.
EM: Does your new FastLane program leverage the Clutch platform?
KF: Yes, we are. The Clutch software engine provides machine learning and several years of data to allow us to provide the best experience for our customers. It is important to emphasize that while there are a few dealers that have introduced auto subscription, each dealer is pursuing a different strategy on how to make this work best. This is a very innovative approach that does not come with an instruction book.
EM: How has the internal response been towards the Wyler FastLane program and how do you see this affecting your group’s culture?
KF: Everyone that I have talked to about Wyler FastLane is very excited, especially here within the Jeff Wyler Automotive Family. Our culture is to pioneer and innovate to make our industry better, and Wyler FastLane fits into that perfectly.
EM: What other types of automotive consumer behavior changes are you anticipating for 2018?
KF: We are the first, and I believe, the only dealer in the country that has developed augmented reality solutions internally that we are using in the dealership showroom to better engage our shoppers. This past December we were the first in our market to introduce virtual reality test drives on our websites. Why do I share these Two examples? Our consumers’ expectations are rising each year, and our goal is to exceed those expectations wherever we can – while becoming more consumer-facing.
As disruption faces our industry, we must recognize that the best people to disrupt our industry are ourselves. We must do this with strong leadership, and a genuine goal of becoming more consumer-facing in every aspect of our business.
EM: Thank you, Kevin. Appreciate you sharing your insight with the community. Best of luck in 2018, we’re all anxious to hear about your successes with the FastLane program. (I would have already signed up if I lived in one of your markets!)
I also believe we’ll finally see more OEM’s will also introduce their versions of subscription-based buying programs. Cadillac launched their Book by Cadillac last year with minimal fanfare in three markets. Book by Cadillac provides access to several vehicles and multiple swaps (30!) allowed over an 18-month subscription term.
A common misconception is the belief that Millenials aren’t buying cars. They are buying cars; they’re simply waiting longer to buy a vehicle due to the ride-sharing options available.
Another item contributing to their delay is a simple fact – used car quality is the best it’s ever been vehicles are lasting longer, and the average age of vehicles on the road is at its highest point ever at 11.6 years. In California, the country’s biggest car market, Millennials outpaced Baby-Boomers for the first time as car buyers. Millennials’ new-car market share jumped to 28% in 2015.
Car shoppers will expect faster and more relevant results.
When shoppers are ready to buy a new or used vehicle, they’re looking for helpful, specific information. When buyers can’t find incentive data, lease payments and finance offers instantly, they get frustrated and lose trust.
Dealers need to evaluate their current marketing process and determine its ability to merchandise each make and model available for sale. The most effective automotive marketing solutions in 2018 will provide dealers the ability to accomplish the following activities easier and faster, using one convenient solution.
- Publish vehicle offers with payments to your website in real-time
- Deliver paid search ads with contextual pricing
- Build responsive body-style and model-specific vehicle landing pages with their respective transactional data
- Create email marketing content for instant campaign delivery
- Distribute merchandised vehicles to your social media channels
Dealers will also realize the importance of relevancy as a cornerstone element of their marketing strategy. Here is several items dealer must focus on in 2018 to gain a competitive edge as consumer search behavior, expectations, and search engine technology changes.
We all need to pay attention to the behaviors that become familiar and accepted as the “new normal.”
- Organic click-through rates are important. Highly relevant landing pages with content that solves the user’s problems are literally what Google recommends and what they want to see when crawling your website. Your content must match the user’s intent!
- Dwell Time will remain a high-priority item. This is the time between a user clicking on your search result, landing on your page, and then returning to the search results page. Google watches this time closely on every click to determine the quality of the page. Short dwell times are not good.
- Long form content pages rank higher than pages with shorter, less relevant content.
- Voice search behaviors cannot be ignored in 2018.
- By 2022 55% of US homes with have voice-enabled smart speakers. (I have four already!)
- 60% of people currently using voice search just started in the past 12 months.
- 40% of adults now use voice search at least once a day.
- By 2020 50% of all searches will be done by voice. Yes. WIthin 24 months.
- I expect to see voice search to be integrated into Google Analytics and Google Seach Console. (Remember when mobile devices were first noticed in the mid-2000’s? Watch the same thing happen.)
The push for marketing relevance will be extremely important as each one of these behavioral trends continues to grow in 2018. Longer, specific content which matches buyer intent will improve voice related search experiences.
Mobile-first indexing will improve shopper experiences.
Google’s Mobile-first index will be completed in 2018. Pages will now be indexed from the mobile user’s perspective – not solely from the desktop user’s view as it has always been done.
What does this mean?
Everyone knows that Google prefers responsive websites. Google gave us all plenty of time to prepare for this event over the past few years. You would think more people would pay attention to the things Google says it likes.
