Ayers Advertising

Continuing from our previous post.  Here’s the complete text, reproduced in its entirety without changes. Remember, this article was published in February, 1990 . . . .

Car Dealers Die

I suppose we could have entitled this article with many other headline capturing epitaphs that would get your attention like: Car Dealers Drown; Sales Go Down The Drain For 1990; Down Market; Uncertainties; Just Go Hang Yourself. Well, it would be very easy to have titled this article many different ways, but all we’ll do is give you 10 things that you can do about a declining marketplace. Not all markets in this country are on the decline. There are some that are on the upswing, especially those whose sales had declined in recent years.

In recent newsletters we’ve addressed why we’re in the decline we’re in. If we go back less than a decade, we found ourselves at 21, 22 percent interest rates. We don’t have those today. We were waiting in gas lines because of an Arab oil embargo; we don’t have that today. Unemployment in double digits doesn’t exist. We found our country, as former President Carter said, “in a malaise with Americans who don’t care”. We don’t have that today.

Americans do care. We now find ourselves in a period of the greatest world peace that we have seen in our lifetime. We don’t have the uncertainties of cold war and what’s going to happen in certain places around the globe and upping our defense spending. We could go on and on about the differences between now and ten years ago but the fact of the matter is things are very different and for the most part, positively so.

One of the biggest reasons people are not buying right at the moment is the long term financing that we got them into three, four, five years ago that has caused the

average American to be in their car at 33 months and still be $2500 or more “upside down”. That’s almost criminal. As they approach the fourth year of paying off their car, they’re just starting to break even. As we talked about in one of our more recent newsletters, we do have to put an end to that. It’s ludicrous! Two or three year “no maintenance” leases are one answer to our current problems.

There are many other ways to go for mid-term benefits but the subject of this article is to try to give you some points on how to make it through 1990. The following 10 points will help:

1.    Cut through local advertising clutter creatively.

2.   Better inventory and management.

3.   Keep gimmicks to an absolute minimum.

4.   Have you talked to your favorite niche today?

5.   Study your past successes. Repeat when right.

6.   Make sure every department is running to maximum efficiency, especially your fixed end and used car departments.

7.   How’s your competition really doing? Understand them and their problems.

8.   Don’t be afraid to go with something new and really different.

9.   Leveraged? You’ve got a real problem.

10. Don’t panic. Get tougher and smarter.

Okay, there you have it. Ten ideas from an advertising and marketing point of view.

Let’s discuss all ten.

Number 1: Cutting through clutter. Advertising has always been important. But now there’s more competition so you’ve got to stand out in your message. In a recent article in Automotive News, we heard where as many as 200 automotive messages are being run in the New York market in one 24 hour period. That’s a lot of stuff! So whatever you do, make darn sure it stands out.

Number 2: Inventory. We’ve talked about it so many times and right now with the expense of having a large inventory because of sales, it really is cutting into the bottom line of many dealerships.

The good news is, of course, prime rate in recent weeks has dropped and that’s a healthy sign, but it will be temporary. We’ve got to make darn sure that our inventories are in our best position to sell the right things at the right time. In recent 20’s Groups, we’ve asked dealers to send us their inventories and some balked, saying: “We have a good system. We don’t need to look at our inventory, it’s just fine the way it is.” That’s not the point. When you look at an inventory, especially through one of AllStar’s Instant Inventory Analysis systems, you’ll find a couple of things. A: where the dollar level lies in that inventory and B:

what you can or can’t say in your messages. Those 2 elements alone could make all the difference in how well your messages work.

Number 3: When we talk about gimmicks and we say they are a joke on the long term basis, they are! One thing some dealers don’t understand right now is that with gimmicks, you will always tend to end up in the final analysis with more legislation against automotive advertising than you would have seen otherwise. And then they say why is that? Well, it’s because people don’t understand. So, we get ourselves legislated into morality. Gimicks will lead to more restrictions and more laws regulating automotive advertising. Gimmicks are short term fixes that many people get involved with because they’ve got to pull a rabbit out of a hat. Especially, and this is really geared to you who are owners, gimmicks are dredged up by sales managers who are put under pressure to make sure that they have “x” amount of sales; they need to take care of a dealer who is leveraged so strongly that they have to get those things accomplished to enable them to get the bottom line they need to pay the bills they have. More gimmicks happen because of that then any other reason I can think of.

