Both new and used car sales surged during the Covid spell, as did the sale of Motorbikes, Tractors and Trucks. The Australian caravan scene also exploded as families swapped international jet-setting for local road trips, making caravans their companions.
But the rising cost of living and increased interest rates are now steering the market towards a drop, with stock listings booming but actual buyers leaving the market or spending longer in research mode.
30% Drop in Active Buyers
At the Caravan Industry Conference earlier this year, Peter Clay from The Caravan Industry Association of Australia predicted Australian caravan production would drop roughly 30% from 28k to 21k units.
We have already seen that drop in Google searches. For most of last year, the term “Caravan for sale” averaged 165k monthly searches on Google. Today, it averages 110k. That is a massive 30% drop in active buyers in the market.
It is not just the caravan market where buyers are leaving the market. In the motorcycle market, searches for “Bikes for sale” are down 25%, while the car market has faired better, with searches for “cars for sale” only down 12%.**
Stock on Classified Sites is at an All-Time High
In addition, stock is building up in the yards, while stock on classified sites is, in some cases, at all-time highs. For example, cars listed for sale on Car Sales was 172k last October. Today, there are 229k cars online – a 33% increase.
And it’s not just cars, in the leisure industries, last October, the number of vans listed for sale on Caravan Camping Sales was sitting at 9k – today, there are over 13k vans for sale, an almost 40% jump. Bikesales has seen a similar jump (from 14k to 20k) as has marine ( from 12k to over 15k boats)
On the industry side, Trucks, Farm and Construction equipment listed for sale on Machines4u has grown 23% from 16k to 20k.*
The Cost of Holding Stock
In 2013, Deloitte released some research on the cost of holding stock (you can read it here), which estimated the cost of approximately $27 per vehicle per day. In 2013, the average used car cost around $10k, according to CarHistory.
The average used car today is around $30k, according to Carsguide. Adjusting for the average cost of the average used car today and inflation, the cost of holding stock is more likely $100 per day.
Holding costs can start adding up quickly: holding a car for just ten days could cost a dealer $1,000, rapidly eating into profit margins.
Buyers are Spending Longer Researching
In addition to the stock flooding the market as buyers exit, we have also seen conversion rates dropping as the cost-per-acquisition (CPA) increases. Across multiple industry on both dealer and OEM sites, we see the time spent on-site and the number of pages visited per session increase. This signals that the buyers still in-market are switching to research mode rather than action mode and are spending more time researching models and considering their purchase before pulling the trigger.
Taken as a whole, the market is tightening up with fewer buyers active. Dealers must learn to sell again and work harder to get leads and sales.
Capturing Active Buyers
With a shrinking market comes increased competition, which we have seen across advertising networks. The recent end of the financial year saw more ads than ever across the Google and Facebook networks, with advertisers becoming increasingly aggressive in their approaches: discounts are back, and messaging is direct to create urgency amongst buyers.
So how do you get new customers in a shrinking market? And how do you move stock fast to minimise the holding costs?
Website Maintenance
The website is the cornerstone of all digital marketing strategies. All marketing points back to it. When other marketing channels are turned off, it remains live. A robust website amplifies the results of all other media.
The website is often viewed as a once-off investment of time and money. The website is the online showroom; just like the physical showroom, it needs ongoing maintenance and attention.
When times are more challenging, and deals are tougher to come by, the website must be performing and converting visitors to leads at its full potential.
Prioritise Mobile-First Design
57% of traffic in Australia comes via a mobile device.
Dealers tend to be phone call-based businesses. Make sure your website is mobile and phone call friendly. Some quick website checks include:
– Make sure ALL numbers on the website are click-to-call.
– Make sure the numbers are fully visible at all times; often, the numbers are hidden in the menu on the mobile view.
– View the order of items on your site vs how users consume content, e.g. buyers tend to be visual and will look at photos first. On the mobile view, ensure the key call to action is below the photos to capture leads or phone calls when interest is highest.
– Add call-to-action buttons floating in the “sweet spot” on the mobile view. Toyota dealers do this well, with the three call-to-action buttons floating at the bottom of the screen on stock pages.
Local Marketing
In terms of bang for the buck, a strong Google Business Profiles (GBP) is one of the best investments a dealer can make for local marketing. The GBP is the front door to your business, and a fully optimised GBP with the correct categories and content will make your dealerships more visible to potential buyers in your area.
Dealers and manufacturers miss opportunities by ignoring their GBP.
The Right Category and Relevant Content
Each GBP can have ten categories: 1 primary and nine secondary categories. Often, we see only one category selected when dealers should be aiming to get as close to 10 relevant categories as possible. We have previously published the relevant GBP categories for dealers here.
Most GBPs we review are also missing keyword-rich content i.e. GBPs need descriptions and the products and services of the dealership or OEM listed. The below example on the left are the dealers listed on an OEMs site. On the right, only two appear on Google Maps when the OEM brand is searched.
This is an example of the GMBs missing critical information — the product and description sections of these Google Business Profiles.
