Why the Automotive Industry Needs a More Unique Approach to Marketing The automotive industry has to have a unique approach to marketing. Here's what they need to consider.
By Sergio Alvarez Edited by Chelsea Brown
Opinions expressed by Entrepreneur contributors are their own.
With car sales swinging back up after a pandemic-induced dip, the automotive industry needs to focus on its marketing tactics. Marketing in this ever-changing industry differs significantly from any other. With various segments of this industry — car dealerships, third-party dealers and large car brands — all having unique needs, automotive marketing cannot be approached with a cut-and-paste campaign.
The flaw in current marketing efforts
There is a clear disconnect between dealers and larger automotive organizations. This lack of synergy results in intra-brand competition between vehicle manufacturers and dealership owners. Vehicle manufacturers are investing millions in marketing campaigns that, although aimed at selling their vehicles, ultimately end up sending the customer to an individual dealer. The dealer, in turn, is spending their own budget on marketing too, and that spend may well be duplicative and partially wasteful.
In addition, both the industry and the customer suffer when franchise owners don't actively refer customers to other dealerships if their stock holding is inadequate for the customer's needs. A dealer group, franchised by the same person, that predominantly holds luxury car brands under their umbrella, should not be letting a customer who came into their Mercedes Benz dealership walk away because a BMW might better satisfy their needs. If there is a BMW dealership within the group, the customer should most certainly be referred there — but for the most part, this is not happening.
Going the extra mile for a customer in this way is not just beneficial to that individual customer and the dealer they're being referred to. It is also beneficial to the referring dealer and the industry's reputation as a whole. When automotive customers start to see dealerships working together with the sole goal of serving the customer's needs, the whole narrative starts to shift. The industry is no longer seen as Dealer/Brand A versus Dealer/Brand B, but rather a holistic solution-focused entity that chooses customer satisfaction above all else. That has a brand benefit in itself. Through proper attribution and tracking, both dealerships and franchises can benefit and support each other in the process.
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Understanding the customer
One of the most important ways that marketing in the automotive industry is different lies in the customer's brand loyalty. While the occasional buyer will be brand-insistent, the vast majority of people shopping for cars are looking for the best deal on a specific set of requirements across brands. Their needs, budget and the brands they'll consider change with each car purchase.
The route that customers take to buy a car is also different each time. By the time a prospective customer is standing in a dealership, they have likely already searched for various cars online, compared information on manufacturers' websites, consumed advertisements and engaged on social media. The customer might be standing in your showroom, but it's probably the manufacturer's marketing budget that got them there.
A disjointed process
When attribution tracking is disjointed, the dealership doesn't know where the customer came from, and the manufacturer has no idea that their marketing efforts are actually paying off.
Even in the digital realm, where the ties that bind should be easier to track, incorrect attribution will be common. The only way a manufacturer will be able to track a digital thread to a dealership is if the customer clicks through to that website from theirs. If, for instance, they do a completely separate search for that dealership's website, the link is broken, and the manufacturer will never know they referred business to that franchise.
Marketing is often one of a business's biggest expenses, and it's also one of the budgets that is most frequently wasted due to poor attribution tracking. Even if the team in charge of a marketing budget has extensive experience in tracking sales within various channels, if their view of the data is not holistic, they're most certainly missing pieces of the puzzle. Missing pieces equate to pulling the wrong levers and wasted money.
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The solution
Brand marketing in the automotive industry needs to be able to tie back to customers entering dealerships as well as the portion of customers still interacting with manufacturer marketing efforts. The vehicle manufacturer needs to understand where sales at a dealership level are coming from to determine which of their own marketing efforts are working. In turn, this will help the dealership to better craft its own marketing campaigns.
Franchise or group owners need to base their sales efforts on the customer's needs and not on a once-off brand selection the customer may have made. Needs also change over time, and it is vital for sales and marketing techniques to adjust to an audience whose pain points are different each time they purchase a vehicle.
Related: Don't Apply a "One-Size-Fits-All" Approach to Your Marketing. Do This Instead.
One size does not fit all. The automotive industry is clearly unique in its marketing needs. In order for all companies and franchises within the space to benefit from increased sales and customer reach, the existing processes must be looked at and reworked.
