The inventory shortage is affecting every dealership differently across brands and regions, but the nationwide drop is significant, with new car inventory down close to 15% in the US from February to May, and the number of vehicles priced under $25K on Cars.com fell close to 20% in that same time frame1.
Limited supply has not been all bad news, however, as net profits on a per-vehicle basis have climbed to record highs. With generationally low interest rates, sky-high consumer confidence, and record profit margins, constrained inventory supplies are effectively the one element holding many dealers back from their best sales years ever.
We’re here to help you make the most of this moment with a holistic strategy that will earn you more trade-ins while maximizing the profitability of each VIN sold. Let’s get to work.
1. “Car Shoppers Face Shorter Supply, Rising Prices” – Cars.com Editorial, April 8th 2021
First things first: get your website ready to be a trade-in generating machine. Any advertising efforts you run to acquire vehicles (and the customers that come with them) will fumble your budget at the one yard line if you have a clunky conversion experience.
Our Dealer Inspire team has a ton of strategies to guide website visitors towards instant trade-in conversions, from simple homepage updates to advanced geo-activated mobile coupons. Here are just a few highlights:
On most dealer websites, trade-in messaging can often take a backseat to the latest new car offers, so simply making the path to Trade-In or Sell Your Car prominent right from the homepage can cause a significant spike in engagement. Add your trade-in page to your navbar, place a prominent CTA above the fold, and even display a personalized message to make sure visitors know you want THEIR car.
There are many solid trade-in tools out there that can quickly answer the shopper’s question with an easy experience that generates a lead — but the experience stops there, and then the burden is on your team to follow-up and try to re-engage that shopper at a different time.
Dealer Inspire has made trade-in evaluations a conversation that can automatically generate the lead and estimate with the same ease, and then continue the conversation with your team to schedule an appointment, begin a deal for their new vehicle, and generally provide that great, personal customer service that will hook them to your dealership for good.
This game-changing experience can be launched any button you want — not just your chat embed. On a Dealer Inspire website, you can reprogram all your Value Trade CTAs, personalizers, banners, emails, ads, anything — to bring shoppers directly into an instant trade-in chat (or SMS text).
We could write a whole guide about how powerful this feature can be, especially if your team self-manages to meet these customers in the moment, but for now — how about you just try it out for yourself? Click the button below to demo a trade-in conversation.
Beyond optimizing your website to capture trade-ins, it’s also important to optimize for the shoppers who are just looking for a new vehicle, but can’t find the right match in your inventory right now. Instead of a dead-end experience of getting zero results for the model, color, and trim they wanted — create a path that connects them with your team to find the right vehicle for them like a concierge service.
Using a display banner that specifically triggers on the top of these no or low inventory VRPs is the perfect way to keep your visitors engaged and turn them into leads by simply asking what vehicle they’re looking for. Watch how it works below, and just give us a shout if you’d like to set-up this strategy on your Dealer Inspire website.
Just as important as having the right experience in place on your website is having the right messaging around why people should engage with it. Consumers are being inundated with messages that promise instant trade-in evaluations and even home pick-up from national brands, so your trade-in page needs more than an embedded tool — it needs your “Why Trade/Sell” message.
Walk the visitor through your experience and why they should do business with you. Breaking down your process will build confidence that they can expect a good deal and a convenient, trustworthy experience from your local team. There’s also a great opportunity right now to include a “Why Now” message that drives action by educating consumers that they have short window this summer to get the most for their vehicle before inventory levels restabilize.
