page contents Automotive Thought Leadership: Ralph Paglia: September 2015 My title page contents

Wednesday, September 30, 2015

What’s Happening in Today’s Auto Industry? (Pt. II) - Automotive Marketing

What’s Happening in Today’s Auto Industry? (Pt. II) - Automotive Digital Marketing 

With automotive markets reacting to the volatility in gas prices, disruptions in the stock market, and the Fed's wavering uncertainty about raising interest rates, the rest of 2015 and all of 2016 look like they may be more difficult than the great sales build ups of 2013 and 2014. One thing is clear, less growth = fewer winners.


Monday, September 28, 2015

Consumer Perception Shows Big Change in Rank for Car Dealers

New Data on Consumer Perception Shows Big Change in Rank for Car Dealers - Automotive Marketing

In regards to the comment by Jeffrey Bonnell on Friday... Yes, Jeff, I agree with you that any survey seeking to assess consumer perception of an entire industry, such as the auto industry is going to include perceptions created by multiple entities within the supply chain. But I do not think I am being "delusional" as you allege... Yes, we can all agree that cars are better built today than as little as ten years ago, and the OEM's have definitely become more accessible and willing to communicate directly with consumers... By the same token, having first hand experience at being one of those nightmarish dealers during the 80's (tossing trade-in keys on the roof, etc.) and having testified in court during a trial for unlawful imprisonment when we would not let a customer leave the dealership without buying a car, I can sincerely attest to the basic truth that car dealers as a whole treat customers better today than we did 30 years ago...
Have the improvements been enough, or even kept pace with OEM's and other retailers? Maybe yes, maybe no, but it is about time that those same stereotypes that me and my car guy brethren helped create a couple generations ago be replaced by something more in tune with the reality that every car dealer I work with today does indeed do everything possible to "do the right thing" with customers, and much more so than at any time in the past.
Yeah, there are still a few knuckleheads out there "slam dunking" there way to "killing bears" and "high grossing" the "mooches" that come onto their lots, but these are a dying breed and I (personally) haven't walked into a truly bad customer service dealership in many years.

Saturday, September 26, 2015

Trade Cycle Infographic: Auto Industry Must Shorten Or SAAR Will Drop!

Trade Cycle Infographic: Auto Industry Must Shorten Or SAAR Will Drop! - Automotive Marketing 

Trade Cycle Infographic:
Auto Industry Must Shorten Ownership Cycle Or SAAR Will Drop!


AutoAlert Study Highlights Risk to Future Vehicle SAAR Growth without Shortening the Trade Cycle

  • New data from IHS finds length of U.S. vehicle ownership hits record high
According to the latest U.S. vehicle registration data analysis by global market intelligence firm IHS, length of vehicle ownership continues to increase, hitting another all-time high average of 67.9 months – nearly 78 months for new vehicles and 63 months for used vehicles.  This is more than a two year length of ownership increase for all vehicles since 2006.
“How long a consumer holds on to their vehicle has a direct impact on the SAAR and is a key performance indicator of the overall health of the auto industry,” said AutoAlert CEO Brian Skutta.  “To put this in context, the lengthening ownership lifecycle is resulting in consumers buying fewer vehicles over their lifetime giving dealers fewer opportunities to sell them cars if you wait for them to come to you.”
In order to gain direct insight from consumers, AutoAlert conducted an online study surveying over 400 vehicle owners to better understand why consumers are holding on to their vehicles for longer periods.
Some key findings from the AutoAlert Study are:
  • 75% of consumers would be very likely or somewhat likely to trade-in their vehicle today if their monthly payment would remain about the same
  • 49% of survey respondents were not aware they were able to upgrade their current vehicle before their loan or lease is at end-of-term
  • Regardless of how long consumers have owned their current vehicle, 63% of them would like to upgrade their vehicles every three years or less
  • Dealerships that keep their service customers coming back are smart because 57% are very likely or somewhat likely to purchase a new car from the dealership where they service their car
  • 69% of consumer respondents felt it was very important or somewhat important for the place they bought their vehicle to proactively notify them when they are in a position to upgrade their vehicle if it doesn’t impact their monthly car payment
  • More than half of consumers want to be notified about key points in their ownership lifecycle (e.g. warranty is expiring, trade-in value is about to decrease rapidly, before incurring mileage overages on lease, end of contract).
  • The three highest motivating factors to buy or lease a new vehicle were:
    • 83% Better fuel-efficiency
    • 68% Too many repairs to be made on current vehicle
    • 65% Additional safety features
“Dealerships find better stewardship of their customer records through data mining, empowering them to disrupt longer trade cycles down to an average of 36 months - a dramatic increase in trade-cycle velocity," Skutta said. "This type of data-driven engagement with consumers is where dealerships are finding a great return on investment.”
As a leader in data mining and trade-cycle management, AutoAlert is sharing some of its study findings to inform the automotive industry about why consumers are holding on to their vehicles for longer periods and to better equip dealers on how to increase sales.  
Download the white paper to learn more about how your dealership or manufacturer can shorten the trade cycle at
About the Study
AutoAlert conducted an online survey with Survey Sampling International of over 400 vehicle owners in September 2015.  The purpose of the study was to:
  • Understand why consumers are holding on to their vehicles for longer periods
  • Determine what motivates consumers to trade-in their vehicle
  • Measure consumer awareness on their ability to trade-in to a new car before contract end
  • Learn how consumers want to be notified when they are able to upgrade to a newer vehicle
  • Evaluate what services would increase customer retention
  • Analyze differences in responses between generations, gender, length of ownership and location
Survey participants were vehicle owners.  Out of the over 400 participants, 35% were Millennials, 31% were Gen X and 34% were Baby Boomers.
About AutoAlert
AutoAlert is the automotive industry's leading data mining and trade-cycle management platform helping dealerships identify high-quality sales opportunities, increase gross margin and improve customer retention. With AutoAlert, dealerships build long-term client relationships that compound sales, provide better customer service, and make more informed marketing decisions. Founded in 2002, AutoAlert pioneered the equity-mining campaign and a new client engagement methodology through innovative software, marketing and training solutions.