Every year, “This is the year of mobile!” is repeated. 2018 will finally be the year mobile-first indexing affects the search results displayed.
Most car dealers won’t notice anything different if they’re using a responsive website and they provide their users with the same excellent mobile user experiences that mimic their desktop sites.
However, dealers using sites considered to be adaptive, other forms of adaptive platforms, and different mobile structures (m.) may not fare as well as smart kids in class using responsive platforms.
Non-responsive sites don’t always show the same content and may not allow users to perform the same functions. It’s that simple!
How should you prepare for site mobile-first indexing?
- Make simpler click paths from home page and lower level page links.
- Don’t make users click four links deep to get the info they’re searching for.
- The biggest culprit of poor click paths? Pages showing lease deals, finance payments, and manufacturer incentives.
- Fast load times will be a priority – customers remember slow mobile pages and won’t come back again.
- Easily digestible content formats – unordered lists, numbered lists, interactive content, and more video!
- Google wants the same high-quality desktop experience available on fast mobile devices.
- Make sure your SEO elements such as page titles and meta descriptions are descriptive and unique.
- Google says their magic number for unordered lists is nine bullets.
- Show helpful content that answers specific questions and answers. This helps Google find the best content for featured snippets.
Car shoppers will use more online eCommerce solutions.
Dealer Inspire’s Online Shopper sees a 40% conversion rate to lead. 5% of consumers will complete an online credit application and move on to the next steps. Mid-size dealerships using their solution are also averaging one sale per day via Online Shopper. They claim dealers are resulting in grosses that match the dealership average or better.
“Our industry is in the infancy of enabling the consumer to purchase a vehicle online. Expect automated service contracts and paperwork in 2018 from multiple companies including Dealer Inspire.” Says, Joe Chura, CEO of Dealer Inspire.
Dealers want more automation, and these type of solutions can deliver a nearly automated process. This poses an interesting dilemma. Dealers may be seeking efficiency and productivity, but this doesn’t exclude them from managing the process and providing an exceptional in-store experience. This will accelerate the path to the sale, not guarantee 100% customer satisfaction.
Used car leasing will increase.
The number of used vehicles available to the market will continue to rise in 2018. In 2016, there were 3 million lease returns. 2017 had approximately 3.5 million lease returns and may reach nearly 4 million used cars returning in 2018. Used cars sales estimates for 2018 are expected to hit 40 million vehicles.
Vehicle quality is excellent, supply will be high, and demand for these vehicles will remain strong as these factors put pressure on new vehicle pricing and incentives.
Lease returns are pushing used car values down and presenting exceptional values for price-conscious buyers. These buyers are not just poor-credit buyers either. Prime-credit used car consumers have risen to 55% of the market, up from 49% a decade ago per Experian.
There are nearly 30,000 independent dealerships in the U.S. market. Independent dealers who specialize in high quality, late-model, low-mileage vehicles will be positioned well to move used vehicles.
Used car leasing will become another option dealers will consider in 2018 as the depreciation is less significant in the monthly payment of a used lease. I also believe this will represent another favorable ownership alternative to younger buyers.
Used car leases may also provide a new opportunity for customer retention and loyalty. Customer retention rates among lease return owners are higher than regular retail customers.
Plus, vehicle service business is higher among lease customers. 63% of lease customers return for service while only 56% of used car buyers return to the dealership for service.
Dealers will need to evaluate their pricing management processes immediately to avoid stocking inventory priced unfavorably to the market. Be prepared for sudden used car market pricing shifts before you’re buried with losses.
The total number of used cars available to the market combined with the pricing pressures on new car leasing can create dangerous situations for dealers not managing prices consistently.
How vendors will change the way they show value to dealers.
Relationships based on trust – at all levels of the dealership.
It doesn’t matter how great your technology is, what matters the most is the relationship with the people using it every day. There is a significant opportunity for any vendor to change the way they approach their dealership client relationships.
Dealer Principals, General Managers, and Marketing Directors are typically strong leaders. They prefer to make decisions based on facts and not emotions. Fear and greed can drive the worst decisions.
I expect to see a different approach taken towards managing client relationships in 2018. Journey Mapping and similar performance concepts will drive these efforts. The result:
- Improve stronger relationship building
- More efficient communication processes
- Deliver deeper customer paths throughout the lifetime of the relationship.
Vendors who take these relationships for granted and don’t support these initiatives can expect to lose business. Dealers expect guidance at every stage, and if they don’t get it, they’ll look for it elsewhere.
Accountability will reach new levels.
Dealers will face aggressive business objectives in 2018. There will be an increased focus on vendor performance as monthly sales objectives are heavily scrutinized.
This will be accomplished with improved communication processes for the customer journey but mostly from what defines successful performance from the solutions.
