It is said that if you know your enemies and know yourself, you will not be imperiled in a hundred battles.
– Sun Tzu: The Art of War
Your business doesn’t exist in a bubble. The actions of your competitors represent real threats (and opportunities) for your business.
Leading dealerships have exceptional operations and processes that should be monitored, and, just like a 20-group, you should have an opportunity to learn from these top performing dealers.
Automotive dealerships face unprecedented profit margin compression from multiple sources, including:
- Tesla’s push to bypass dealers and operate factory stores (and its implications on other OEMs and their dealers in the future)
- Manufacturers’ opposition to dealer-backed state franchise legislation
- Regulators’ crackdown on advertising and lending violations
- Third-party lead providers positioning themselves between the customer and the dealership
- The Internet and the price transparency it brings
- Rival dealership groups’ huge technology investments (and the challenge that smaller players face to keep up)
- New technology “disruptors” such as Carvana, Vroom, and Roadster
- Looming potential “disruptors” like Amazon
The future outlook for car dealers doesn’t anticipate that these pressures will get better anytime soon. In fact, some see increasing headwinds as new car volumes top out, interest rates begin to rise, and the economy faces downward pressure.
As a result, dealers need to be more resourceful than ever to maintain their competitive edge. Ongoing success depends upon continuing to improve operational processes and thinking ahead for the future. Having the right actionable intelligence at your fingertips is vital.
Competitive Intelligence in the Automotive Space
There are a number of examples of competitive intelligence software outside of automotive, but for whatever reason, dealership-specific tools have not yet been made available.
Having said that, early-adopter dealers found ways to exploit data to their advantage. In particular, Carmax is well-known for leveraging data analytics to create superior operational processes:
What does competitive analytics look like in practice? Consider the case of CarMax, the largest U.S. specialty retailer of used cars, and at one time, was the fastest retailer in U.S. history to reach $1 billion in revenues. How? Although several factors play a role, including a compelling customer offer — no-haggle prices and quality guarantees backed by a 125-point inspection that became an industry benchmark — and a lucrative financing arm, CarMax’s business model relies upon a proprietary information system that captures, analyzes, interprets and disseminates data about the cars CarMax sells and buys.” – MIT Sloan Management Review, “Creating Business Value with Analytics”
But how many dealerships have the size and scale to develop sophisticated data analysis tools internally like CarMax?
Without an industry-specific competitive intelligence tool providing dealers with updated and easily accessible data on a daily basis, it’s very hard to develop a clear view into competitors’ strategies over time. Knowing the competitors’ direction allows you to modify your strategy to counter theirs—and thereby close the gap to achieve great results.
If you are one of those rare dealerships that conducts competitor monitoring on a daily basis, you’re ahead of more than 95% of the other dealers – a huge tactical advantage. But most dealers run the risk of being left behind.
The Ideal Competitive Intelligence Product
The ideal competitive intelligence tool in the automotive space would have the following features:
- Allow a dealer to define the specific competitive dealers they want to monitor.
- Allow a comparison of:
- New/Used car inventory stocking
- Pricing strategy
- Website traffic and quality (bounce rate, time on site, pages viewed)
- Advertising (sources, organic keywords, paid keywords)
- Enable customized “push alerts” to notify the user when competitors are outmaneuvering the user’s store across specific, targeted metrics.
- Suggest solutions for how the user can close gaps between their performance and their competitors.
Such a tool would sift through an enormous amount of data to identify complex patterns that are not obvious, distilling down to clear actionable priorities for the user.
To do this effectively with human intelligence alone would require substantial manpower. Competitive Intelligence software would enable a single user to deliver the equivalent output of an in-house intelligence team.
Within the dealership, different stakeholders would use competitive intelligence information differently. For example, the store’s General Manager would be more interested in a high-level summary view of the biggest opportunities at the dealership; the General Sales Manager might be more interested in aged new or used units and or mispriced vehicles; the store’s head of Marketing might be interested in website traffic, consumer engagement metrics (e.g. bounce rate, pages viewed and time on site), and keyword spend by competitors.
Today’s dealership has to stay permanently ahead of the game in order to drive results and alleviate margin compression. The practical solution is to let technology do the heavy lifting, and the best way of achieving this is with the support of competitive intelligence software.
Such a tool would make it possible for non-experts at the dealership to deliver intelligence equivalent to what would only be available through a team of data scientists and researchers. As a result, dealers would be better informed and empowered through automated monitoring and reporting to support both strategic decision making and operational implementation of new processes.
CompetitorPro is the industry’s first competitive intelligence tool built specifically for automotive dealerships.
As dealers look for ways to compete more effectively, advanced competitive intelligence solutions provide accuracy, analytics, and actionable recommendations that are missing in the market today. CompetitorPro’s competitive intelligence solutions utilize complex algorithms that summarize insights so dealers can perform at the highest level of effectiveness in today’s dynamic marketplace.
It’s not just having competitive intelligence…it’s what you do with that knowledge that counts. Let us show you how you can keep on top of the competition in 5 minutes a week with our automated dashboard and alerts.
It’s getting harder out there, and today’s automotive dealer must have the latest and best strategy, tools, and tactics for success. CompetitorPro is that solution.