Automotive Marketing In A Recession
Automotive Marketing in a Recession
Is we is or is we ain't?
Everybody seems afraid of using the R word right now, but the times they are a-changing. Delinquencies, repossessions, interest rates, and price reluctance are up. Loan approval and traffic are down. These are the facts and the facts are not in dispute.
The only thing that matters is what are you going to do about it.
How To Sell More Cars Town Hall
recorded live January 11, 2023
Terry Lancaster 0:00
Welcome everybody to the How to sell more cars townhall how to sell more podcasts. And I don't know if any of you have seen the movie most of you probably aren't aren't old enough to have seen this but the movie The graduate is Dustin Hoffman movie from back in the 60s hlta tell you nobody welcome aboard the the movie. The movie was the graduate Dustin Hoffman was it was a recent college graduate and Mrs. Robinson was trying to seduce him. And he's had he's at a cocktail party doesn't often recent college graduate, get his get his diploma out and he's at a cocktail party and some of the older gentlemen at the cocktail party are talking to him about his future. What are you going to do in the future and one of the guys he's gonna get glasses and he leans over. He leans over and says, plastics, just one word, plastics. That's where the future is plastics. So today, January 11 2023. If I was talking to a recent graduate or a young man or woman who's looking for something to do with their future, and in the immediate future, the conversation might go something like this repo work repo where I was I was working on an article last week for for the independent, the National independent Automobile Dealers Association, wrote an article how to paddle recession proof your store, and I was doing the research for that. And I was interviewing folks and talking to some folks. And one thing I found out, we right now, at this moment in time, we had the highest repossession rate especially among low income buyers. We had the highest repossession rate that we've had an anytime since pre COVID. Since 2019 horoscope came along, everybody, everybody got a check everybody. Everything was going pretty good for a while and people were staying in cars and people were making the payments on their cars and repossessions plummeted and some of the some of the Rebo companies went out of business at that time but the the the repo guy was talking to he said, He's I've never seen anything like this. I've got business lined up as far as I can see. I have major lending institutions coming out of the woodwork right now offering bonuses and long term contracts. And everything they do because they want the the the ability and the capability and then the they want to have access to the repo work because they're expecting a lot of repossessions because we may or may not be in a recession, nobody's officially declared that jet with the carpet is whether in a recession or not the car business is, is wonky, has been blogging for a while, but it's kind of it's kind of flipped.
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As used car inventory rises will automotive marketing budgets?
It seems like at least to me and a lot of the people that we're at, we're at an inflection point and things are going to be different for the next couple of years than maybe they've been for the last couple of years. And we started talking started talking about what can we do to recession proof the business and especially from a marketing standpoint, marketing and sales. What are you going to do differently now that you haven't been doing for the last couple of years and it got you know, the last couple of years is the people have been coming in? It's more question not necessarily finding people to sell to it's finding the things to sell to them. And inventories are rising used car prices are plummeting. So right now everybody's in the market for buyers. I've I spend most of my time writing automotive radio and television spots regarding shifts. And in the last few months, I've had dealers coming out of the woodwork literally just like the Remo meds and I've had dealers this this this week. I had a dealer have not talked to in 10 years. Yeah, I haven't had anything with them. 18 years he called me out of the blue and needed to have a big a big surplus, a surplus sell off and inventory liquidation sale. I've got too many used cars. We need to have a big ol sale like we used to do back in the day and I probably went three or four years without ever using the word clearance or liquidation or anything like that into the ads because it was just silly to talk about that. But things Things are different now. So I started talking to dealers about what are you going to do differently? And there was a couple of things some people will talk about an EO working on fixed ops programs, we spend more time advertising to big shops to get those servers back in there. And that's a small part of what I'm gonna spend most of my time talking about. But the consensus seems to be that we better get back to the knitting we better get back to loving on our customers. More Customer retention.
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Would better customer retention make your dealership recession-proof?
