Automotive Cash Incentive Alternatives

For Dealers Who Can’t Use Cash Incentives (Or Want to Try Something New)

Online incentives are often what convince hesitant website visitors into actual leads.  While most dealerships use cash incentives, some manufacturers or state governments don’t permit this type of Internet offering.  For example, both Honda and Acura have very strict guidelines about what their dealers can offer, and states like Illinois, California and Texas have legal guidelines that businesses must follow.  It’s extremely important that you check and are up to date with both OEM and government guidelines (your State Attorney General’s office is a good place to look).  Both entities are generous with their fines and typically not afraid to hand them out.

If you’re at a dealership that either can’t offer cash incentives, or just want to try something new, what are your options? Thinking outside of the box will help here…what do your customers want?  Take a look at who your customers are.  Consider conducting a market segmentation to find out what is important to them so that you can offer what they want.  If you can find out the types of things that consumers want but aren’t buying, you’ll be better able to offer non-cash incentives that are relevant and motivating for these potential customers.

Of the non-cash incentives that I’ve seen work are lately, the most common seems to be a gas card.  The trick to getting this to work is making it a decent dollar amount.  Those $25 and even $50 cards aren’t going to drive much traffic.  Consider making them available to all who test drive instead of just purchase a car to up your conversion percentage.   Also, service and accessories coupons are often successful, but like gas cards, have to be for a significant amount to really draw traffic in.

There are some dealerships that, for one reason or another, are unable to use anything worth monetary value.  In this instance, wording is extremely important.  Make the customer feel that they will be getting a special price by shopping online by offering them “hassle-free pricing,” or depending on your state/OEM, a “special Internet price.”  Again, it’s necessary to check with the proper “higher-ups” to ensure you’re not breaking any rules here.

No matter what type of incentive you’re using, persuasive keywords will paint a nice picture in the head of your website visitor.  Break out the thesaurus and use those calls-to-action.  Invest in an advertising book specializing in sales words (leave a comment if you’d like me to recommend a few) to really clinch that conversion.  The words and phrases in these specialty books can help you distinguish yourself from other dealerships just by using the right language.

Because incentives have the ability to heavily impact your conversion rates, they need to be effective.  When something (OEM, state government) limits what you can use to draw customers in, it’s time to get creative.  Buyers want more than just money, so appeal to their desire for “things” to help them justify taking the next step in their buying process…whether that means submitting their information, taking a test drive, or buying their new vehicle.

Car Buyer Incentivizing

Get Creative with Your Dealership’s Incentives

I’m sure it’s no surprise that high gas prices are causing most Americans to cut back in other areas of their life, especially in those things considered as luxury items.  Edmunds.com recently conducted a survey showing that 95% of Americans are changing their lifestyle due to the recent increase in gas prices.

Ever wonder exactly what types of things people are cutting back on?  A new study by WebRidesTV.com answers this question.  According to their survey, the top three categories in which people expect to cut back are:

  • Travel (42.35%)
  • Dining Out (40.98%)
  • Consumer Electronics (26.57%)

Incorporate this information into your incentive campaign; use it as a way to reward customers and entice leads.  Use incentives that help satisfy your potential customers desire to fill the categories where they’ve admitted spending is down.

Get creative.  Go beyond the typical $50 gift card for local restaurant favorites.  While this is a great starting point, increase your offer for a raffle or for those that buy new vehicles.  Set up a “Night on the Town,” complete with dinner, movie, and the use of a limousine (or use a luxury vehicle from your dealership for added branding).  While the actual cost behind this is fairly low, the perceived value to your potential customers will be exponentially greater.

A lot of dealerships are offering gas cards as incentives.  How can you raise the perceived value besides simply increasing the denominational value?  Throw in a night’s stay at a hotel a few towns over, or maybe tickets to a sporting event, and you’ve just given your customers an instant vacation.  Again, the extra cost to your dealership is minuscule compared to the added perceived value you’re giving to your consumers.

For electronics, the iPod is a common giveaway item.  Why not offer to pre-load it with bands of your customer’s choice, or a collection of local bands?  Giving away a GPS?  Load their home and work addresses in it before they pick up the car.  These won’t cost your dealership much, or anything at all, but will set you miles above your competition.

Because many people are holding back on car purchases, give them an opportunity to fulfill another area that they’ve cut back on.  Your dealership spends minimal money compared to the perceived value to your customer, and everyone’s a winner.

Automotive Sales Targeting

Get to Know Your Customer

The 2008 Pied Piper Prospect Satisfaction Index® U.S. Auto Industry Study set out to study how customers were treated while shopping for new vehicles.  They used mystery shoppers to visit auto dealerships nationwide who reported back about the customer service they received.  Among many other, interesting facts, the study found that auto sales people were more likely to:

  • Mention the availability of different financing options.
  • Handle any required wait professionally.
  • Make special orders simple and easy.

Sales people were less likely, however, to ask info-gathering questions like:

  • Why the shopper was considering the particular brand.
  • What the customer’s price range was.
  • How the vehicle would be used and by whom.

