The old approach doesn't work anymore
Business stinks. From the biggest, AutoNation, to a one brand domestic or import store, there have been a30 percent-plus drops for the last four months running. There’s no solace knowing China sold more cars in January than the U.S. for the first time in history.
The future looks doubtful too. Using January ’09 data suggests sales for the entire year will be less than 10 million vehicles. The worst in twenty-five years.
What strategies are car marketers following to – hopefully – reverse the trend? Stop the slide? Regain momentum? Convince the consumer now is the time to buy.
Bright minds are at work on this problem, but unfortunately most strategies are not working for a variety of reasons. I’ve chosen not to use brand names because most auto people know who they are.
A few brands have opted for the old fashioned, “give ‘em a deal” strategy. You know the ad phrases, ala the old George Carlin routine of advertising clichés, “Zero down, low down, no down, easy monthly payments, sale, big sale, huge sale, special values, lim-ited offer, don’t wait, etc.” Companies following this strategy head the list, a dubious dis-tinction, in poor retail business.
Other brands, with captive financing arms have moved the needle a little bit through the offer of credit terms in their marketing communications (remember what that signifies) to buyers of new vehicles. Good concept, not-so-good timing.
Why? Two reasons: one, many potential buyers fear “It’s gonna get worse!” which is parenthetic to low consumer confidence which equates to two, “I really don’t need a new car now mentality.”
The only people who are buying new vehicles now, I’ve been told by CEOs of big retail-ers are, “Those who must get a new vehicle – be it sale or lease – because of a per-sonal or professional reason or need. No need, no new car. Simple as that.
But with sales of fewer than 400 thousand vehicles, something is selling, right?
So what is driving this business? Confidence! Confidence in the brand, the manufac-turer, the dealer, the model, the package and the proposal. And … Experience! Experi-ence with the brand, the manufacturer, the dealer, the model, the package and the pro-posal.
The two brands with sales increases in January have capitalized on confidence and ex-perience and a healthy dose of smart, aka non glitzy, gimmicky or glamorous marketing communications.
Advertising from these brands, be it broadcast or cable TV commercials, big or small shows, programs and events, Internet focused, or special events. All have used three essential elements: their ads are rational, reasonable and responsible.
These are the new Three R’s of advertising marketing, the elements needed to resonate with consumers. If manufacturers and dealers are going to generate a response today, tomorrow and for the foreseeable future these elements must be used to motivate the consumer, to bring ‘em into the store. If not, it’s marketing malaise.