A higher level of accountability in 2018 will extend to the dealership marketing staff. Dealers will examine their efficiency and productivity as well. New technology solutions make it easier for marketing processes to execute faster. Difficult questions such as, “Does it need to be done this way?” and “Can it be done faster?” need to be asked.
Trust will play a larger role this year. Dealers are tired of being told they simply need more education. Dealers want to trust the platforms they’re using will deliver the results they’re seeking. And if they can’t, vendors have to be transparent enough to own this fact. Yes, it’s a difficult thing to do, but it’s also the right thing to do for the dealer.
“Too many vendors are still perpetuating old digital marketing myths.” Says Sean Stapleton, CEO, Dealer Teamwork. “The current system is broken. 2018 will be a year of massive change. Dealership professionals will need to work harder and smarter. Half of the dealers will realize their performance won’t improve using the three or four vendors with same outdated solutions they’ve been using. Unfortunately, the other half will continue along their current path, miss their chance to improve, and let their competitors move ahead.”
Dealers should expect to see simpler reporting from their own Google analytics and not third-party reporting solutions. The only dashboard you need to view is either in your Google Analytics or, my favorite, Google Data Studio.
Your reporting should include both behavioral and acquisition-type of activity, while also focusing on metrics that demonstrate the value of your marketing efforts.
Intelligent automation will alter dealership processes – productivity will be watched closely.
I’ll steer clear of talking too much Artifical Intelligence and Machine Learning. These will be buzz words you’ll be sick of hearing by the end of NADA this year if you aren’t already.
Expect a meteoric rise in the use of both of these terms. (Remember the days of “Big Data”?) There are so few solutions that can base its entire foundation upon the claims of AI and ML. And yes, there are industry-leading data mining solutions use these concepts such as AutoAlert to provide massive value sorting large data sets to help create more opportunities to sell cars.
The marketing environment is making a hard shift. It’s moving away from fragmentation to consolidation in products. The winners? Dealers who can use technology differently within a newer operations model that combines different functional roles and simplifies time-wasting activities.
I’m a big fan of the how the technology within the subscription service models can improve our experiences and lifestyle events based on the available data. However, don’t be fooled by those leading their value-propositions with claims that are better suited for the Silicon Valley elite.
Expect to see automotive marketing solutions introduce new functionalities that improve both performance and productivity while also reducing costs. Today’s marketing stack must leverage intelligent automation processes. This is how dealers will connect with more buyers easier than ever.
Connected cars marketing will increase.
Mobile phones became our defacto platform years ago. Our vehicles will become the next platform that connects our lives to the things that are important to us. Connected cars currently create up to 25 GB of data an hour. As this continues to grow so will the opportunities for users to interact with this data without distractions. Expect to see more ways for this data to benefit us via Amazon and Google’s voice-powered technologies.
Vehicles will be positioned as a new, third-place for this data interaction to happen. New vehicles will be marketed as providing seamless, safer driving experiences thanks to smarter algorithms and improved ergonomic interior design.
The new measuring stick will be the next wave of premium vehicles which have minimal controls and rely on voice controls beyond basic vehicle functions. Less interaction with controls, zero distractions, and more integration with your cloud data.
Augmented reality will be introduced into the heads-up display to deliver more information. Vehicle updates, destination-based information, and trip-based data will appear to save us both time and money.
Vehicles will know when parts are about to break and even have the ability to order a new part for preventative maintenance. (“Alexa, please order me new wiper blades!”) Updates regarding your destination will alert you before of your arrival. Construction and emergency data will notify you of potential changes ahead.
Our connected lives have been based on the goal of providing us with more time. Our vehicles will be able to do this as well. Cars have been able to parallel park for years. Soon our cars will be smart enough to enable “predictive parking modes” and find available parking spots. Vehicles can already park themselves in autonomous mode and pick you up when you’re ready.
Expect to see deeper personalization in premium vehicles. Soon our vehicles will have passwords, cloud integration, and even payment gateway access. This will set the stage for wider adoption across more brands and models.
Subscription-based dealership ownership models will also have the ability to connect vehicles with their owners. Consumers will have the ability to connect their profiles to the subscription platforms to create new ownership experiences based on life-events and their daily calendars.
Imagine your current vehicle is connected to your calendar, knows you have a weekend trip planned and automatically recommends, reserves and delivers a replacement vehicle for your trip.
All of these experiences will provide new marketing opportunities. Dealers will have the chance to provide detailed content on connected car experiences that satisfy the “Want to know” need and help drive them to a “Want to do” moment faster.
Predictions from the automotive community.
Sean Stapleton Tier 2 adverting will be eliminated by several OEM’s!
- With an impending downturn, getting lean will become as important as getting leads.
