If it has not hit you yet, at some point in the next four months, you will experience varying degrees of panic. Despair will creep into your mind.
When you identify the panic coming on, don’t lose it. Use the feeling to motivate you to pivot your strategic thinking in the coming months.
Start by remembering this article. We both agree you want to quickly get to a place in your marketing where you feel confident and prepared for the coming year.
How do you get there? First, by realizing what is happening and who, or what, the real villain is.
For most dealers, the real villain causing so much panic and despair is the lack of practice dealing with business turbulence. Sometime in the past 12 months, we all could say we woke up and realized we were getting a business wake-up call.
When that realization hits you, your first reactions are confusion, fear and panic—all of which lead to poor decision-making and undesirable outcomes.
Your first job is to understand you must start at the bottom—yes, the bottom. We will start at the purchase funnel’s bottom and work our way back up. We will not focus on the funnel’s top.
By starting at the purchase funnel’s bottom, we have to engage another simple retail philosophy concerning frequency and reach. If you are at the funnel’s top, you will reach more people. For our money, in this market, we must focus marketing efforts on frequency first and then work our way up the purchase funnel.
Your goal should be to reach the people near the funnel’s bottom more often than you ever did in the past four years. Covid pushed us to focus more on reach and less on frequency. Today’s market requires us to think about frequency overreach.
So, our next goal is to ensure we address the real issues and opportunities.
External market conditions will likely be similar for all dealers and probably will not change much through 2024.
Among the issues you have are pricing, interest rates, inflation and gas prices. Even with all these challenges, you still have consumers.
Yes, we still have consumers but not as many as we had in the past four years, and these consumers are slower to pull the trigger. So, you need to add more contact frequency to the consumers lower in the purchase funnel so we can persuade them to give your dealership a shot at their business.
Let me suggest your first step is not to place blame but to just figure out your strategy. Every dealership is going to be in a different position, but everyone is experiencing the same issues or has gone through the process. We are not talking about simply cutting budgets, although you might take that step. This is about recalibrating your strategy to frequency before reach and targeting the right people with the right messaging.
Market Share Is Critical
Dealers’ No. 1 focal point right now should be market share. This is foundational to starting at the purchasing funnel’s bottom. Focusing on market share will ensure you devise an effective plan and strategy to get your fair share of the market.
As with so many, we have been through rough business climates before. However, today’s market might be a little new for some. The simple truth is the names and places may have changed but the strategy is the same.
Here is your step-by-step plan if you are feeling despair and confusion regarding what marketing path to take.
Market Share Analysis
Step 1: Evaluate your market share year-over-year and in the past four months.
Seek out trends and market share changes. Do not be fooled by looking at a sampling that is too big or small. Changes could occur based on geography, products or models.
You want to be very cautious about changing plans just to say you reacted and made changes. Consistency will win with smart adjustments. If you review only the past 10 months and not the last four, you might overreact to a situation you already corrected.
Step 2: Identify any dealerships affecting your market share.
If you have some dealerships stealing your market share, review your marketing to see whether your current plan has enough weight to target these dealerships. Once again, do not react based on one month, as registration data is not 100% accurate in its reporting, as you know.
Step 3: If you find a dealership or two taking more market share, you need to examine them closely.
You want to have a really clear picture of what is happening. Attempt to see whether you can identify the specific ZIP codes, counties or regions where your loss is occurring. The more you can hone in on the area, the easier you can formulate a plan to address the situation. Chances are you will need to make strategic adjustments, not wholesale changes.
Step 4: You probably will find changes come down to product performance.
Try to identify a reduction in an RV product that performed well the year before. If you find a reduction, ask whether someone else is meeting the RV consumer’s needs with a different product and/or a better price point. Has the market shifted enough that the segment has slowed? The answer may be no one is doing better, but a particular RV’s market simply changed over the past year.
Step 5: Finally, you may want to look into a specific model more deeply.
For example, is one stick-and-tin RV really taking off and beginning to outsell the model you have in stock? If this is the case, you must again develop a strategy to address the situation and budget to counteract the change.
Market Conditions
Now, let’s discuss current and future market conditions. At no time in my 30-plus years have I seen market conditions change so quickly. We went from a climate where products were unavailable, consumer interest was high and price points were relatively good to the exact opposite conditions.
Today, we are combating more inventory at significantly higher price points and diminished consumer interest. Add higher interest rates and inflation to the situation now.
On top of everything, we are moving into the slower season for most dealers. The need to rethink your strategies and adjust accordingly now should come as no surprise.
Start with what you learned from your market share evaluation. The data will ensure you are addressing the right problems or opportunities, not just reacting. Then, force yourself to think from the bottom up. Imagine the purchase funnel and work your way up from the bottom.
First, ensure you have the right search strategy in place, focused on your top products and geographies you need to impact. Implement specific product and location campaigns rather than general campaigns. Focus on how to connect with buyers who know what they want—these are the consumers who are willing to pull the trigger on a purchase sooner, not later.
Reallocate the money you had earmarked to expand your reach and awareness and put it to work on specific targeted areas, products or dealerships. Chances are you do not need to change your program wholesale, but you will need to be a little more strategic. Remember, starting with a market share analysis will give you the best adjustments for your money.
Do not panic and do not fret. There is no right or wrong time to start the process. The key, however, is to begin soon.
Here are some caution points.
- Don’t change just for change’s sake. Doing so is like guessing at stock selections.
- Don’t revert to throwing money at things you thought worked before.
- Go with a smart and logical approach to market share and react accordingly.
I know when business conditions can get crazy, the first place to look is marketing. Take your time and make solid, well-informed decisions. This mindset will quickly take you from panic and despair to confidence and conviction.
Remember, the market is still pretty good. Go out and get your fair share by using a little market share analysis and targeting more frequency than reach.
Ron Wheeler is founder and principal at Wheeler Advertising. Ron has been a speaker at RVDA for more than 30 years and at NADA for more than 18 years.
