Days on Lot Are Rising: A look at how Covid has impacted Marketing Strategies for Dealers

The automotive industry has always been susceptible to external forces. From global economic slowdowns to rapid technological changes, dealerships have had to stay agile to ensure their inventory moves fast and efficiently. However, the global Covid pandemic has brought about abrupt and fluctuating changes that dealers have been forced to navigate, especially when looking at their sales and marketing.

Back in 2020, the Pre-Covid days, dealers had to work diligently to maximize their profits and employed a variety of marketing efforts to achieve it. However, once Covid hit, dealers faced an unprecedented wave of demand which resulted in high profits and a faster sales turn without having to do any marketing. Fast forward to 2023, the industry is normalizing and dealers are now looking for ways to accelerate their sales turn cycles. One key metric, a vehicle’s ‘Days on Lot,' has historically always been a pulse-check for dealers on their overall inventory marketing performance. This article will take a closer look at the marketing strategies that were employed by dealers during Pre-Covid, during Covid, and the current landscape of Post-Covid times.

Pre-Covid Days: When Days on Lot Dominated Dealer Decisions

Before the global pandemic, rising Days on Lot was always a significant metric that was a concern for dealers. Dealers had a variety of marketing tools available to them, many of which were cutting-edge at the time due to the nature of the automotive marketing industry’s innate need for innovation to drive sales for dealerships. Marketing vendors and technology providers were in high-demand and therefore placed an emphasis on innovation as well. The automotive marketing industry was thriving.

Covid-Struck Times: When Supply and Demand Ruled All

Enter 2020. With supply chain disruptions and a drastic increase in inventory demand brought on by the population’s desire to leave the city, the automotive world faced a paradox. The supply of new vehicles dwindled, causing both new and used vehicle sales to skyrocket in profit margins. The metrics shifted – it wasn't about how fast you could sell a vehicle, but at what price.

This unexpected boom led to an unintended side effect: dealers became complacent with their marketing strategies. The demand was so high that many believed they didn't need to invest time or resources into refining their marketing campaigns. Days on Lot? It was no longer a dealer's primary concern. As for vendors and marketing technology providers, with the lack of demand for their services, innovation was also put on the shelf by many.

Post-Covid Era: The Re-emergence of Strategic Marketing

As the world begins to normalize, dealers are once again becoming concerned with rising Days on Lot, and placing an emphasis on their marketing strategies to help deal with the problem. With margins tightening again, dealers can no longer ride the wave of unprecedented demand. Although many vendors and marketing technology providers slowed their innovation, it was during the time of Covid uncertainty that VIN IQ was born.

The Way Forward: Leverage True Innovation in Automotive Marketing

Working with a small group of BETA dealers from 2020-2022, VIN IQ was built and continuously modified based on their direct feedback. Today, dealers using VIN IQ are given detailed insight into their dealership’s marketing performance with reporting at the vehicle level. VIN IQ’s detailed vehicle-by-vehicle reporting highlights Days on Lot corresponding with how many Vehicle Details Page (VDP) views the vehicle received. Since an increase in VDP views leads to an acceleration in a vehicle’s sales turn, the sooner a potential customer interacts with a VDP, the quicker a conversion can be made, resulting in a reduction in Days on Lot.

This is where VIN IQ’s true innovative colors shine. With integration capabilities into major ad platforms like Google and Facebook, VIN IQ can promote vehicles in need of traffic exposure based on their respective VDP traffic, enabling dealers to hit the gas on accelerating conversions.

VIN IQ enables dealers to achieve significantly better results using the same marketing spend. VIN IQ eliminates wasting resources on vehicles already enjoying organic/free traction, or have received adequate paid traffic, and instead concentrates marketing dollars on vehicles that need it.

Unveil The Unknown: VIN IQ’s Free Marketing Analysis

Many dealers are in the dark when it comes to truly understanding their inventory marketing. To help dealers shed light on their performance, VIN IQ’s free Marketing Analysis provides detailed reporting for each vehicle in inventory and gives dealers the transparency needed to understand how their marketing dollars impact their sales turn cycle.