I did it I did a survey in the in house sell more cars townhall fake the focus group on Facebook did a little put a little survey up there as to what are you going to do differently to you know, to make it through whatever kind of economic period we ended. The number one answer from the dealers was we're going to spend more time on customer retention. We're going to focus on customer retention. And honestly, the bar ain't that high. Because another month another survey I saw so I was asking businesses, not just car dealers but businesses in general what percentage of your advertising and marketing budget is focused on returning customers? And the most? The most common answer was zero. We spent exactly $0 On returning customers everybody's everybody loves new and shiny. Everybody loves conquest customers. Everybody loves a new customer. Everybody loves a new sale a new deal. But then we we love them and forget them. We were out the door here two keys, ABC a goodbye. That's, hey, that's ABC gloves, AB sia and they're done. But your former customers are always going to be your best customers and especially right now, especially right now um there's a there's a thing of the car business. And as you know, the last couple of years things have been good. We focus on the in market buyers, that one to 2% of the market, who's in the market. We're going to be buying the cars, they're the fresh shops, they're the ones putting the leads on the websites, they're the one picking up the phone and giving call, but they're only one to 2% of the market. And we spend most of our time, energy and money advertising to them. And even what we advertise most of the most of the money dealers spent most of the money is dealers. Spend is on inventory advertising, especially online. We're going to we're gonna take her inventory, we're gonna put it online, we're gonna put it on the aggregators, we're gonna put it on cars.com and edmunds.com. Everywhere else we're gonna put Facebook ads on there where their inventory and everything is based on the inventory. And that was probably a pretty good strategy is a pretty good strategy you want to get you want that low hanging fruit, that's easy money, you gotta get that, but that what was already a tiny sliver of the market one to 2% is declining, because there are fewer in market buyers in a recession. By definition, there are fewer mortgage borrowers and and most people when they get ready, where they're trying to figure out how we're going to accomplish they would have doubled down on what's been working for them. So they spend more money on inventory ads and on inventory marketing and having sales and reaching out to to get people to come in and buy the car right now. But there's a lot of things in your in your sales pitches and in your marketing that you can talk about that don't have anything to do with the cars that you have or the prices that you charge for them. And then from from big stops to talking about the customer experience that you have with the dealership or with the individual both sales as you're in both and I've talked about this before, you know Bo gets know people him and puts his face out there and people will come in to see Bo not because of the particular Ford that he's got but because they saw Bo talking about his bowling game and they've driven across state lines to get that bow experience. So we want to talk about other things other than the inventory and having the lowest price because inventory and the lowest price may not be the most important thing in people's minds and in even for those that are there's going to be fewer and fewer other in this situation. So you want to talk about things that are more appealing to people to to a to a larger market and the car dealer spending 0% of their money on retention customers and retaining customers. Those retention customers are always always always going to be your biggest tiny bite you're gonna get more views you're gonna get more referrals you're gonna get more repeat business out of people who already know you and like you and trust you. They know you like you and trust you enough to hand you money before so you've already overcome the hurdle. It only makes sense to spend a little more money talking to the people who already know you and like you and trust you and get them to come back and more and even more importantly, a buddy of mine told me that getting someone to spend money with you. I mean, people have to know you like you and trust you to get to spend money with you. But they'll do that they'll take a risk, but they will never take a risk
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In a down market fewer customers are in the market so they have zero interest in your inventory or prices
to refer you until until they completely happen to you. So that's the sign of great trust and those people who know you like us to to refer their mother in law to come visit with him to write those reviews and get them up on up on Google and on DealerRater and everywhere else who are putting their name out there as an advocate for you. So that's the thing I'm recommending to dealers to do for this year as let's let's step back just a little bit, just a little bit from going full bore into into the average advertising and marketing for inventory and low prices and start talking more about the experience start talking more about the reasons that the view of their community just just got through interviewing a guy working on he's a he's a master tech in a dealership in Missouri and they're they're recruiting mass mass master techs, but the thing is that they're reaching out into the community and they spend all day talking about this dealerships participation in the community and the scholarships that they're offering. And they're reaching out and holding those hands to give everybody a little bit of the feel good vibe that people are going to need through whatever whatever tumultuous six, whatever the situation is going to be this coming here. So I'm going to open it up. I'd like to say this isn't a free form conversation. I want to hear from everyone else about what's going on on the ground where you are. And what's your dealership you personally as a salesperson if you're in sales, or is it the dealership standpoint, what are you going to do differently marketing this year. into a situation that may be a little tougher than what we've had for the last couple of years. So if anybody wants to just unmute yourself and hop on here
and we're getting crickets again Rick Kruger come back. I know you got something so sweet. Hey, John. John D
