Early Returns Point to a Strong 2012 for Auto Sales

Industry on Pace for 13.8 Million Transactions

January is off to a solid start, with new-vehicle floor traffic up more than 12 percent, reported CNW Research. Other key indicators showed that consumers are feeling a lot better about their financial position and might be ready to act on their pent-up demand.

Closing ratios also improved during the opening half of January, increasing by 10 percent from the year-ago period. Same-store sales also were ahead of last year by more than nine percent, the Bandon, Ore.-based research firm reported.

"At this point of the month, it appears the industry could hit 950,000 units, up 14 percent," wrote CNW's Art Spinella in his monthly newsletter. "Consumers are feeling a bit less concerned about job stability, day-to-day needs and other home-centric issues."

CNW's Jitter Index still sits above the year-ago period, but its 0.54 drop from December 2011 did mark its fourth month of decline. The index measures consumer sentiment regarding home-centric economic issues.

Another bright spot so far in January were subprime loan approvals, which rose more than 23 percent in the opening half of January vs. a year ago. And at 11 percent, approvals are at their highest point since September 2008, but still remain well below the heyday of 45 percent in mid-2006.

Looking at transaction type, CNW reported that 24.9 percent of transactions last year resulted in leases, down from 25.6 percent in 2010. The share of cash customers also decreased last year by more than 12 percent. "Consumers are increasingly willing to go into debt to buy a car," wrote Spinella. "While cash sales as a share of all sales grew in the recession, easier financing has and will continue to expand."

CNW also examined sales as a share of the population. The research firm reported that 4.1 percent of the U.S. population purchased a new vehicle last year. The high-water mark for this data point was 7.5 percent in 1986, compared to 3.4 percent in 2009. Based on the number so far in 2012 (about 23.9 million), CNW estimates that sales could climb to 13.8 million vehicles, or 4.8 percent of the population.

"The industry could easily pick up more than a half million new-car sales just from the pent-up demand pool," wrote Spinella. "Add lower credit score approvals from financing institutions and new models, and the industry easily looks like 13.8 million deliveries in 2012."

(Source: F&I Magazine, 01/17/12)

2012: Rise of Metrics, End of Click-Through Rates

Metrics and measurement will become a major tool in 2012 for advertisers looking to quantify campaigns. Industry execs have been talking about it for years, but Solve Media CEO and cofounder Ari Jacoby believes the movement will begin to materialize next year.

"At least one major industry will do away with the click-through rate for brand campaigns," Jacoby said. "For display, I get the sense that all the exchanges that have cropped up will have challenges. They will continue to be measured on the delivery of the click-through rate, but there won't be enough to go around and prices will drop precipitously."

Jacoby believes brands will begin hearing more about "cheap CPMs" for non-viewable commodity inventory -- the type of ad space that serves up below the online fold on a Web page where the person viewing the page must scroll down to see the advertisement. While it is counted as an impression, no one sees it because the ad unit literally sits at the bottom of the page or too far off to the side.

Ad rates will come down significantly in 2012 because the units aren't valuable. There are only so many top positions on a publisher's Web site. Buyers will increasingly require audience participation far beyond what the industry refers to as "engagement," Jacoby said.

The ad industry will move toward brand lift metrics in 2012, as a replacement for click-through rates. These are around user engagement behavior, brand awareness and purchase intent, along with other measures of perception and persuasion.

(Source: Media Post, 01/02/12)

Lead Generation...What Works for You?

When generating leads, focus on the activities that work best for you.

Just because social media is all the rage, for example, doesn't mean that's a good strategy for you. If you're not a fluent Tweeter or facile Facebook fan -- or more importantly, if your prospects aren't -- don't make that a cornerstone of your plan.

Are you especially good at personal phone calls or hosting webinars? Focus on your tried and true lead generation strategies and combine them with something new to expand your base of lead sources.

A Good Year for Automotive? Yeah, But...

All things considered, 2011 was a pretty solid year on the automotive sales front and ended on a positive note. So, hey, happy days are here again, right?

U.S. light-vehicle sales were up 10 percent to 12.8 million in 2011 after a similar rise the year before. Forecasters expect another increase in 2012. It's a healthy market, too, with low incentives, manageable inventories and reasonable profit margins.

But stacked up against 2007, the last full year before the financial crisis, it's a dramatically different market -- a lot smaller and with share much rearranged among the top players.

Indeed, the contrast between that old normal and what might be the new one is huge when you look at the numbers.

