Why Does Your Dealership Need a Market Analysis?
Choosing to commit to a dealership market analysis is comparable to the red or blue pill dilemma from The Matrix. The choice is between the willingness to learn a potentially unsettling truth by taking the red pill, or remaining in contented ignorance with the blue pill.
Many dealers opt to take the blue pill approach. Whether it’s because they don’t feel they have the resources to improve their current efforts or they feel like their marketing is already “good enough”, they choose to remain in blissful darkness.
Those who chose the red pill are often confronted with a rather harsh reality of their market and their performance, BUT they are then able to use that knowledge to reimagine their marketing strategies. Having all available information about their market makes it possible to create messages and advertising in a thoughtful and calculated way.
They know their audience. They know their competition. And they know what works.
Without further ado, here is an overview of Naked Lime’s Market Analysis.
Know your Audience
As local businesses, it’s easy to slip into the notion that your audience is simply the people who live in your surrounding area. But every neighborhood and the people in it are unique.
By looking at the kind of people who live in each zip code, you can better evaluate who to target and what interests them.
Our system identifies the top consumer profiles in each zip code. These profiles are groups of people with things in common, like age, family situations, population density, housing, and most importantly, vehicle registrations and transactions. Not only does this give dealerships a glimpse into the lives of their prospective buyers, it determines what they are most likely to buy.
Here some of the things that they look at:
- Does this area buy more domestic or import?
- How likely are they to purchase an SUV or truck?
- How many vehicles can you expect them to have per household?
- Do they tend to come back for maintenance?
- Are they likely to purchase or lease?
Let’s take a look at a few examples. These are both from very similar geographic locations, yet they are fit into separate profiles. Notice the differences in preferences. Would you market to these groups the same?
Know your Competition
You might think you know who your biggest competition is, but do you really know how you compare and where they are stealing business from you? We can show you just that.
Going through every zip code in your area, you’ll see the number of registrations for your dealership compared to your competitors. Where are you dominating, where are they dominating, and what areas are up for grabs?
Areas of opportunity
Using the information we gain from looking at registration ratio, we can find new areas of opportunity for your dealership. These zip codes are where people are obviously buying vehicles, but might need some more incentive to go to your dealership specifically. Shoppers are willing to drive farther if they believe they can get a better deal, so win them over with messaging about your special offers or give them an incentive to come and test drive a vehicle.
Did you know that 88% of searches for local businesses on a mobile device either call or visit the business within 24 hours? 1 While vehicle sales data looks at consumers that have already bought a vehicle, online search data looks at consumers who are going to buy a vehicle. By identifying these low-funnel buyers and layering in the other pieces of data, you can get the right vehicle in front of the right person and do it at exactly the right time.
Refine monthly strategy
Evaluating your current advertising and budget strategy can show you the areas you are winning and the areas that need improvement. Marketing and advertising performance metrics can be used to analyze the success of your current efforts. If you have been targeting a specific zip code and there haven’t been any sales coming from there, it might be worth reallocating that budget towards somewhere that would more likely to produce revenue. This saves your dealership time and money.
Want to learn even more about analyzing your data for your dealership’s marketing? Watch our video.