Apples to oranges: An illustration

[Note: This is not just a story about car dealerships.]

Recently, I was invited to speak at an Elm Street Economics event in Columbus, Ohio, which would be attended exclusively by owners and managers from car dealerships. I wanted to conduct some basic market research before the event, so the sponsoring television station allowed me to write a number of questions to be used in a survey of their loyal viewer database.

I didn’t want to dig for the same information that might be available through J.D. Power, Edmunds, or a manufacturer’s CSI reports. Among other things, I wanted to see how consumers might be thinking about setting their purchase priorities. I won’t bore you with all the results here, but I will give you two examples of what we asked and what we heard in response. (Note: The question format was multiple-choice. The survey received more than 1,800 responses; roughly 71% of participants were female, and the age balance was heavily skewed toward 35-64.) In this non-scientific study, we asked:

In these economic times, some people might choose to defer or delay one purchase, in order to afford another. What major purchase(s) might you delay in order to move forward with a vehicle purchase? (Check all that apply.)

28.7% said they might delay a furniture purchase

15.0% said Appliance(s) might have to wait

32.8% said Home Improvements

43.9% said they might defer a Vacation

17.6% said a New Home purchase

19.4% said, “Other”

Of course, the converse could be true; other priorities might keep someone from making a vehicle purchase. So we also asked the question in reverse:

What major purchase(s) might force you to delay the vehicle purchase you’d like to make, due to overall budget considerations? (Check all that apply.)

12.2% said an new Furniture is a bigger priority

26.4% said Appliance(s) need to come first

42.4% said Home Improvement is ahead of the car

17.0% said a Vacation was more important

16.4% indicated a New Home will happen first

29.4% said, “Other”


Implications: Here’s what I’m thinking about, based on this input. 32.5% of these respondents might have to delay a home improvement if they move forward with a vehicle purchase. On the other hand, 42.4% might not buy a vehicle right now… because they have a home improvement expense coming up.

Would now be a good time for the car dealership to partner with a home improvement retailer, to build an offer that could help the consumer move forward with both? For example: Take a test drive this week and receive a (modest) gift card to The Home Depot. Or, buy a truck and we’ll fill it with 2x4s (a gift card redeemable at the local lumber outlet). Or, “Invest in a family car right now, and we’ll throw in everything… even the kitchen sink.” The offers could be commensurate; a discount on Formica countertop with a mid-size car, or a discount on granite countertops with the purchase of a luxury car.

(I singled-out home improvement because lots of folks will be living in their current home for a long time to come, as they wait for home values to catch-up with the size of their mortgage. You might find out-of-home dining, day-trip vacations or some other category to be a more logical partner, depending on the input of the target consumer.)

In case you don’t have it yet, here’s the point: Your entire product or service category sits among other purchase priorities the consumer might have… not just among other competitors.

How can you make sure yours is the most important priority, or partner with compatible companies/categories to make the decision easier for the consumer?

Mike Anderson