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How to Compete With Larger Dealerships in Your Area
Learn effective strategies to compete with larger dealerships in your area. Gain insights on marketing, customer service, and car sourcing options.
Competing with larger dealerships can be a significant challenge for small, independent dealerships, but it’s far from impossible. With their extensive inventory, aggressive marketing budgets, and established brand presence, it might seem like those big dealerships hold all the advantages.
However, smaller dealerships come with their own unique strengths. Advantages of small dealerships range from personalized customer service and local market knowledge, to the ability to adapt quickly to changing market conditions.
To thrive in a market dominated by larger players, a small dealership needs to come up with a plan to engage all its advantages.
Know your unique strengths and use them to your advantage
With the right strategies and a focus on their unique strengths, smaller dealerships can not only survive but thrive in today’s competitive market.
For independent dealerships, success often depends on the ability to capitalize on niche specialization, forge strong partnerships, and embrace innovation.
Whether it's through effective marketing for small dealerships or collaborative efforts that differentiate them from franchised competitors, the key is to use these strategies to attract customers and build a loyal customer base which keeps coming back for more.
By staying attuned to the local market and adjusting their strategies accordingly, small dealerships can position themselves as the go-to choice for personalized service and community-oriented business.
This gives them a competitive edge against larger, less agile dealerships. The idea is to do something that large structured organizations typically don’t give their salespeople or managers the leeway to do.
Stop underestimating the value of digital marketing
Having a strong online presence is essential for automotive businesses looking to reach customers and sell cars. Implementing diverse digital marketing strategies is one of the most effective ways to achieve this.
From search engine optimization to social media marketing, there are plenty of tactics available to increase sales and drive traffic to your business. Your website is your digital storefront and will be the cornerstone of your digital marketing efforts.
For example, you can use targeted LinkedIn advertising to reach fleet managers and business owners who are looking to expand their inventory, or you can use email marketing campaigns to nurture relationships with existing clients.
Another example is using Facebook ads targeted at business owners, fleet managers, or decision-makers in industries like transportation, construction, or logistics. It’s the easiest way to promote the inventory of fleet vehicles such as trucks, vans, or models for company use.
Seek valuable partnerships
By leveraging complementary business relationships, you can expand your reach, enhance service offerings, and increase sales.
On that note, there is no better business decision for a small dealership competing with franchised dealerships than connecting with a sourcing partner.
Forming strategic partnerships with sourcing partners can help a dealership acquire vehicles at competitive prices and meet the specific demands of their business buyers.
Partners for a wider selection of services
Collaboration with service providers such as vehicle customization shops, logistics companies, or financing firms allow dealerships to offer value-added services to their customers.
For B2B buyers in specific industries, vehicles often need customization (think van upfitting for delivery companies or safety enhancements for construction vehicles). By partnering with companies that offer these services, the dealership can offer a complete package.
This means that additional services can be bundled with vehicle purchases, enhancing the overall value proposition and providing a unique selling point. Also, forming alliances with corporate clients, such as taxi companies, can lead to profitable bulk sales or long-term leasing agreements.
Partners for better car sourcing options
Partnering with other dealerships, car rental companies, or fleet managers can provide access to a broader range of inventory. This enables the dealership to offer a more diverse selection of vehicles, catering to different needs and preferences without having to invest heavily in their own stock.
Having the skill of finding bargains and importing cars from one European country to another could be beneficial to a dealer of any size. Dealers should not only consider the price of the car, but all additional costs they will have to pay, such as logistics, registration fees, and different taxes.
Building strong relationships with these partners may lead to priority access to auctions, bulk deals, or private sales. If anything, it makes the acquiring process so much easier - and cheaper.
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Finding a reliable partner is not easy and will take time, but with the perfect match it’s possible to save on both time and finances.
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Be innovative in promoting your business
Smaller dealers typically spend their marketing and advertising budget on traditional spots such as billboards, radio, and television. These old tactics no longer have the audience reach to justify their expensive price tag.
Digital campaigns have a much larger impact for a cheaper price. Marketing for small dealerships should reflect local culture and interests. Sponsoring local events or collaborating with local businesses can enhance brand presence and build trust.
Additionally, tools like Google Analytics, social media monitoring, and CRM systems can provide data on customer behavior and preferences.
Small dealerships can use these insights to refine their marketing strategies, optimize online listings, and engage potential customers more effectively.
Be the dealership that customers trust
Smaller dealerships often provide a more tailored and attentive customer experience. They can build stronger relationships with customers by offering personalized service, remembering repeat clients, and adapting to individual needs more easily.
Lower overhead costs allow them to be more competitive in pricing and to allocate resources more effectively in key areas such as customer service.
Without the bureaucratic layers that larger organizations have, smaller dealerships can quickly adjust their inventory, strategies, and sales tactics in response to market trends, customer feedback, or economic changes.
Adapt to local market trends
Speaking of market trends, smaller dealerships are typically more in tune with their local communities. They understand the preferences, needs, and demographics of their market better and can cater their offerings accordingly.
They can focus on niche specialization or vehicle types, such as used cars, specialty vehicles, or particular brands, offering expertise and a tailored inventory that larger dealerships may not provide.
Being nimble means small dealerships can quickly react to new offers, pricing changes, or promotional strategies from nearby competitors.
If a large dealership launches a new financing offer, a small dealership can counter with value-added services like extended warranties or free maintenance.
Conclusion
Now is the time to start thinking about what your dealership can do to differentiate itself if you want to compete in the future. The large auto groups will only continue to grow larger, so make sure that you don’t find yourself getting smaller at the same time.
As technology continues to evolve, so do the new ways of reaching the customers. By incorporating these strategies into your marketing plan, you can effectively drive traffic to your website and boost sales for your automotive business.
Buying a car from a small dealer can be less intimidating, less frustrating, and often more rewarding due to the overall experience for both the buyer and the dealer. The key is to figure out which strategies work for YOUR business and audience. Adapt to the digital landscape, keep testing new ideas, and you’re on a great path to success!
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