The car business has become a tale of three eras. The old era hit its peak in the 1980s when all of the chips were stacked in the favor of car dealers. They had the information, they were well-practiced, and it was common to make a solid profit on vehicles.
The second era lasted until very recently when the tables turned and consumers had the upper hand. The old model was broken because it became possible for consumers to easily get invoice pricing, know the approximate value of their trade, and come in knowing what interest rates and terms to expect in their purchase.
Today, the third era is starting that bridges the gap and will (hopefully) turn the experience from confrontational to positive across the board. This is the era of mutual data benefit. Today, smart dealers are able to gather the data that allows them to make incredible advertising and marketing decisions while consumers are embracing this hyper-targeting model to allow them to be connected to the right dealers selling the right vehicles.
It’s far from universal. In fact, there are companies who continue to perpetuate the confrontational model by encouraging consumers to fight rather than to work through the buying process intellectually. Those companies will be covered in a future article. The important part is to note that the transactions are becoming much easier thanks in part to savvy consumers using technology to make it simple rather than to make it painful.
The other part of the equation is the dealer body. Many are embracing the type of analytics and advertising practices promoted by companies like String Automotive to bring their profit margins up to the levels they need to be. It’s no longer just about squeezing an extra $100 out of a vehicle. Today, the real battleground is in intelligently taking advantage of marketing and advertising investments through data analysis.
In essence, today’s smart buyers are allowing themselves to be found and today’s smart dealers are looking for them in the right places. It means that consumers go through less hassle and dealers spend less money getting their message in front of them. The data is melding the two conflicting aspects of a transaction by aligning the goals between the parties.
Technology and the car business have been reluctant bedfellows in the past, but thanks to proper data analysis and advertising positioning, the gaps are being bridged very nicely.
Here’s a video from String that explains how this happened from a dealer’s perspective.