Due to the recent tragedy in Japan, some Japanese import dealers are being affected by up to a 50% decrease in new car inventory. As a result, many U.S. import auto dealers have cut back their marketing and advertising efforts and budgets.
However, one dealer has a preemptive game-changing strategy that’s putting them on the offensive. Brian Benstock, of Paragon Honda the #1 New and Certified Pre-owned Honda Dealer, is definitely playing offense. “The best time to play offense is when the competitors are playing defense or literally walking off the field,” said Benstock. “Our goal is to put touchdowns on the board while our competitors are trying to figure out their game plan.”
“We actually found ourselves in a similar situation prior to Cash-for-Clunkers when there was a surplus of inventory. We kept buying inventory and stocking up while other dealers were cutting back. When the government announced its incentive program we were well-positioned with plenty of inventory while other dealers were scrambling,” Benstock explained.
“Right now customers don’t realize there’s an inventory shortage, so they’re still in the market to buy and service. We wanted to be sure we have a plan in place across all our
departments to keep things moving ‘business as usual’. If new car sales take a short-term dip due to inventory shortage, we’re ready,” said Benstock.
Paragon has a multi-pronged approach that begins with continuing to take New car orders with deposits, much like the high-line manufacturers do today. Customers are often willing to put money down to wait for the exact vehicle they want. Taking orders will have a great watershed effect in the upcoming 60 to 90 days.
Next, Paragon will continue its focus on Certified Pre-owned vehicles and offer their quality cars to New car buyers. Once buyers are in the showroom they will be presented with viable options on Certified Pre-owned Hondas with full factory warranty for less money than a new vehicle.
Paragon will continue to build its quality CPO inventory using a highly effective targeted direct mail and email campaigns like the BuyBack Program. “We’re targeting our equity customers and same brand in-market prospects with a custom message that lets them know their quality pre-owned Honda has never been more in-demand due to the shortage of Japanese production as a result of the terrible tragedy in Japan earlier this year and we’ll pay them top-dollar for their trade,” said Benstock.
Paragon is also making sure to feature super competitive service offers on all their marketing and advertising to incent customers to use their service department which subsequently increases Fixed Ops revenue. This is always important, but particularly when New car sales are down.
Offering Loan Modification Programs to current customers with the opportunity to refinance their current loans for a lower interest rate and focusing on Extended Service Contracts to customers that want to keep their current vehicle all help to increase Finance Department revenue.
“Paragon is right on the money,” said David Boice of www.TeamVelocityMarketing.com, the targeted marketing company that Paragon uses. “Benstock is a tactical dealer who always works to positively affect all of his profit centers. His strategy to keep orders coming is smart, despite whatever inventory lull may be ahead – it’s only temporary,” added Boice.
Consumers are still purchasing new and pre-owned and servicing their current vehicles. There are numerous ways for dealerships to stay in the game and play offense, rather than defense, when the market takes unexpected twists and turns. While many dealerships have reduced their marketing efforts and budgets, dealerships like Paragon strive to stay ahead of the competition. “Sitting on the sidelines in fear is not a comfortable place for me. I prefer being in the field playing offense, while my competitors are in the locker room developing a strategy and by the time they figure it out we’re scoring touchdowns”, said Benstock.