No, John, so um, let's talk about some of the things that you can advertise or that the accent I don't really know if you want to put your in the chat over here, put in the chat, whether you're in sales or whether you're in management so we can so I can I can tailor some of the suggestions that I'm going to make to you as a salesperson, again, more more reaching out to the past people by now, if you're one of the guys just somebody left one dealership, and he came back to another dealership and that's a great opportunity everybody you've ever sold to. Now anytime you move, you need to let them know where, where you're where you're going. Rick Rick there. He does a great job of embedding himself in the community and supporting the people that are around him. If in here, here's what happens a lot of times, especially especially, maybe the first of the year or somebody gets a new job. They get they go crazy on the phone and they started sending out the emails and the messages and the text to people who haven't heard from them in six months. Six years. I'm gonna when the last time they heard from the was oh, oh, I got I got a new email for Terry Jerry was the big Monday sometimes was must be hard now. So if you if you never reach out to people, and every time you do, you're asking for money. That's a red flag. But Rick does such a great job of promoting the people in his community. He's always talking about the people who are around him and the people that and then the small businesses that buy from him, the people that are there, and he's built building his relationships, and anything you can do what that in the article that I wrote for the National independent auto Dealers Association. The thing I suggest is when you make anything you can do to activate your advocates, and as a dealership your advocates are your employees and your customers. We live in the social media world and every single one of your employees has has a couple of anywhere between a couple of 100 and a few 1000 friends on So social media and if you can activate them to actively go out and bring their customers in and bring their bring their mother in law and bring bring their friends to the store. That's that's a given. And if you're if you're if your employees don't like it enough to advocate and evangelize for you, that's probably a sign that you got bigger problems than just the recession coming out. So they should be your biggest advocates and then at activate those the your customers they can be they can be advocates as well whether it is with a bird dog fee, or with or with within anything at bird dog fees and stuff like rebuilds, where you're actively promoting them and promoting their businesses and giving them giving them something to talk about. The the there's a saying that you to find your people and to lift them up, if you will, actually a river cruiser with his camera on everything more. You are a handsome man. So finding your people and lifting them up putting the spotlight on them. And if their psychological reasoning works, one there's the law of reciprocity. If I go out of my way to do something good for you to say something nice about you to make you feel better to help your business. Odds are you're probably going to go out of your way to do something good for me to say something nice about me to help my business. So find your people and lift them up and start doing more stuff to reach the 98% of the market who aren't in the market. Right since 49 now and if that was that was all I had prepared and no one's got anything they want to contribute. We're gonna we're gonna let you out here on the day, Rick, Rick, you come in with the camera on you got to talk. Right? Michael Smith's talking What's up, buddy? Oh, Michael No.
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If you want more customers in your life, do a better job of staying in there lives.
Unknown Speaker 15:53
tips on what to do too. I mean, what I'm trying to do is, is I'm not utilized, for example, send out cards as I should consciously sending out and I don't send out a kumbaya for me. I mean, I don't want to be salesy at all I mean, I I let them know and remind people where I work because you know, I have a back on my Send Out Cards and and staying in touch. But I mean outside that what are some ways you suggest keeping in touch with prior clients?
Terry Lancaster 16:35
Well, so since you know me Send Out Cards is one of my big deal. I sent I sent cards to everyone but I send out cards and especially especially birthdays and Michaels real good about the about about the birthday things. But But, but but SendOutCards is the big one. Um, I saw my father passed away a year and a half ago, and I had to I had to hire a real estate agent to sell his home and I got up and being in the business and I am doing what I do. I know more real estate agents than I could possibly ever begin to name. And the funny thing was I that I ended up helping to hire hire and I didn't even think about okay, well. You know this, this is why I'm going to hire him but after after I hired you and and we got started the house. I came home and looked at my refrigerator and my refrigerator right now has four magnets on it from from this real estate agent he sends out he said he sends out calendars every year for the Tennessee Titans football team for the for the University of Tennessee. University of Tennessee football isn't that predators, calories out sports calendars. And my wall my refrigerator literally looks like a billboard for this guy. And every time I open up there to get me a chicken salad sandwich or whatever I'm trying to get out of the frigerator there Jason strain this is a Jake Jason strain and trust Realty. And he's right there and he said he said out of the thing, a recipe so anything that you can do, whether it's a card, I mean there's there's a lot to be said for physical things that are staying in front of people's in people's face. And that's the main thing is you just got to be in their face, remind them that you're in their life. We everybody says that they want their customers to stay in their life, but they don't really do anything to stay in the customers life. So that means send out cards or calendars or anything that puts you in their life. And that includes maybe giving them a call on their on their birthday, or you know or just being in their life calling them just to just to check on them. Hey, how you been? What's the best thing you know what's the best thing has happened to us since since the last time I talked to you and just making a conscious effort not to stay in their lives because they're customers but because you want to stay in their lives and it and it's a simple if nothing else, just the text I've got I've got a friend of mine. Who that that's that's that's our it's our entire marketing strategy. She sits down every day and sends about 10 to 20 texts to people in her in her database that she hasn't talked to in the last three or four months and says hey, how you doing? I haven't told you in a while. Right? And then you'd have to say hey, we're having a big sale. Hey, how's the car SOG Hey, I hadn't talked to you in a while. How's it going? And of course 9090 some odd percent of the people are going to ignore that. But the people who don't you're going to start a conversation with it any chance you get to start a conversation is a chance to lead to another conversation and Smith specifically if you ask them Hey, Greg, catch up with you. But hey, reminder, do me a favor before you go. Who do you know that might be in the market for a car who's you know that might be trying to sell their car? That because because we're all still looking for for inventory, especially when you get cheaper than what the the auctions are selling for. But, but anything that you could do to stay in their life? I mean, it's not not even a sales thing from it from a salesperson standpoint. I don't even think it has to be a salesman. It has to be you have to be more staying in their lives as a person and reaching out to them and reminding you who you are. Right, you're about to hop in.
