Here at the Traffic Institute, we talk to a lot of dealers. And lately, we’ve been hearing more and more about inventory shortages. With good cars becoming harder to find and more expensive, a lot of dealers are struggling to keep their lots stocked.
This is basic supply and demand—a scarcity of good cars means more dealers are fighting for a smaller supply of goods. This drives the price for each car sky high at the auction, which is great news for the auctions, but dealers like you are feeling the pain.
And let’s not forget the money you’ll sink into the car to get it ready to sell. It seems like your costs are never-ending.
A situation that’s only made worse when customers nickel and dime your salespeople for a lower price, further cutting into what little profit remains on the deal.
These inventory problems are sucking dealerships dry around the country, but it doesn’t have to be this way for you.
There’s a better way.
While most dealers are fighting for cars they think every customer wants, we know that not every customer wants those cars.
Sure, the customers you’re helping right now might want those cars—but those customers are part of a small group we call the active shoppers.
An active shopper wakes up knowing they need to buy a car. Not only do they know they need a car, but they know exactly what they want and how much they’re willing to pay. They’ve also already done hours of research and aren’t willing to compromise.
With active shoppers, if you don’t have the exact vehicle they want, they’ll move on. After all, dealerships are a dime a dozen to active shoppers. For them, it’s all about chasing the car they want for the price they want.
But active shoppers aren’t the only customers in your market—they’re just the only people shopping for a new vehicle at the moment.
Luckily, active shoppers only make up about 2% of the population at any given time. But the other 98% of people are dreaming of driving a nicer car.
You see, the miracle of the car business is that everyone wants to drive a nicer car than the one they have right now.
How do we know this?
Because cars are a status of wealth, family and happiness all rolled into a mode of transportation. This fact alone makes most vehicle purchases emotion-driven.
It also means people are conscious of the car they drive and the impression it makes. If given the opportunity to drive a nicer car for a similar monthly payment, they would. Because it’s human nature to want something better—especially with something as symbolic and important as a car.
That means this 98% of the population who isn’t actively shopping would buy a car if they thought they could.
The best part about this 98% is that they aren’t vehicle sensitive. These customers will be happy to drive any car that is nicer or that fits their situation better than their current car. That means when you go to auction, you can stop fighting for the vehicles other dealers are strong-arming each other for.
Plus, by marketing specifically to the 98%, you’ll be attracting a group of customers that most dealerships are ignoring. Meaning you’ll not only sell cars other dealers are ignoring, but you’ll also sell to a whole market of people other dealers are ignoring too.
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