Tuesday, July 28, 2009

Speaking to consumers who are keeping their cars longer

Below is a recent article from AutoPacific that discusses how Americans are keeping their cars longer than ever before. I don't think that this is a surprising fact to anyone, but how do businesses that touch the auto industry take advantage of it? Here are a few ideas:
  • Sell New Cars? - You better be talking about the long life and value!
  • Sell Pre-Owned Cars? - Discuss value for the money vs. new.
  • Do you do repair? - We extend the life of your car, no need for a car payment when we can get it back up and running for less than you would expect!
  • Sell Auto Parts? - You are golden these days! Why get a new car when you have the parts to get going again, discuss how relatively easy it is to do most of the work yourself. If you have the knowledge to give the customer advice - shout it from the mountaintops!

The consumer knows what is going on in with the economy and the auto industry these days, so speak to them about things they care about. Have fun & go make some money!


Americans Keeping Their Cars Longer
An annual survey of new vehicle buyers shows a significant increase in the number of people planning to hold on to their cars and trucks. In 2005, just over 46 percent of new car acquirers indicated they would not be shopping for a new vehicle for four years or more; in the just completed survey that number has risen to about 59 percent -- an increase of almost 13 percent. At the same time, the number of people intending to replace their vehicle within the next two years has fallen.

In April, automotive research firm AutoPacific conducted a national Internet survey which revealed that the general public was very hesitant to invest in a new vehicle; with 72 percent of those surveyed saying it would be more than a year before they would be in the market to buy a new car.

That finding supports other surveys which indicate that the public is wary about the current condition of the American automobile industry and the U.S. economy as a whole. It also confirms that not only are consumers wary, but those that did make the investment intend to hold on to their vehicles longer.

"Rapid replacers don't seem to be changing their pattern, but people who previously bought a new car every one or two years have significantly scaled back their purchasing, and those who before bought every three to four years are now waiting at least an additional year," said George Peterson, president of Tustin, California-based AutoPacific.

"We'll not be seeing the frequent replacement pattern brought about by strong incentives and financing programs that made it easy and financially reasonable over the last decade for consumers to get into a new car frequently. This may also tell us that consumers will be putting a higher priority on vehicles with a reputation for quality and durability that meets not only their short-term needs, but also their long-term expected needs."
(Source: AutoPacific, 07/14/09)

Friday, July 24, 2009

Do you have time suck?

Twitter? Facebook? YouTube? Blogs? Streaming? Video games?

Sure, we all need to keep up on digital, but not at the expense of getting our most important daily activities done. However, rarely will you or your team make much money letting the time bandit of Twitter or other internet temptations get in the way. Know what the top 3 important activities are for your business, then reinforce those activities regularly with your staff.

Wednesday, July 15, 2009

The Number One Factor

Customers rely on their emotional experiences with salespeople more than any of the traditional factors, according to research by the Peppers & Rogers Group.

The research showed that:
* 60 percent of all customers stop dealing with a company because of indifference on the part of salespeople.
* 70 percent of customers leave a company because of poor service, which is usually attributed to a salesperson.
* 80 percent of defecting customers describe themselves as "satisfied" or "very satisfied" just before they leave.
* Customers who feel their salespeople are exceptional are 10 to 15 times more likely to remain loyal.

Source: Don Peppers, founding partner of the Peppers & Rogers Group (from The Selling Advantage, 07/28/09)

Tuesday, July 7, 2009

What Happens If You Cut Media Spending?

Predictive Modeling by ThinkVine Indicates One Brand Would Never Close Sales Gap

In the short term, marketers can get away with cutting media spending without much real harm. But that term is as short as a quarter, and the harm, once it begins, can last long after the media switch gets turned back on.

Those are recent findings of ThinkVine, a Cincinnati analytics firm that does predictive media modeling for marketers such as PepsiCo, MillerCoors and Colgate-Palmolive Co. ThinkVine CEO Damon Ragusa said lately he's been getting a lot of inquiries about the potential impact of going dark altogether for a quarter or more.

An analysis the firm did for one unnamed brand looked at the impact of turning off media entirely for a year, then turning it back on the next year at prior levels. For about 16 weeks, sales volume was about the same. By the end of year one, however, sales volume was about 20 percent lower without media than with it.

Turning media back on in year two reversed the sales decline as the brand began growing again at the same rate it would have otherwise. But it never closed the gap in sales results compared with what it would have achieved had it maintained media spending both years.

Different brands respond differently to media cuts, Mr. Ragusa said, and some brands with dominant positions or in less advertising-responsive categories may get away with cutting budgets unscathed. But for many, possibly most, getting back sales and share lost from cutting budgets can be a lengthy and expensive process.

"There is a downside risk," he said. "The cost of getting back what you lose is often greater than the savings."

A brand that is on a downward trajectory anyway because of the economy is much more at risk from a temporary withdrawal of media support than one with flat or rising sales growth, he added.

ThinkVine uses correlation and regression analysis and sales data. But it bases its predictions on the makeup of each brand's consumers, including detailed data on the media and spending habits of various consumer segments. It then crunches as many as a trillion data points for each forecast.

The results aren't perfect but tend to come within 2.4 percent of the real-world sales data in ThinkVine's validation work, Mr. Ragusa said.
(Source: Advertising Age, 06/29/09)