In the dynamic world of automotive retail sales, trends can shift rapidly. Lately, the prime market has seen a decline in demand, influenced largely by escalating interest rates. MarketWatch is reporting the average rate to be 9% as of October 2023. However, while some dealerships feel the pinch, others, like Carlson Chevrolet, have found solace in a buoyant subprime market. We are on track to have back to back record months!
The Subprime Advantage
While many dealerships had placed their bets on the prime market over the past few years, the rising interest rates have presented challenges. In contrast, the subprime market remains resilient. This segment of the customer base, often overlooked during the prime market boom, now presents a golden opportunity. Subprime customers have always paid higher interest rates so they are not as affected as prime customers by the higher rates.
Carlson Chevrolet, due to its extremely rural location, inventory constraints and subprime background of ownership, had always maintained a keen focus on the subprime market. This foresight is now paying dividends as we're on track to have a record month, even as others grapple with the prime market's ebb.
Leveraging Social Media Platforms for Subprime Success
The key to Carlson Chevrolet's success in the subprime market lies in their adept use of digital platforms, notably Facebook and Instagram. These platforms serve as a rich hunting ground for subprime customers. TECOBI's integration with 700 credit enables dealerships like Carlson Chevrolet to seamlessly soft-pull credit on incoming leads. This functionality streamlines the process, making it more efficient to manage and convert subprime leads sourced from these social platforms. You are able to quickly sort through the leads and find the buyers.
The 'Instant Credit Pre-Approval' ad, for instance, showcased above, is a testament to this strategy's potency. It not only attracts potential buyers but also reinforces the dealership's commitment to offering flexible financial solutions.
Dissecting the Numbers
From a mere ad spend of $2,000, Carlson Chevrolet generated a staggering $20,697 in gross profit. The advertisement's performance metrics further solidify its success:
- Leads: 611 leads at a cost of just $3 per lead.
- Appointments: 71 appointments set, translating to a cost of $28 per appointment.
- Show-ups: 24 individuals showed up post-appointment, incurring an $83 cost per show.
- Sales: The final and most crucial metric - 8 vehicles were sold, with an impressive cost per sale of only $250.
What stands out here is not just the raw numbers but the overall ROI and Cost Per Car Sold. Achieving a 10x return on investment is no minor feat, especially in an environment with fluctuating demand trends.
Handling the Volume with Efficacy
With such a substantial lead influx, a robust system is essential to manage and nurture these leads effectively. Leveraging TECOBI's advanced SMS communication tools, dealerships like Carlson Chevrolet can efficiently handle high lead volumes. The platform's seamless integration with credit checking tools ensures timely and informed communication with subprime leads, facilitating higher conversion rates.
Carlson Chevrolet's recent subprime campaigns showcases the immense potential of targeted digital advertising, especially when combined with dynamic inventory showcasing. The numbers tell a story of exemplary strategy execution, translating into tangible sales and ROI. It serves as an inspiring blueprint for auto dealerships aiming to tap into the subprime market with digital finesse.