- Automation keeps winning. As we lean up, dealership operators will be wearing more hats and will rely more on ‘Tap on the Shoulder’ technology in the form of mobile alerts and notifications.
- As the data deluge reaches ridiculous levels, dealers will insist on digestible data with limited real-world KPIs.
- Expect a continued effort by dealership service departments to finally take an organic search stand against national repair companies that are currently kicking their asses.
- There will be only one way for businesses to post on their Facebook page….pay for it.
- Vendors that are exploiting holes on Facebook and Google will face challenges from…..well, Facebook and Google. This business is too big for them not to notice.
- Rural dealers will unknowingly take power and become bigger targets for larger dealer groups.
- The self-professed, hyper-niched Guru Sales Trainer herd will thin. The full dealership, net profit-based dealership collaborators will be more in demand.
- Thanks to intelligent and predictive search technology, dealers will gain organic search ground on CarGurus and Cars .com and invade page one.
- The hot girls at the search party are named Alexa, Siri, and Google Assistant. I predict that the latter will get a sexy name soon. Who has time to type, anyway?
- Assigning attribution weight will be a hot debate. Companies will do their best to convince that they have the best way to formulate attribution. They will all claim victory. Last click will finally become an 8-track tape.
Ed Brooks 2018 will be the year that ‘Digital Retailing’ becomes mainstream – at least starts to become mainstream. Driven by the large dealer groups, by cutting-edge dealers who are always looking for the opportunities change brings, and by the ‘disruptors’ like Carvana, more and more dealerships will feel the heat and begin adding ‘Digital Retailing’ modules into their websites. Their success will depend on more the dealership culture and mindset than on technology.
Bill Playford I will try to make an automotive prediction that doesn’t include blockchain. Oh, crap, I just said it.The 2018 forecast calls for more coalition between Tier One suppliers and OEMs to further consolidate efforts on the autonomous driving front.
Look for more action by the telecoms to get involved, as mobile devices will provide the missing link to V2V communications.Forward leaning metro dealers will skip the buy-online investment, and instead lay the framework for fleet management. As OEMs conspicuously move away from the retail model, committed dealers will be proactive in protecting the business they’ve worked so hard to maintain.
Also, look for the conglomeration of rural and exurban dealerships to gain steam, as those are the dealerships that will serve the future of retail. Don’t be surprised if these conglomerates start doing away with commission-based compensation.On the marketing front, machine learning will continue to get smarter.
Look for true nano target advertising from the companies on the bleeding edge. The ability to offer the right car, at the right price, at the right time, to the right audience, through the right media channel is totally possible. Moreover, the technology exists to source the right inventory to make the process repeatable. This will create a seismic shift in advertising, meaning much of the currently wasted budget can be reallocated to other efforts (hopefully, it’s directed towards human resource management).
Finally, I’m going to call 2018 the year of the pretender. The language from the vendor community is going to sound the same, but the results will be wildly different. Anyone can put a V12 sticker on a trunk lid, but when it comes time to open the hood, most will still have a wheezing, decrepit, four-cylinder still burning oil.
Dealerships need to start having intelligent conversations when it comes to creating and maintaining vendor relationships. If they do not take the time to do the research, they will be paying too much, no matter how it’s measured.
Joshua Burton Copeland – Simple, dealers that provide an exceptional in-store customer experience will continue to see gains. Dealers that continue to be distracted by “shiny object” products and services will continue to slip and wonder why. Digital retailing will not take off in 2018.
The pendulum is clearly swinging back to an in-store experience from getting everything done online. Dealers should focus on doing a great job in both areas, but concentrate on providing a world-class customer service experience that people will jump online and write about in a review. In 2018 we will see customers traveling greater distances to buy from dealers who provide the whole experience.
Michael Donovan – You will be able to track all of your marketing activities through the Google platform without having to pay companies to do it for you. Oh sorry, that was 2017. For 2018 AI will play a more significant role, and Facebook will be at an all-time high for being able to track vehicle sales back to Facebook marketing efforts.
Owen Moon – 2018 is the year that more dealers will start to focus their marketing efforts on Fixed Ops. This includes attracting new service business, bringing back lost service customers, and turning service customers into sales opportunities more frequently.
Lee Drake – My prediction for next year: Security and SSL is a key change that will influence the successful use of your sites. With the latest changes to chrome, edge and other desktop browsers eventually moving to mobile browsers on Android and Apple if you’re not serving all your pages that have input (search, etc) with an SSL certificate by end of next year your customers will be getting pop up warnings not to enter data on your site.
This is HUGE for heavily search based sites on which most of their content sits on a page with some kind of input. If you’re not serving them by end of this year with SSL you’re probably going to see a dip in desktop browser usage. By end of NEXT year with mobile browser usage.