But remember: the most powerful messages don’t come from brands, they come from neighbors. You can prove your trade/sell experience is the most convenient and trustworthy in your market by soliciting and sharing reviews from satisfied customers. Turning on DealerRater’s ReviewBuilder® will help you earn a 5X boost in reviews across platforms by automatically texting or emailing each day’s customers.2
2. Based on ReviewBuilderTM metrics from 736 DealerRater Connections Plus customers between 1/1/18 – 7/31/18.
You can then integrate those reviews throughout your digital presence to support and prove your “Why Trade/Sell” messaging, including your homepage, landing page, digital advertising, and even your lead follow-up process. 97% of shoppers look to reviews before choosing a dealership3, so having your real, satisfied customers vouch for you can have a significant impact on your conversion rate by building more trust and confidence throughout your digital marketing.
3. BrightLocal 2019 Local Consumer Review Survey, December 2019
With your website and messaging optimized to win customers during the shortage, it’s now time to get your brand and inventory out there in front of in-market shoppers. And when evaluating what channels and platforms you invest in during this time, it’s critical to make sure you’re not wasting money anywhere that sells you short.
Now is the not the time to race to the bottom. Many other marketplaces make price the primary factor in the shopper’s experience, forcing you to lower prices in order to be seen, avoid being branded as “overpriced”, and earn real opportunities from ready-to-buy shoppers who will trust your pricing.
With fewer vehicles on your lot to sell, you need to put yourself in position to make the very most of every one, so now is the time to focus on profitability per VIN. That starts with listing your inventory where you can showcase the full value of your vehicles and your experience, and continues to eliminating waste in the digital advertising you’re running to acquire customers.
The place to start is the one marketplace you know will merchandise your full value to a pure 100% in-market audience. 92% of those Cars.com shoppers are undecided on where and what to buy, and 50% of them are looking to buy this month, meaning you have the opportunity to drive real buying action with listings that hype your deal with badges, automatically list all the features that support your price, and showcase your amazing team and Why Buy differentiators.4 All of that adds up to a confident, ready-to-buy shoppers, which is why sales from Cars.com have the widest margin among all other marketplaces.5
4. Cars.com Consumer Metrics, Q1 2021
5. Driven Data Classified Lead Quality Index Q1, 2019. Vendors Measured: Autotrader, CarGurus, Cars.com, Edmunds, TrueCar.
And over half of Cars.com shoppers are looking to trade or sell their vehicle6 , putting you in position to generate more profitable deals that also replenish your inventory. The simplest and most effective way to convert that audience is through Dealer Positions, which allow you to block out all competitor and OEM ad placements from your Cars.com VDPs and surround them with your own trade-in specific message to drive action.
6. Cars.com consumer survey conducted May 25-28, 2021; 2,608 responses
The way Cars.com merchandises your vehicle’s full value and brings your dealership is fundamentally different than other marketplaces, and that has an impact well beyond our platform. Our VDPs purposefully drive more traffic off our platform and to your website to drive the shopper deeper into the buying journey and hook them to your dealership. The result is 2X the referral traffic to your website than any other marketplace7, and those shoppers are 2X more likely to buy than shoppers from any other referral source.8
And you don’t have to take our word for it. Watch the video below to learn how to analyze these highly valuable “ghost shoppers” on your website and how to see the complete picture of how referral traffic is impacting your ROI.
7. Dealer Inspire Case Study (Total referral sessions for over 4,000 dealer websites analyzed where medium = referral), Q1 2021
8. Internal Dealer Inspire Data, analyzing cross-shoppers on Cars.com and DI websites, matched back to DMS Sales, January 2021
The foundation of your digital presence is now rock-solid, ready to maximize ROI per sale and acquire more trades to grow your inventory. Now it’s time to rev your demand engine and turn up the volume of shoppers flowing to your website.
That doesn’t just mean spending more money on advertising. Adding more dollars to inefficient campaigns is the fastest way to crushing the margins you just worked hard to protect. Instead, focus your dollars on pure in-market audiences you know for a fact are in the market for a new vehicle, and are also likely to trade.
If that sounds familiar, it’s because it’s our Cars.com audience, now available for you to power your advertising campaigns to ensure you eliminate wasteful spending on lookalike guesses and spend every single dollar on real in-market shoppers across channels.