Social Proof
Word of mouth is one of the most influential “media” on the path to purchase. Today. word of mouth has gone online through social proof and reviews.
One of the key review platforms is the Google Business Profile. These reviews are visible to active buyers where and when they are researching, and car dealers have long recognised this. In the example below, the top 3 Ford dealers in Sydney have 1.7k reviews, and the three dealers with the most reviews are the first to show when searching for a Ford dealer.
In addition to the social proof, your customers’ words when reviewing your dealership or OEM are used by Google for local ranking.
In the example below, car dealers with reviews similar to “best car dealer in Melbourne” are the car dealers that show for that search.
Ask your customers to review your dealership and ask them in a way to seed keywords in the reviews, as this will help your dealership benefit from social proof and improved organic rankings.
Google Business Profile Posts
The Google Business Profile has a section called ‘add update’. These updates offer a great form of free local advertising.
They also aid rankings for a business on Google Maps and allow you to show Google the most important pages on your site via links.
GBP posts are different dimensions to posts from other social media channels, and one of the most common mistakes we see is businesses using the wrong size, leading to the key message being lost. See below for an example of the same post – one copied and pasted from Facebook, the other optimised for Google Business Profile.
We have built a Canva and PSD template to ensure the sales message is visible. Get the template here.
Email Marketing
Email marketing can be some of the most profitable marking a dealership or OEM can undertake.
When undertaking the site maintenance mentioned above, another thing to check is ensuring the “join our email list” form works and feeds the emails to the mailing platform. When email marketing is not regularly used, we frequently find the email sign-up form has not been collecting emails when we turn it on.
Sales Events
Sales are back. Discounting is back. People have given their email to you and, by extension, permission to contact them. Make sure EDMs are a part of any sales event or promotion.
Service Centre
In tough times, buyers tend to maintain existing vehicles longer. Email marketing to the existing customer base can be a very effective (both in terms of cost and results) way of driving these customers into your service centres and maintaining long-term relations for when the market returns.
Nurture Emails
The path to purchase is long, and the competition is fierce. A website prospect is not a sale. Some dealers close 1 in 4 leads to a sale, and others close 1 in 20. For those with a 25% closing ratio, that’s 75% of leads who potentially bought another brand or from another dealership.
A nurture email sequence is a sequence of emails sent to a potential customer triggered by some sign of intent by that prospect, for example, a brochure download or lead or engagement with a finance or pricing calculator.
These nurture emails can keep your brand in mind with the prospect during the research process and keep bringing the prospects back to your site, building the relationship and improving the chance of converting that lead into a sale.
These require a bit of effort to set up at the start, but once up and running, they keep your leads warm and engaged and will improve the closing rate.
So far we have covered how a dealer or OEM can get better results from the assets they already own – the website, Google Business Profile and mailing list. The next section will deal with how to get the best results from marketing spend in an economic downturn.
Intent marketing
Google search ads and SEO are intent-based marketing. Appearing on Google, either paid or organically, allows a dealership or OEM to reach and influence buyers who are in-market and actively researching a purchase.
It is as close to bottom-of-the-funnel marketing as a dealership or OEM can undertake.
Google ads are an immediate impact investment, whereas SEO is a long-term investment.
Google ads can be turned on and generate leads today, whereas SEO may not yield a result for 3-6 months. The best approach is a mix of Google Ads and SEO.
Google Ads
Google ads insert your brand onto the top of a search results page and in front of your potential customers.
Google is a for-profit business. They make money from ads, so it is no surprise that 90+% of the desktop screen can be taken up with ads for high-intent keywords. In the example below, “Ute for sale” is almost all ads. The first Organic listing, Autotrader, just about makes it onto page 1.
Fish Where the Fish Are
As markets get tighter and the marketing budget comes under increased scrutiny, Google search ads offer the opportunity to get your brand in front of in-market buyers where and when they are researching a purchase. In a downturn, Google ads offer a direct path to reach and influence in-market buyers. Done right, it is exceptionally cost-effective with minimal wastage.
SEO - Search Engine Optimisation
SEO is the process of getting a site to appear on page 1 for terms potential customers will use when researching a purchase on Google.
It is often said that the best place to hide a body is on page 2 of Google. The chart below shows a site’s potential if they rank on page 1.
Position 1, page 1, has a CTR of over 27%. Ranking position one can significantly impact website traffic, leads and sales.
The important thing to remember with SEO is that it takes a lot of work and will often take at least 3 – 6 months to see meaningful results. In the leisure industries, such as marine, caravans and motorbikes, we see search volume, site visits and leads generated peak every January. The January peak can see 30% more searches than the lowest month of the year!
For example below is the weekly search volume over the last 12 months for the term “caravan for sale”.
January was the peak month with 47k searches per week, compared to 29.5k searches in July ’23.
SEO is often one of the first marketing channels cut in an economic slowdown, as the ROI isn’t immediate.