Sales in 2007 were 16.2 million, 3.4 million higher than last year. That's a difference of more than 281,000 units a month on average.

Everyone knows that post-bankruptcy General Motors is on the upswing, with a 13 percent sales gain last year and a larger market share than it had in 2010. But it lost 1.3 million sales from 2007 to 2011 and 4.1 points of share.

"Even with the kind of growth we're projecting, we're still in recession-like industry sizes," said Don Johnson, GM's U.S. sales boss.

He says slow but steady growth would help GM "maintain that discipline" and not overproduce, as the industry often did in the 2000s.

Toyota Motor Sales is down almost 1 million units from 2007. Hammered by quality problems in 2010 and earthquake-related product shortages in 2011, Toyota is down 3.3 share points. A temporary blip? We'll see.

The outlier is Hyundai-Kia Automotive, which made it through the crisis in superb fashion, adding 358,701 sales since 2007 and grabbing 4.1 share points, to 8.9 percent of the market -- ahead of Nissan North America and on the heels of No. 5 American Honda Motor Co.

Some other winners and losers since 2007:

-- Nissan/Infiniti gained 1.6 share points since 2007, the best showing of any Japan-based automaker.

-- Ford Motor Co., which launched an ambitious turnaround strategy before its Detroit rivals and avoided bankruptcy, has added 1.0 points of share.

-- Chrysler Group, even with a 2011 sales surge, is still 2.2 share points lower than in 2007.

-- American Honda lost 0.6 points of share, falling to 9.0 percent.

Sales have become more widely dispersed among carmakers since 2007. Smaller players, those outside the top seven, have increased their slice of U.S. sales to 14.1 percent, from 10.4 percent.

Four manufacturers accounted for most of that 3.7-point gain. Volkswagen Group of America has parlayed investment in marketing and a new Tennessee assembly plant into a 1.5-point gain.

Subaru, Daimler AG and BMW have picked up a combined 1.8 points.

Most executives and analysts say they understand that the "old normal" era -- nine straight years with sales above 16 million from 1996 to 2007 -- is over.

But they aren't sure what the new normal will be.

Analyst Jesse Toprak of TrueCar.com reckons that 14.5 million is a realistic average market size in the new era.

"We're still finding the new normal and we won't approach it until at least 2013," he said.

"But the industry's breakeven point is still 11 million, so this year should be very profitable for most."

IHS Automotive analyst Rebecca Lindland's "new normal" is 15.5 million to 16 million annual sales.

"That's a level that is sustainable without a lot of shenanigans," she said. "The industry can be very profitable at that level and yet flexible enough to contract if necessary."

Virtually all carmakers expect higher 2012 volume as the economy picks up and Toyota and Honda fully restore post-quake inventories.

"Timing is everything," said Toyota Motor Sales U.S.A. President Jim Lentz.

"We are entering a growing market that will grow 1 million units, in an improving economy, with growing interest rates, with 19 new and refreshed models to launch," he said.

GM's Johnson is encouraged by the Toyota and Honda recoveries.

"That brings back some buyers into the market who may have sat on the sidelines," he said. "We will get a shot at them."

Johnson expects to build on GM's 13 percent sales growth, which boosted its 2011 market share by a half point to 19.6 percent. GM is predicting industry sales of 13.5 million to 14.0 million in 2012.

Ellen Hughes-Cromwick, Ford's chief economist, said economic fundamentals are improving and that will help auto sales grow.

"The latest statistics show some very positive momentum," she said.

Toyota sees 13.6 million sales in 2012; Chrysler forecasts 13.8 million, and Volkswagen echoes GM at 13.5 million to 14 million.

Ford expects 13.5 million to 14.5 million, including medium- and heavy-duty trucks, which means about 13.2 million to 14.2 million light vehicles.

Toprak says the midyear sales stumble of 2011 may turn out to have been better for the industry than a rapid acceleration.

"This may be a healthier, more sustainable pace," he said. "It turned out to be a year of stable growth."

Toprak expects 13.8 million sales in 2012, which would be an increase of 8 percent.

Lindland said today's auto market is vastly improved from the 2007 version.

"It's much healthier," Lindland said.

"We got rid of the fast food -- the bad habits and the need to make products because it was cheaper to make them than not make them."

(Automotive News, 01/09/12)

Increase Your Pre-Call, Pre-Meeting Research

To survive in today's business world, you need to invest time researching your prospects BEFORE you contact them to arrange a meeting or appointment.

Meeting with an executive and saying, "I'd like to take a few minutes to find out exactly what you do and what problems you're facing" will not get you very far.