Judging by the types of questions these sales people asked, it appears as though their main goal is to make the car shopping process quicker and easier for potential buyers.  While this will help improve the experience of your shoppers, it’s important that it go beyond this.  Customer service shouldn’t stop at the efficiency and ease of the transaction.

It is extremely important that your sales people are actually finding out what their customers want and need their cars for.  Many shoppers will come into the showroom, full of facts and figures that they found on the Internet, but it’s still the job of a sales person to discuss the car choice and make sure it’s the right fit.

It can be tempting to get the sale and get out, quickly moving on to the next.  However, your long term sales, referrals, and overall customer satisfaction will be much higher if you take the time to ensure your customers are getting a vehicle that is right for them, their lifestyle, and their budget.

If this isn’t incentive enough, think about the possibilities of an up-sell.  Asking what the budget is, the down payment amount, or their ideal monthly payment all open the door to finding a “better” vehicle to fit their needs.  When you find out more about the buyer and their lifestyle, you have more room to negotiate and open their eyes to the vehicles they could end up wanting and buying.

As a sales person, it’s imperative that you know your product; but it’s also extremely advantageous to know your customers.

Automotive Market Segmenting

Dealership Market Segmentation 101

One of our most visited blog posts talks about using market segmentation and customer profiles to attract used car buyers.  The study was pretty general, and split pre-owned car buyers into only four categories.  Since there seems to be an interest in the concept of market segmentation, I wanted to give a brief, simplified overview of how to conduct one for your own dealership.

Let me define what I mean by market segmentation.  It involves taking your customer base, both past and future, and separating it into smaller segments of people grouped by shared characteristics.  This allows you to market to, appeal to, and focus on the specific groups that are most likely to buy, increasing your marketing ROI.

Even Ford is tightening up their segmentation.  Rumor has it that when the 2009 F-150 is released, the marketing focus will be on promoting it as a work truck, not trying to appeal to everyday drivers who will most likely be turned off by it’s low MPG rating.

The first step in creating a market segmentation is to decide what you will “segment” by.  Start with a huge bucket list of criteria and characteristics you can use to separate and group your customers.  Throw in everything you can think of; you’ll narrow it down later.  The two types of characteristics most likely to be helpful to your dealership are demographic (age, gender, location, etc.) and psychographic (lifestyle, family stage, personality, etc.).

From the long list you’ve created, decide which factors are most important and relevant.  For example, if you live in an area where the population is generally homogenic (made up of similar people), then dividing people by zip code wouldn’t make much sense.  Take these chosen factors, and start separating your customers into groups, creating customer profiles.  This may take some playing around with to determine which factors will most appropriately group your customers.

You can do a market segment for your entire dealership, or drill down into Make or even Model to determine who your customers and future customers are.

Often the most difficult part of segmenting your market is getting information about your customers.

  • Use Your CRM: Do some data mining, especially if your dealership has been good about collecting and recording customer information there.
  • Research Online: The US Census website has a wealth of demographic information.  While this may not be specific to who is buying or will buy from your dealership, it will help you get an idea of who is buying on a more general level.  For more local info, try doing an online search for “demographic data” and your location.
  • Ask: Send surveys, take notes while selling, call your customers, or even shoot them a quick email.  This is often the most effective and accurate way to interpret who is and who will be buying.

When the market is slow, it pays to know who you’ve sold to and who you could be selling to.  Exploring market segmentation can help you drill down your marketing and sales techniques, focusing where you need to, and ultimately, increasing your sales.

Driving Automotive Conversion

Use Your Online Efforts to Help Convert

In Internet sales, the conversion from anonymous web visitor to known sales lead is the necessary first step when making a sale.  Your web visitors decide when they want to offer up their contact info and start communicating with your dealership, so in order to convert your web traffic into customers, they need to be able to interact with your site and make themselves known.  This needs to be the number one goal of your site, and everything should work towards that goal.

Using identifiable and trackable web tools like effective incentive campaigns, a virtual assistant and engaging multimedia will make it as easy as possible for them to submit their contact information.  Because these types of tools make it easier for web visitors to interact and connect with your dealership, DealerOn has found that when dealers use them, the number of visitors that convert into leads is increased, often doubled.
After you’ve been able to establish contact with your web visitors, it’s important to convert them from sales leads into sales.  Although you can’t force them into taking the next step on the road to sale if they aren’t ready, you can lead them through the sales process.
Just like web tools can help you convert visitors into leads, use lead nurturing to turn these leads into customers.  Sending surveys will allow you to find out where leads are in each sale, making sure your follow-up is appropriate for their buying status.  Use follow-up emails to keep in regular and timely contact with your sales leads.  This will allow you to further the communication that your website facilitated, moving you closer to making the sale and help to complete the conversion process.

Make sure that your lead nurturing efforts always include a strong call to action in each email, phone call, or voicemail to let your leads know the benefits of taking the next step, as well as how to do so when they’re ready.  It’s important to ensure your leads know how to convert into a sale when they want to.

Focusing your website around interacting and communicating with your website visitors will convert more of them into sales leads.  You can then use your lead nurturing to direct your leads through the sales process and convert them to customers.

How do you structure your website to help you convert these visitors to leads?  Lead us through what works for your dealership to get people through the conversion process and into your showroom.