Building Smarter Sales Advisers Will Increase Your Dealer’s Revenue

Building Smarter Sales Advisers Will Increase Your Dealer’s Revenue - Automotive Marketing


Building Smarter Sales Advisors Will Increase Your Dealer’s Revenue

Today’s cars continue to become smarter as they “learn” and adapt to the behaviors of drivers. Cars “listen and learn” about the driver to provide the optimal driving experience.
  • How can your sales advisers learn to engage, optimize and convert women shoppers into buyers and provide the optimal sales experience?
  • What changes can your dealership make to create an ongoing relationship with this demographic, which is 50% of the national market?
  • Women shop at 30% more dealerships than men. How do you differentiate yourself beyond all that noise - and create an effective sales process that lasts beyond a car sale?
How To Do It...
  1. Think emotionally. Emotions matter! Respect and trustworthiness are the top two reasons a woman buys from her sales adviser. While 50% of women are excited about their car purchase, only 30% are confident. Price matters, but emotions carry the day when buying and securing a woman buyer’s satisfaction level.
  2. Respect your shopper’s time. Everyone is busy. Your woman shopper may be on her lunch hour or ready to pick up her kids from school shortly. She certainly isn’t window shopping; she is there to accomplish something. If a woman senses you can’t assist her – even if she said “no, I’m just looking” - she will go elsewhere. And, when buying, the average woman spends 3 hours and 20 minutes at a dealership. See where you can save time to make it quicker and more efficient. Be honest, when was the last time you bought a car from your own dealership?
  3. Visualize Your Best Dealership. How do you help your sales advisers have the highest possible EQ? How do you see your dealership changing if you proactively educate your sales and service advisers to read your buyer’s emotions? What would happen if you empowered them to adjust to advance a sale? What if your hiring procedures screened for people with high EQs as well as strong sales skills?

Thursday, September 24, 2015

Tip #3 - 5 Areas on Used Car Management to Increase Gross & Volume - by Jasen Rice from Lotpop - Automotive Digital Marketing ProCom

Tip #3 - 5 Areas on Used Car Management to Increase Gross & Volume - by Jasen Rice from Lotpop - Automotive Digital Marketing ProCom

Lotpop will provide the people and processes for automotive dealerships to be more successful in todays market. There are 100 times more customers searching online for their next used car, but most managers are so busy with their physical lot that whats going on online with their vehicles gets over looked. Lotpop will help consult you with your used car operation and manage/monitor all the right processes that it takes to be a successful used car dealership.

Tuesday, September 22, 2015

Six ways online dating validates live chat - Automotive Marketing

Six ways online dating validates live chat - Automotive Digital Marketing 

What does this mean for digital marketing in the auto industry? It means a HUGE chunk of the population is using a form of chat messaging to cultivate the most important relationship in their lives. If they’re so comfortable relying on chat for love, don’t you think car dealers would be wise to meet them in this comfort zone?
It’s been nearly 80 years Dale Carnegie basically convinced the sales world the importance of relating to others on terms in their comfort zone. All 15 million copies of How to Win Friends and Influence People explain how a focus on clients and prospects’ interests, and when it comes to auto websites, giving shoppers a chance to communicate on their terms.
People of all ages and demographic strata are in their comfort zone using SMS text messages, Facebook, Instagram, Skype, and a host of two-way chat apps to do more than stay in touch with family and friends. The data say that the ‘comfort zone’ clearly extends to finding love – and cars – is on some kind of digital screen, be it computer, tablet or mobile phone. Live chat in some form another is a way of life for nearly everyone with a mobile device in their hands. This means giving shoppers a chance to use live chat to start the car buying process is a must in today’s market.

