|Did you know that just under half of the consumers in America have been reported as “late” on loan payments? According to a survey on credit activity across the United States conducted by Fair Isaac, statistics reflect that blemishes on credit reports of Americans represent a large percentage of consumers. Another astounding fact, according to the U.S. Courts Web site, is that bankruptcy filings rose to 1,794,795 in 2006, compared to the 1,590,975 cases filed in 2005.|
So, what’s to blame for all of these financial failings? It’s not what, but who. It’s not interest rates or inflation, but people’s general lack of good judgment and caution when spending. How’s this going to affect your dealership? It can affect your dealership positively, if management is prepared to assist this growing number of Special Finance consumers.
Be Part of the Solution
With the vast majority of today’s car buyers turning to the Internet to begin their buying process, it only stands to reason that this Special Finance market holds enormous potential for dealerships to increase sales and profits through targeted digital marketing to this demographic. The evolution of e-commerce has provided a unique opportunity for dealerships of all sizes to move beyond their traditional restraints and limitations into the realm of digital financing. The value of convenience and saving time has become a greater priority to car buyers and the phenomenal growth of the Internet has begun to change the way dealers and consumers exchange information—not only in the area of sales, but in the search for credit as well. Today’s consumers are compelled by the speed, convenience and the variety of choices available through the Web. They are tossing their newspapers and phone books to be able to conduct business and obtain financing from the privacy of their homes.
According to statistics in a study conducted by CNW Research, the Special Finance market accounts for one-third of the overall finance market. This means one out of three buyers coming into your dealership will have difficulty securing a traditional car loan due to a bad credit score and/or bankruptcy. Surprisingly, only a small portion of dealerships actually specialize in catering to the credit challenged buyers. With the rising numbers of financial struggles among this computer-centric generation, it makes great economic sense for dealers to devise digital marketing strategies to pursue the potential that exists within this market. Today’s tech-generation dealers can now focus on the Internet as a virtual showroom, but that’s only the beginning. Through digital marketing, dealers are breaking through the physical barriers traditionally placed on communication and relationships with consumers, not only in regard to sales, but in another very lucrative profit center—F&I.
Dick Hannah of Oregon is also harnessing the Web’s power to generate results. “We direct every customer who is interested in a vehicle to complete a secured online credit application,” explains Babak Mohammadi of Dick Hannah. “We also have a Special Finance department that sells over 150 cars a month, so we have a specific Web site for all of our sub-prime customers (DickSaysYes.com). Most of our sub-prime leads come from the Web, and it has been a critical part of our business,” added Mohammadi.
Successful dealers are capturing the “iffy” credit buyers through targeted bulk mailings and customized, keyword-specific search engine marketing (SEM) campaigns. Tracy Myers, owner of Frank Myers Auto Maxx prefers to take matters into his own hands with regard to generating leads from the Special Finance market. “We actually created our own lead provider,” stated Myers. His dealership implemented and markets a microsite to attract and capture leads for financing. With a powerful and innovative CRM tool, dealerships can manage Internet or other prospective leads, communicate through real-time e-mail responses, collect and work a prospect’s credit application, and process the application electronically.
When planning a digital marketing strategy for capturing the special finance market, the following are key “must be’s” for attracting automotive consumers who are opting to secure their financing electronically:
Both credit-challenged individuals and those with good credit have found that securing financing online is a great way to get the money they need quickly and conveniently. Successful and innovative dealers are not only willing to work with them to secure financing and get them into a new or used vehicle, but are actively and aggressively seeking out this demographic of eager consumers.
Vol 4, Issue 5
Dealers who invest in AI- and ML-powered digital marketing solutions today will reap the rewards of active-shopper targeting and engagement when the market constricts.