There are so many people in our business who are good people, honest people who get forced into gimmickry and trickery because of sales pressure put upon them. We really have to watch that one because on the long term, it will back-fire on us. We will be made to look like “the bad guy” because a few people will have their hands slapped or get into greater trouble and that’s a negative for both of our professions – automotive and advertising.

Number 4: Nave you talked to your favorite niche today? This subject is probably more important now than ever before In finding new customers to promote to and do it on a continuing basis. Whether it’s high line vehicles, marketing to women, minorities; truck people, families, etc.; there are a lot of different niches that we can attract on a regular basis.

Number 5: Study past successes. Whenever we forget what our history is, we forget essentially who we are. Our history will tell us a lot about ourselves and things that we have done well; all deserve a real fair and honest shot at trying in the future. It doesn’t mean you take your entire program and pin It on one thing because In 1986 you were highly successful at that. Times are different today.

What we are talking about are specifics. If you had a specific sale in 1986 that was very strong for you at a certain period during the year, can you do that and can you do it successfully again this year? Well, that’s the experimentation of the thing. You might want to try it. If you don’t, you’ll never know. But it doesn’t mean that you can take the game plan that you had from 1986 and spread it out in 1990 and expect the same things will happen that happened then. They won’t. I will guarantee you that. But some of them could be successful. Take some of them, the ones that you really believe in, the ones that were really a strong success for you and rerun those and do them very much the same way you did them during the successful years.

Number 6: Efficiency is important in everything we do, but especially advertising. It has to work cost efficiently. Fixed end and used car advertising is best done with continuity and continuous ad programs designed to work on a daily or at the very least, on a weekly basis.

Number 7: How’s your competition really doing? Well, that’s a real good one because in some markets where things are tough we’ve heard, “well, so-and-so had the biggest sale in the history of their store.” Maybe they did and maybe they didn’t. The bottom line is, what does it take to make your

store work? Not what is so-and-so doing. Are you getting your fair market penetration? If you are not, then you truly need to do something different than you’re doing.

When you do decide that you’ve got to copy and do monkey-see, monkey~do advertising, fine. Understand the circumstances in which they did it and then go attack.

But keeping up with the Jones isn’t necessarily the smartest and best thing that you can do during tough times.

Number 8: Don’t be afraid to go with something new and really different. This one Is a little bit scary because it means scrapping old things you know. The first thing in a tough market we really need to do is: look into a mirror. Make sure that all the equipment is working. Once we decide it Is and when we feel like we really have a plan, then we’ve got to decide. “Hey, maybe I should really try something a little bit different. Maybe I should try something new.” then just go do it!

But don’t be like some people will be . . . you get a new program and “well, I’ll try It for this weekend and if it doesn’t work, I’ll just completely scrap it.” That’s not smart planning. When you try something, give It a fair shot. What’s a fair shot? It might be one month, it might be six months. It depends on the overall nature of the campaign that you’re trying to do. Some will last longer than others. Don’t start jumping around so rapidly that you can’t even keep up with your own changes.

Number 9: Are you over leveraged? Well, then you’ve got a real problem. That’s a statement that’s kind of like “buy low and sell high.” Well, unfortunately, that’s where a lot of people are these days with the stores that have been bought because there are certain expenses that they have that the previous owner did not. That’s a difficult position to be in.

If you are in one of those positions, take a look at all the things you truly need to make the store work. Make sure you’ve got the right things plugged In.

Number 10: Don’t panic. Qet tougher and smarter. When we say don’t panic, we truly mean it. The dealer who will try and go out each week and re-invent the wheel Is in a panic situation. They’re the ones who are going to end up trying to do

all the gimmicks to get their advertising back on the track. Because after all, everybody knows that advertising is the only answer, it’s the only salvation, it’s the only thing that will make a dealership work. People, product and all of those things don’t count cause if you advertise enough you’ll be able to get the job done. Well, that’s a bunch of bull!

Getting tough, and making tough decisions and being smarter will make more sense than anything else. For those who panic, they’re going to get into the gimmicks and end up exactly where they belong . . . in one big, fat pickle!

An advertising agency, like ourselves, can’t come along and perform miracles. We can’t take a bad used car manager and make that person a good used car manager. That isn’t the function of advertising. It doesn’t work. You can run the greatest sale in the history of mankind and it won’t make your staff do all the things you need your staff to do.  It can help them on a very short term basis. But that’s it.