Auto sales are in a slump right now. The recession has caused consumers to retreat and pull back their spending and the news coming out of Detroit hasn’t helped either. The auto industry is in flux right now, there is no denying that, but people still need to get to work, they still have groceries to pick up, and the kids still have a baseball game on Saturday, which means people still need cars. The hard part is convincing those customers to buy in a climate where everything around them, from the news to their neighbors, is telling them to wait. To make matters worse, the lack of sales over the last six months has led to a glut of inventory that not only isn’t making any money for dealerships, but costing them money in floor plan costs. So what is a dealer to do? How can you convince consumers that now is the time to buy? The answer is sales events.

There are a lot of new ideas out there about how to connect with consumers, everything from using Twitter to stay connected with your customers to closed circuit TV channels for your waiting room. Many of these are good ideas, and in a world where everyone is searching for the latest thing to help them market to consumers, sales events might seem boring and old-fashioned. Sometimes, however, boring and old-fashioned means tested and proven. As Terry Lancaster, a partner at InstantEvents.com, says, “We get calls every day from dealers looking for a hot new idea, and we tell them that we're not in the hot new idea business. We're in the battle ‘proven, been done a million times before because it keeps on working idea’ business.”

I’m not here to disparage new media or the Internet, they’re an important part of any dealership’s marketing strategy; having a Website is as essential to today’s dealership as having a telephone. The new channels for communicating with your customers and sales strategies, however, should not make us forget about the tried and true sales techniques. One of those tried and true techniques that has helped dealers sell cars since the inception of the auto dealer industry is to have a sales event.

The benefits of sales events

One of the most important things that sales events do that cannot be done by simply advertising the lowest price in town is to tap into consumers’ emotions. Perhaps someone is considering buying a car, but is putting it off due to the economy or the belief that the price will go even lower next week. If you’re having an event this weekend, however, it can help convince that consumer that now is the time to buy. “Research shows that the simple act of putting an expiration date on a coupon will increase its redemption rate by 30 to 40 percent. Sales events do the same thing for auto sales. By giving customers a definite buying window, with a definite end date, it forces them to quit thinking rationally and start acting emotionally...out of fear that they might lose out on a good deal, out of greed for getting that good deal, but most of all out the shear emotional excitement of getting a shiny new toy.” Lancaster explains.

Generating that emotional excitement can help you move inventory that is sitting on your lot costing you money in insurance and floor plan costs. Clearly, turning your excess inventory into revenue benefits your dealership, but there are benefits that last beyond the end of your sales event. Drake Baerresen, vice president of marketing and co-founder of Turn-Key Events, a leading provider of full service sales events and event marketing, agrees that increased sales is “one of the biggest benefits for a dealership of holding an event,” but he adds that a sales event “also brings in a lot of new customers that have never been to that store before and gives the sales staff fresh prospects to work. So it gives the dealership fresh inventory and it gives them fresh prospects to work so it gives them a higher amount of residual sales after the event.”

If your dealership has all the sales it can handle then perhaps you don’t need to hold an event. I’ll bet for a lot of the dealers out there, however, selling off their excess inventory and giving hot leads to their sales staff is what they need right now.

Planning your event

The first step to planning an event is to pick the theme. “Whether you call your sales event a Red Tag sale, a Yellow Tag sale, or a Giant Blue Gorilla sale may be the least important decision you'll make, but it does have to be the first so that all the subsequent important decisions are working together, pulling in the same direction,” advises Terry Lancaster of InstantEvents.com. As Lancaster points out, whether it’s a Blue Gorilla sale or a Summer Blowout sale isn’t the most important decision you make when planning an event, but it does have to be the first. All of your marketing for the event has to follow the same theme so that all of your marketing helps to promote the event and grow sales. If you are going to have a giant inflatable leprechaun and his pot of gold on your lot, you need to have that same image in your marketing.

Once you’ve decided on the theme to your event, the next step is to pick a reputable vendor to help. Deciding on which vendor to partner with is one of the most important decisions when planning an event. That is why Drake Baerresen advices that, “When they [dealers] choose a company they need to find one that’s credible, has a good reputation, and check out their references. Make sure that they have references and call five or six of them. Maybe contact NADA and see if there have been any complaints about that company before.”

After you have found a partner to help put on your event, the next step is to determine when you will hold your event. “The times when you get the highest return on investment are traditionally in the summer,” advises Baerresen, but often when you hold an event is determined by when you have excess inventory that you need to sell and not by the season. If this is the situation in which you find yourself, there are still opportunities to be had at other times of the year by taking advantage of the times when your competition isn’t advertising. “Our best events for 2008, every single one of them, were in December. That’s because most dealerships don’t advertise heavily in December and so you get more impact in the marketplace when less dealerships are advertising.” Baerresen adds.