At the start of this article, we stated that the website is the cornerstone of all digital marketing strategies; it is the online showroom, and just like the physical showroom, it needs ongoing maintenance.
SEO is a crucial part of this ongoing maintenance. A good SEO strategy will ensure that the website is up to date with Google’s best practices and that the content and structure are presented in the best possible way to rank for specific terms. Part of any good SEO strategy also includes making sure the site converts traffic to leads or sales.
If you want to have a chance of your site ranking when the market peaks in January, the best time to start is now.
Interruption Marketing
Social media can be classified as interruption marketing. The intent of the users of these platforms is not to research a product to buy but instead to engage with friends and family. They are also very effective platforms for reaching and influencing prospects, but which platform is the best one to use?
TikTok may be taking all the headlines, and considering the average Australian spends 23+ hours a month on it, deservedly so. The downsides are the audience is younger, and the creative demands are heavier, i.e. content needs to be refreshed more frequently.
While it may not be the darling it once was, Facebook is still commanding over 17 hours a month and has a robust advertising ecosystem. Its audience is also older (i.e. can afford big ticket purchases), and for industries such as ours, where the product is a lifestyle, the visual element of Facebook and Instagram perform exceptionally well, selling the emotion and creating a connection.
Handover posts work exceptionally well on Facebook and Instagram.
They are easy to generate, build social proof and tend to get strong engagement with users. Strong engagement = more organic reach. Often the people who engage with it are those who bought the van and their friends, so the opportunity is to build your social proof with people similar to a recent buyer.
Adding a link to the post tends to reduce reach, so a brand needs to decide if they want greater reach or traffic to their website (however, adding the link as the first comment of each post can allow a brand to aim for both reach and traffic).
Facebook Ads
Facebook ads are interruption marketing. When people use Google, they are researching a purchase, whereas when they use social media, they are there to be entertained or to connect with family or friends.
Another difference between Google and Facebook, is that Facebook advertising is targeting a person rather than a search term. Facebook allows you to precisely target your ads based on demographics, interests, behaviors and online activities. This granular targeting ensures that your ads are shown to individuals who are most likely to be interested in your product or service.
Due to the way Facebook ads are targeted, the marketing messaging should initially focus on relationship building (top of funnel, ‘benefits’ type ads) to engage with potential customers. Remarketing plays a huge role in the success of any effective Facebook or Instagram campaign (see below for more details).
While Google Ads remain effective, Facebook’s audience segmentation capabilities, lower cost per click, and lower competition can lead to a better return on investment.
Try Our Ad Spy Tool Today
Looking for inspiration for your ads? Click here to browse 7,000+ Facebook ads by car, caravan, bike, boat, truck, construction and farm equipment dealers and OEMs.
Retargeting or Remarketing
The path to purchase is long in this industry, and the market is cluttered. Hundreds of sites compete for your potential customer’s attention, from competing dealers and OEMs to classified sites, social media groups, blogs, forums and industry sites, and even adjacent industries.
The average conversion rate for a website is under 3%, i.e. less than 3% of users will convert to a lead.
The remaining 97% leave your site, re-enter the clutter, and may never return. How does your business stay top of mind with these prospects?
Remarketing is a key strategy for that 97%, and Google and Facebook offer effective solutions to re-engage with and stay top of mind with potential customers.
If marketing budgets have been cut, remarketing offers a cost effective way to stretch the available budget and get the best ROI by
More Than Display
Google ads allow users to be retargeted for a maximum of 540 days.
Display remarketing is the most common form of remarketing on Google. With display, users knowing they are being remarketed to, they can be seen as annoying after a while. This is not to say don’t run them, more so to be careful; add frequency caps (how often an ad is shown to a user) and retarget for shorter spans (30 or 60 days).
Remarketing on search for 540 days allows a dealership or OEM to reach buyers who have been on your site and are now searching related terms on Google again over the next 18 months. The beauty here is the ads are only triggered when the user shows signs of intent (by searching specific terms on Google), and the user doesn’t know or feel like they are being retargeted. This can be great for long path to purchase products (caravans and motorhomes), service centres or repeat purchases e.g. farmers may buy multiple ATVs or UTVs.
Facebook Retargeting
Despite the ios14 update, where Apple cut Facebook’s access to data, retargeting on Facebook is very effective – indeed, in our experience, Facebook remarketing gets a better result (lower cost per lead) than Google.
Facebook offers the opportunity to retarget users who have been on your site or who have engaged with your brand on Facebook. Users who engage with your brand on Facebook can be retargeted for 365 days, while people who have visited the website can be retargeted for 180 days.
In our experience, Facebook retargeting is more powerful than Google, and if marketing spend is tight then Facebook retargeting will deliver a better ROI than Google.
Want to Drive More Traffic, Leads and Sales?
If you need help to capture prospects in this tightening market, get in touch with Retain Media to arrange a free, no-obligation consultation; get in touch with our team today, and don’t forget to check out our Insights for more tips and tricks to transform your digital marketing.
*Source insights by Retain Media
**Source insights by Retain Media