83% of US car shoppers visited one of Facebook’s Apps during their research sessions9, so Facebook and Instagram are great places to get in front of in-market shoppers and pull them into an active shopping experience. With Cars Social™ you can own your market’s Cars.com audience with pin-point precision, drawing radiuses around your background and even specific competitors you want to gain market share from.
Just like Cars.com VDPs, the focus of these ads is on your vehicles and brand. Our audience data is behind the scenes and your dealership is center stage, recommending relevant vehicles and displaying your Why Buy/Trade messages. To take make the most of every impression during the shortage, you can include creative interspersed with your dynamic vehicles to show customers that they can get top dollar for their trade-in when they upgrade with you.
9. Auto Consumer Study’ by Accenture 2018
If you’re ready to turn your message volume up to 11 to aggressively take market share, in-market video powered by pure audience data is your most powerful solution. By injecting our exclusive first party data into your video advertising through FUEL: In-Market Video, you will become the dominant brand in your market by staying in front of shoppers across platforms, whether it’s scrolling on social or watching their favorite show on streaming apps.
Forward thinking dealers like Manly Honda in California have been utilizing in-market video to promote vehicle acquisition messages to consumers long before the current inventory shortages, and these messages work: driving more trade-ins to the store and helping educate the consumer through engaging and even educational videos. Remember: your audience is used to seeing new vehicle offers every day forever, so messages about how this is the best time to get paid for their vehicle can really breakthrough the noise and get people’s attention.
To arm our dealers with messages that will move the needle in their market, our FUEL creative team has created a full library of creative strategies you can make your own (check out a few below!). Our producers are also here to work with you on something fully custom to best represent your unique brand message.
Keeping your focus on in-market audiences is always the first and most efficient step, but following that up with “pre-market” consumers who you can identify through your own first-party data should be the very next place you turn. Your CRM is chock-full of potential trade-in targets: shoppers who bought three to five years ago, folks whose financing terms are close to finishing — there are many different ways you can slice the data around your previous purchasers and flip them into trade-in/trade-up targets.
And then there’s the extremely valuable audience that drives through your service bay. For example, anytime a customer declines a service recommendation value at $500 or more, it’s extremely likely that they are weighing a “fix it or flip it” decision. Pulling the records of all your recently declined ROs and sending them a message like the example below can help you find valuable trade-in candidates before they even hit the shopping market.
By this point your vehicle and customer acquisition strategies are firing on all cylinders across channels. Now you need to stick the landing with tailored lead follow-ups. It’s so important for your team to fulfill the convenient experience you advertised, and too often shoppers get the same generic responses that don’t acknowledge their specific intent.
It’s important that trade-in leads open by addressing their vehicle, the estimate they received, and the next step in the trade-in process. If your follow-ups open with a generic introduction, the customer will likely feel that the process is starting over instead of quickly progressing, which may not feel like worth their time.
If you’re driving traffic to live trade-in conversations (see: Step 1), you can effectively have these follow-up conversations in the moment through real-time chat or text. And for the trade-in leads that come in through standard forms, consider that most consumers now prefer to communicate with businesses through text than email or phone calls.10
For sales lead follow-ups, make sure to ask about their trade-in and provide the context that they can get more for their vehicle right now because of the shortage to create a sense of urgency. The customer’s advantage in this market can be leveraged into your opportunity to earn their business.
10. ZipWhip U.S. Survey, Fall 2018
If you are ready to get your masters in vehicle acquisition strategy, we have the curriculum to get you there. Our Dealer Inspire hosted a Vehicle Acquisition 301 Webinar that you can know stream on-demand to build on your knowledge from this guide with even more hands-on tips and tricks for maximizing your trade-in potential.
Just because the landscape has changed doesn’t mean you need to settle for less. Let’s talk about how you can leverage our pure audience and solutions to reach and convert more in-market shoppers, for less cost.