In case you’re wondering, the most commonly used term in a profile last year was travel, so presumably a substantial chunk of lovers not only spend a bunch of time using chat, but could probably use a new car to ride off into the sunset with their new companion.

Saturday, September 19, 2015

What's Happening in Today's Auto Industry? (Pt. I)

What's Happening in Today's Auto Industry? (Pt. I) 

Based on recent J.D. Power Automotive research, this year, the automotive industry is going to retail over 14,070,000 vehicle units, which is the second best retail sales performance ever.

However, this rate of growth, though positive, is slowing. This year, retail growth will be 510K vehicle units over last year, versus over 710K units of growth last year. Next year, the projected growth will be much smaller. What does this mean to dealers?

Sunday, September 13, 2015

Toyota Dealers Told Low-Ball Ads No Longer Allowed

Toyota tells dealers that below-invoice ads are taboo

Toyota is following in the footsteps of Honda with its below-invoice advertising ban to help hold retail prices and prevent bait-and-switch tactics. Those include enticing customers with extremely low prices, then pleading that the particular vehicle isn’t available when the customer comes to the store or the low price was based on a laundry list of undisclosed incentives for which the customer doesn’t qualify.

Honda has banned below-invoice pricing for years.

Toyota dealers who violate the rule will be issued a warning for a first offense, according to a dealer who attended a session at Toyota's national meeting, where the ad covenants were detailed. Then, for a second offense, the store could forfeit factory marketing incentives of up to $450 per vehicle for the entire month during which the offense occurred, said the dealer who asked not to be named.

Thursday, September 3, 2015

New Data on Consumer Perception Shows Big Change in Rank for Car Dealers

New Data on Consumer Perception Shows Big Change in Rank for Car Dealers - Automotive Digital Marketing 

New Data on Consumer Perception Shows Big Change in Rank for Car Dealers

Source: Gallup

How Does The Auto Industry Rate When Compared To Other Business Categories For Positive Consumer Perception?

Great News! (for real)
For the past 30+ years I have valiantly stood up for the auto industry as a whole, and car dealers more specifically when it comes to the many disparaging survey results and market research which showed poor results for automotive... Using the BDC standard phone call intro, "I have great news!" may actually be justified in this case. The latest consumer poll from the Gallup organization shows the auto industry has made significant improvements in consumer perception and the trend looks good for car peeps throughout the business.
Car Dealers Bend Over Backwards For Customers
We should all be delighted to know that the car business is now ranked in the top ten of all industry segments for positive consumer perception... And, in my opinion, its about time!!! No other industry that I know of will do more to satisfy a customer. Very few businesses will spend the money or assign the resources to keeping customers well treated, happy and satisfied that a car dealer is willing to do.
Is It Time To Brag?
The car business has been the butt of disparaging comments and snickers for far too many years. So to all my ADM colleagues and car peeps out there, it is time to brag a bit and share this information with the numb skulls that like to disparage the auto industry. We have always been better than that, but now we have the consumer perception that takes years to change headed in the right direction.

The computer industry enjoys the best reputation with consumers, per Gallup, with 69% having a positive view of it versus just 10% with a negative view. The resultant net rating (% positive minutes % negative) of +59 points is almost double-digits ahead of restaurants (+50), the next-highest rated. Some other industries with strong net positive perception include travel (+37), retail (+34), automotive (+27) and publishing (+20), while TV and radio (+12) and advertising and public relations (+7) sit further down the list but still in the green.
Six of the 25 industries measured have a net negative rating (more people having a negative than positive view): education (-2); the legal field (-5); healthcare (-6); pharmaceuticals (-8); oil and gas (-13); and the federal government (-13).
Calm Down and Check Out:
Consumers Still Have Little Trust in Advertising Practitioners’ Hon...
About the Data:
Results for the Gallup poll are based on telephone interviews conducted Aug. 5-9, 2015, with a random sample of 1,011 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.
Each industry was rated by a random subset of approximately 500 respondents. The margin of sampling error is ±6 percentage points at the 95% confidence level. All reported margins of sampling error include computed design effects for weighting.