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Using the personal touch to sell more cars in a down market
Unknown Speaker 20:31
Sure. So a couple of things that I'm doing is that like when I sell a vehicle I'll jump on Zulu or the local tax assessment website. And I get the addresses to like 20 people around where that customer lives and send them a Hello Neighbor letter. Introducing me and saying hey, this is the only letter that you will ever get. And the reason for it is because one of your neighbors bought a new car recently you may have seen it. But if you bring this in or refer to the flutter and you come and see me you'll qualify for special pricing or, or our internet value, promise price on a used car, you know, so forth and so on. That I give a little background that was my, you know history with the community. And you know my hashtag you know, break it down. There's and you know, telling the Google me because they don't know anything about me. So then, you know, trying to, you know, just simply get my name out to more different people.
Terry Lancaster 21:48
You send those to, to the address, you don't have the names and you're getting on Zillow. You just got the headgear and so you're saying it to a party. So yeah, I'm interesting neighbor, neighbor get an IP address.
Unknown Speaker 22:01
Terry Lancaster 22:05
People calling you from those.
Unknown Speaker 22:07
I'm like about how many like also, like one out of 300 letters I do.
Terry Lancaster 22:15
I mean, still one not one out of 300? Nominal. Yeah,
Unknown Speaker 22:18
yeah. Yeah, that's pretty good return. On the text and sentiment, it does give me the owner's name, but I don't use it because that would just kind of be stripped out. And all that letters are hand written on the envelope. Of course, right. The personal touch was I can do mailing labels, but that's I would throw it away if I saw a mailing label. I wouldn't even open it up.
Terry Lancaster 22:44
Yeah. So especially from someone you don't know.
Unknown Speaker 22:47
Right? So everything's handwritten, except for the letter with two business cards inside. The other thing that I'll do is when I'm all done with the sale, I'll ask, you know, Hey, would you be willing to endorse me to people at your work? And they're like, yeah, so I'll do a little short endorsement video 2030 seconds. And then I'll ask them who is the HR person so then I'm getting contact with the HR person, I'll send that short video via email to them, and give them the ideas and hey, you know, so you just bought a card from me had a great experience. What do you think about you having the benefit to all of your employees making the HR personal and get their deal? Like they came up with the idea to all the employees to give a go to guy if anybody's in the US or new car market and making it the you know, XYZ company? You know, employee benefit,
Unknown Speaker 24:04
Terry Lancaster 24:07
Yeah, that's 100% Activate activating your your, your activating your evangelists, those people who are in the neighborhood with the car, they get a chance, you know, even if they didn't call you odds are they went over to if he had bought bought a car, and you said Bob's extra labor letter, you know, he's probably been mentioned the Divan that hey, this guy, this guy recruiter sent me sent me this letter. So yeah, and that gives him a chance to tell your story.
Unknown Speaker 24:33
Right? Yep. And then also, during the football season, I my son's football team made it all the way to state but the last home game was semi state. So there's about you know, 3800 people in the stands. And so I'm one of the athletic sponsors for the school. And so I hired a somebody to play the electric violin, and sponsored the national anthem. And so I'm going to do that again. Here in February, where they have the biggest turnout for one of the basketball games period coming up in February so sponsored so I'll be my name will be brought out. National Anthem is being played by sponsors sponsored by recruiter at diners, Honda. And then at the end, my name will be brought up again saying hey, thank you, Rick. Thank you, so for playing it. If you ever need a newer used car, Rick makes carbine fun. Go see him at dawn Ersan Yeah, so that's just another little thing cost me 50 bucks, you know, the hardest person to play. So it's well worth it.