It might seem incongruent that the best time of year to hold an event is in the summer, while Baerresen reports finding the most sales in December, but the answer lies with the fact that only one percent of the population is searching for a vehicle at any one time. So while summer is traditionally the best time to sell cars, there are always new customers coming into the marketplace that can be steered to your dealership by a sales event especially if you are the only dealership asking them to come in.

“It's hard to have too many sales events because only one percent of the population is in the market for a car at any given time. The other 99 percent couldn't care less about you, your dealership, or your advertising, they're going to ignore everything you do or say anyway. The good news is that next week, you've got a whole different one percent in the market and they don't care what you did last week; they're looking for a giant, deal of a lifetime buying opportunity right now A good sales event gives them what they're looking for,” explains Lancaster.

Even more important to holding a profitable event than picking the right time or year, however, is making sure that your sales staff is prepared when the customers start showing up on your lot. “If a customer says, ‘It looks like you’re having a sale’ and the salespeople don’t have the right answer—it’s a bust! All sales events must have the sales people in full synch with what is going on,” imparts Ike Chris, owner of Carlot Promotions Inc., a leading supplier of auto supplies and promotions. If customers show up on your lot expecting a big event offering zero percent financing or a big sales contest and your sales people aren’t aware of the promotions you’re advertising in your marketing, you’re throwing money away. Drake Baerresen agrees, adding, “Another mistake dealers make is not being prepared for the event. Not being prepared for who’s going to register the guests, whose job it is to tell them what the sales process is going to be for the event, where are the used cars going to be, etc.”

Promoting your event

After deciding on a theme, a date, and preparing your staff for your event, now is when you need to promote your event. Some experts, such as Terry Lancaster, believe that dealers should, “try not to think of sales events as a different budget category. The latest NADA stats show that dealers spend about $610 per new vehicle retailed on advertising. Take that $610 that you're already spending and use it to advertise sales events instead of generic, ‘for all your automotive needs’ ads,” he says. Lancaster also believes that, “There is a time and a place and a reason to use almost every medium: print, radio, TV, car shopper's guides, Web, direct mail, but the important thing is that everything you do be in synch. From the radio and the TV and the newspaper to the receptionist answering the phones and the banners hanging on the wall—They should all be saying the same thing.”

Baerresen agrees that all of your marketing efforts should work together; however, he feels that direct marketing is the best way to promote an event, because of its measurability, “The best way to promote an event is through direct marketing, because it has a measurable impact on the customer so that way your results and return on investment are completely measurable. TV is not 100 percent measurable, radio is not 100 percent measurable; so far the only thing that is 100 percent measurable is mail.”

Ike Chris doesn’t delve into the argument over which form of advertising is best to promote an event, however, he does believe that, no matter what marketing channel you choose, “the biggest mistake most dealers make is to spend thousands of dollars [on promotion] and when they do get a customer response the dealership looks dead—no dealership excitement and salespeople that don’t know what the ad says or promotes. All sales should be special. The whole store needs to say, sale, sale, sale!”

Mike Nealy, one of the owners of SuperSignwalkers.com, agrees with Ike Chris about the importance of lot decoration and making your dealership look like it is having the sale of the century. There are many different options for lot decoration, but Nealy has found sign walkers to be one of the most effective at bringing in traffic off the street. “The majority of dealers are located in high, vehicle traffic locations and need to take advantage of the thousands of consumers who can be made aware of a major event or offer in the form of sign walkers,” he explains. “We have found the impact of just a few sign walkers to be huge on a retailer's weekend traffic.”

The bottom line

Things are tough in the auto industry right now; it’s just the way it is. Customers are feeling the crunch too, so you need to work harder than ever to bring them in and get them sold. “The bottom line is customers need a better, excited way to get to the dealership. They need the perception, because of the state of the economy and the state of the auto manufacturers, that your dealership has an offer that’s unbeatable, that this is the time. You sell the customers on that perception and piggy-back off of what’s going on around us and use it to your advantage,” says Drake Baerresen of Turn Key Events and he couldn’t be more right. The economy will improve, but it won’t be overnight, so right now we have to work with the situation as it is. Yes it’s a cliché, but every cloud has a silver lining. Sure sales are down and customers are putting off major purchases like cars, but there is still business to be had if you send the right message. Have an event to let your customers know you are here to stay! and this could be the best time buy a car in the last 20 years, and it won’t last forever.

Sales events work; that’s why everyone from the record store to the pizza place has them. Events bring in customers and create excitement in your store that gets customers in a buying state of mind, which of course is a great opportunity for your dealership. Once the opportunity is there, however, you need to take advantage of it and sell to those customers. Just because they are interested in your vehicles and have arrived on your lot doesn’t mean you don’t have sell to those customers. As Terry Lancaster relates, sales events, “make it sound and look like something big is going on so that all the dealership has to do is do what car dealerships do: sell cars!” What sales events don’t do is sell those cars for you. Drake Baerresen sums it up well, “You have to work twice as hard during an event. Just because you have more customers there, it doesn’t mean you have more lay-me-downs.”