Corporate executives and key decision-makers are too busy to educate you. They expect you to know AND understand their business and the challenges they are encountering. They don't have time to listen to a self-serving sales pitch that does not address their specific needs.

Conducting pre-call, pre-meeting research is absolutely essential if you want to survive in today's tough economy.

It is the ante. The price to play the game.

If you don't do the homework before contacting a high-quality prospect, you run the risk of losing the business to a competitor who took the time, did some research, and was able to position his or her offering more effectively.

2012 Predictions For Marketing To Moms

Women and, more specifically, moms have been quite the marketing focus in 2011 and that trend will continue in 2012. Their influence over an estimated $2.4 trillion in household spending will continue to make them the focus of brands for some time to come. What will be the key to success with moms? Here are five important considerations.

1. More mom video content on the web.
Moms love to view other moms in action. They trust what another mom has to say more so than they do celebrities. And they consume a lot of video on a weekly basis. So it’s only natural that video content will continue to rise. YouTube is commissioning new channels and Deca has launched “Kin,” a mom/women’s channel. And, don’t forget “The Mom’s View” from Maker Studios. Moms are also finding that their personal channels on YouTube can turn them into web celebs, lead to book deals and make them money with the right content. Brands need to jump on the video bandwagon if they want to stay engaged with mom.

2. Mobile will continue to influence mom’s path to purchase.
Moms armed with smartphones are putting them to good use. Brands that don’t yet have a mobile strategy are way behind the curve. Moms see mobile as their command center and remote control for managing life. According to BabyCenter, 53% of moms purchased a smartphone because they had become a mom. And, it’s influencing her path to purchase. With smartphone and apps in hand, she can comparison shop, check out potential purchases with friends, download coupons, manage the budget and more. Her phone is connecting her to all the information and references she needs to make a purchase decision.

 3. Moms will continue to gravitate to brands that provide great experiences.
Sure a great product wows mom, but she’s also looking for a great experience. It’s the biggest motivator to get a mom talking to other moms and she’ll do so across digital channels. Our Hersuasion study with SheSpeaks showed experience was a more important loyalty-building tool than viral content or coupons. What’s her idea of a great experience? One that saves her time, saves her money, provides all the pertinent information, great service, and multi-channel access from a customer service perspective.

4. Brands will need to embrace her inconsistent use of media.
Brands will need to look at their traditional silo structures and form a more integrated approach for marketing to moms. She may not be an early adopter, but she is taking the digital landscape by storm while still consuming traditional media like email, TV and magazines. She’s tricky, because she uses whatever tech tool and media it takes to help her get the job done at that particular moment. And the content, wherever it resides, needs to be compelling because she’s multi-tasking with her computer on her lap, her smartphone by her side and the TV in the background. And more than half the time, she’s accessing her social networks over her mobile. And she might be watching TV on the Internet versus the old boob tube.

5. Customer service will continue to earn yeas or nays.
Moms are speaking out via a brand’s social presence on Twitter and Facebook, as well as other platforms where she can voice her opinion. Brands can’t afford to ignore mom. She wants companies to respond to her and use the feedback she is sharing. She wants to know the CEO is listening and hear from him/her.

And customer service is so much bigger today than responding to complaints. For mom, service is about everything from correct product information to the brand’s ethical and social responsibility (sustainability, eco-friendliness, cause support.) Customer service is about being relevant and providing the right content for age and stage. Brands looking to connect and stay connected with mom will need to have cross platform content strategies in place.

Holly Pavlika - Big Fuel

Branding: The Law of the Word

The Law of the Word states that a brand should strive to own a word in the mind of the consumer.

Building a brand in the mind of end consumers requires focusing branding efforts on owning a word or a term in their minds. To have some fun with this concept, here is a short quiz. Below is a list of words (slogans) that various auto brands own in consumers’ minds. Try to guess the brand without looking at the answers below.

1. Tough

2. Moving Forward

3. Zoom Zoom

4. Like a Rock

5. The Ultimate Driving Machine
(1. Ford 2. Toyota 3. Mazda 4. Chevy 5. BMW)

 

Here are a few other completely unrelated categories.

1. I’m Lovin It

2. Just Do It

3. You Can Do It—We Can Help

4. You’re In Good Hands

(1. McDonalds 2. Nike 3. Home Depot 4. Allstate)

These companies have been successful at focusing their branding efforts on owning a word(s) in our minds. Once a brand owns a word, it is almost impossible for a competitor to take that word away from the brand.