Welcome to the inaugural post of “Randy Thinks,” a thought-provoking series brought to you by Leadbox, your trusted marketing agency specializing in Automotive Dealerships.
In the first edition of Randy Thinks, we sat down with Randy, our Head of Sales here at Leadbox and asked him to reflect on his first year at Leadbox and share some of his thoughts for 2024. Here is what came from it.
Q: You joined Leadbox a year ago now. What have you noticed that sets Leadbox apart from other Digital Agencies you’ve worked with?
A: I was fortunate to know a fair bit about Leadbox before joining. I knew the mission to be the Best Digital Agency in Canada, and I was familiar with the “customers first” approach but it took me joining the team to get a feel for the passion and drive of the team here at Leadbox. I’ve been particularly impressed by the passion for operational excellence and desire for long-term solutions of the Ops and Engineering teams at Leadbox. The GAFF (Give a F**k Factor) of the entire team constantly surprises me and fills me with a sense of pride to be part of it all. Instead of “that’s not my problem,” the Leadbox team approaches things from a “what issues are you facing that I can help with” mentality that you need to experience to believe.
Q: What are your thoughts on the auto industry right now?
A: These are unprecedented times in the Industry. I’ve spent my life in the different facets of this industry, including retail variable and fixed operations, along with years in vendor services covering the gambit of products from Service Retention, Equity Mining, Digital Retail plus full-service Digital Marketing, and I have never seen a time of more volatility and uncertainty in the industry. Dealers have been inundated by what would typically be called once-in-a-lifetime events time after time over the last 4 years. From Covid creating its particular brand of havoc comes a chip shortage that leads to one of the biggest inventory crises to rock multiple generations of operators. As a particularly tart cherry on the top, interest rates have skyrocketed, tamping consumer demand and leading to sky-high flooring costs. Just one of these in a decade is more than enough to reshape the industry. The fact that there have been 4 in 4 years, and dealers are still holding their heads high is astonishing and incredible.
Q: Are some stores fairing better than others?
A: Absolutely. As with all inflection points in the industry, some dealers fare better than others because of location, brand, financial stability or operational excellence. However, it is fair to say that every dealer has experienced some sort of challenge or frustration over the last few years.
Q: Are there any trends you see unfolding?
A: I don’t know about “unfolding” since we’ve been dealing with these for what feels like forever, but I would say inventory. One way or another, it’s a problem. Some dealers still can’t get enough vehicles, while others have cars that are experiencing birthdays.
According to JD Power, the average days to turn over last year have been increasing steadily, with North American averages for used sitting over 40 days and New and 30+. Our data here at Leadbox shows that across hundreds of dealers and thousands of vehicles in Canada, more than 49.5% are 60 days or older, all while profit levels are coming back to more familiar territory after a few years of record PVRs
Another trend is the challenges around the push to Electrification. Every market, dealer, and brand has its own unique challenges and targets around electrification. One thing that remains clear, though, is that EVs are here to stay, and regardless of your opinion, as a dealer, it’s critical to have a plan.
Q: Wow, that sounds pretty challenging! Are there positives too?
A: Well, it’s not all bad news, thankfully. Automotive is a resilient industry with the ability, the talent, and the desire to rebuild and reshape itself for whatever is thrown at us. It’s kind of a “Phoenix from the Ashes,” and many positives have come out of the last few years. If I were to pick a favourite, it would probably be all the cool solutions and tech that were born out of necessity over the pandemic that have stuck around and are helping dealers and consumers alike in the car buying journey.
Q: What do you think dealers should focus on going into 2024?
A: I think 2024 may be another inflection point for dealers as the dust settles and “the new normal” sets in. Regardless of what happens in 2024, I still believe success can be found by setting goals, revisiting them often and focusing on the 3 pillars that I will touch on a bit here and dive deeper into in future episodes of Randy Thinks.
1. Consumer Experience – Make sure that the consumer experience you deliver is the type of experience you would expect if you were the consumer. Whether in-store or online, we need to focus on delivering the best we can for each consumer. Some of the keys to consumer experience, in my opinion, are:
2. Do more with Less – Spend better and automate what you can. Not everything you do requires a vendor, but some things do. As we move into the new year, look at the vendors you work with. Is there something you’re paying for out of convenience that you could handle better internally? Can AI help you with mundane tasks like writing vehicle descriptions so you can focus on more important things like great photos and lead nurturing?
3. Advertising – I’ve always thought that one of the best quotes from Henry Ford was, “Stopping advertising to save money is like stopping your watch to save time.” Over the last few years, we haven’t needed to advertise as much since the scarcity of vehicles created a demand that was often difficult to keep up with. However, times are normalizing and just having the vehicle isn’t enough anymore. It’s time to get back to driving demand and excitement around your vehicles and dealership. Make sure the advertising that you do is tangible and trackable. The best way to save money on advertising is to know what is and isn’t working and to be agile enough to make changes on the fly. I’m also a firm believer that as a vehicle retailer, it’s best to work with ad agencies that focus on the business that you are in. We’ve all talked about the fact that the car business is unique. I think it’s key to work with an agency that understands the industry and its challenges as well as you do.
Q: Do you have any final thoughts?
A: Yes. I would encourage dealers to ask for help. Whether from your vendors, your OEM, or within your 20 groups, all of us have experienced the last 4 years in unique ways, and as such, we’ve all found unique ways of dealing with the challenges that have come up. You might be surprised to find out that a particularly challenging item you are currently dealing with already has a tried and true solution out there in the market.
CategoriesIndustry Thoughts, Industry Trends
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