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It should not come as any surprise in 2016 to discover that 97% of your customers now use the internet as part of their buying process. What might surprise you, based on analysis of hundreds of thousands of sales leads, is that only 20% of customers pick up the phone or make an email enquiry beforehand. In other words, the first point of actual contact for the majority of dealerships and customers alike is when they walk onto your forecourt.
This matters a great deal when it comes to analysing how effective your marketing spend is – and here is where data can tell us a very interesting story about what kind of cars stimulate enquiries, and which stimulate walk-ins. This is particularly pertinent for franchised dealerships.
Most franchised dealers hold what we call ‘non indigenous stock’ on their forecourt. These are cars normally taken as part exchanges that do not belong to the franchise: a customer trades their Nissan in for a Toyota. The dealership then has to move that Nissan, which is where things get interesting in marketing terms.
With a wealth of franchise expertise, market knowledge and comparable stock to draw on, the dealer will price their used franchised stock at more or less exactly the right level right away.
With non-indigenous stock, most dealerships take a best estimate from Parkers or Glass’s, or by simply doing quick loose valuations by looking for similar cars online. Because of that small degree of uncertainty, the dealership is likely to pitch the car somewhere slightly lower than actual market value to get it shifted as quickly as possible.
For buyers, this creates two potential points of interest. Firstly, the car is likely to be slightly cheaper than the equivalent car sold at a dealership of the correct franchise. Secondly, it also raises a degree of doubt: this is a Nissan car, but it is at Toyota dealership. This prompts the most common type of enquiry we see at Trusted Dealers: “is this car in stock?”
Finally, the reality for most mass-market cars at franchised dealerships is this: if a customer wants a Vauxhall Astra, then a visit to any Vauxhall dealership will offer a big choice of cars. Anyone who has seen a couple of cars at a certain location can simply walk in fairly certain they will be able to find roughly the right car just waiting for them and does not necessarily feel the need to enquire beforehand.
This means online marketing is critically important to generate the walk-ins that actually remain the biggest enquiry source you have – even though those leads are the least transparent in terms of direct attribution. The saying “all that glisters is not gold” is important to remember when looking solely to phone or email enquiries to evaluate your marketing spend.