Putting all misconceptions and promises of ‘magic solutions’ behind us, let’s look at the logical way a dealership can increase market share in a sustainable fashion.
I have talked about the two major factors involved in previous blogs: Opportunities and Capacity. Opportunities are simply touching in some way those who have potential to buy. Capacity is a combination of Inventory and quality/quantity of sales and other staff.
One way you cannot systematically build market share is to rely on events and giving things away. This method may create excitement and make everyone feel like something is happening, but over a period of time, nothing has actually been accomplished when measured against growth of market share and maintaining it.
To systematically create opportunities to people in your market when they are actually considering purchasing a vehicle is the trick. This requires two things; getting your message out to the right people and doing it consistently. You don’t grow sustainable market share increases by taking ‘stabs’ at the market because each ‘stab’ will more than likely be followed by a set back of some sort. You could spend a fortune on ‘broadcasting’ to make sure you are always being heard or seen by the right ears and eyes, but that requires that you commit to very large advertising budgets which will seriously destroy some of your profit margin. The direct marketing approach is where my concentrations have been over the past several years. I work with behavioral data that reaches out beyond data base mining to the extent that our results average over 80% conquest (sales to people with no prior sales history at that dealership). It’s not for everyone in every market, but when we find the fit, it has proven to increase market share systematically over just the first 4 – 5 months…and continuing on beyond that for our clients that stick with this method.