Terry Lancaster 25:56
Oh, yeah. And that's something people are gonna remember. And you didn't once mention how many cars you had and which cars you had and unless they cost that's not what it's about.
Unknown Speaker 26:06
Not at all just getting your name and being known. Top of Mind simply, I haven't had been around the committee, you know, so much, even Michael, Telia. And by the way, thanks for the birthday card Mike. But, you know, I'm, I'm known but it's just a matter of keeping to be top of mind. So, that's what's really all about.
Terry Lancaster 26:35
Well, that is because because 98 radio, they've 98% Everybody buys cars, there's 98% of the market. Who's new, they're not gonna they're not they're not seeking out your ads on the internet. They're, they're not thumbing through farming through cars.com. Look, they're never going to see your inventory listings, because they're not in the market. But everybody that football games that are remember they got money. The electric mile in and and Rick and and they might not car tomorrow, but somebody somebody ain't no, he's probably gonna buy a car soon.
Unknown Speaker 27:08
Yeah, I mean, 3% of the communities in the market right now.
Terry Lancaster 27:12
Right? So so and so everybody knows somebody who is in the market. For a car. And here's an interesting, interesting thing. One of the things he said was that, hey, would you be willing to would you be willing to endorse me and support me for getting those reviews online? And I tell people this all the time, because it doesn't. It doesn't logically make sense to me, but I've seen it enough times that I know know that it's true, and that people trust reviews that they read online, from Google and from DealerRater. They trust it exactly the same. Is it their next door neighbor? It doesn't make any difference whether it's a stranger from 1000 miles away, or their next door neighbor who says hey, that Rick's a good guy maybe ought to go talk to Rick, if enough people say it. People will believe.
Unknown Speaker 28:00
Yeah, in the middle of my letter, I even say, hey, please don't take my word for Google me. Right. And then colon, Rick Krueger down there's Yeah. Yep.
Unknown Speaker 28:20
On my emails, I have the line. Don't take my word for it, and I get them the link to my DealerRater reviews. Yeah. Yeah.
Terry Lancaster 28:32
Well, and I'll tell you how important is dealer DealerRater is is the biggest example of this because cars.com was was searching with you know, they're desperately trying to figure out why people buy cars. And they discovered this that one people, people would prefer to know, their sales versus before they got there. They got to say 90% of the customers would rather know have a friend in the car business, a friend at the dealership before they got there because you know, it's like walking into war otherwise, and they found that they found those two stats that 90% of the people would rather know someone at the dealership, and people trust online reviews to the same degree that they trust, personal referrals and cars.com and I don't know how many billions of dollars they gave dealer writer but they went all in they bought DealerRater based basically on those those two things. We got it we got to get into promoting salespersons business and getting reviews because that's what people look for. And that's what people want. Right? So when
Unknown Speaker 29:31
you're looking on cars.com When you click on a specific car, it'll come up the first two people that are deliberate or certified and have the most recent reviews right? It was so those two salespeople on the corner of bad yeah, so people can click on me I get about four leads per month. Simply from the cars.com DealerRater me being Hey, so and so's salesperson that the car store that you're looking at
Who the %@#! is Terry Lancaster?
I help car dealers and salespeople sell more cars, make more money, get more reviews, more referrals, and more repeat business by building deeper, stronger, more authentic relationships. I’ve worked with thousands of dealer principals, managers, and salespeople providing proven strategies for making the cash register ring.
Over the years, I've helped thousands of dealers sell millions of cars by putting the right words in the right order to tell the right story. How can I help you tell yours?
My #1 best selling books BETTER! & How To Sell More Cars have received glowing reviews from around the world thanking me for the actionable, life-changing ideas they present.
I’ve been featured in Automotive News & Forbes, spoken at the NADA national convention and from the TedX stage, and came in second place at my Eighth Grade debate championship.
Winner Winner. Chicken Dinner!
In my personal life, I've survived Cancer... twice. I've had a gun held to my head and a knife held to my throat. I've been inside a building that was hit by a tornado, onboard one boat that sank and two planes that I was sure were about to crash.
I lived through three teenage daughters and I've been married over 35 years... in a row!
When I'm not battling for truth, justice and the American Way, I spend most of my free time, like every other middle-aged, overweight, native southerner, at the ice rink playing hockey.