by Dana Snyder
Keep Your Dealership’s Marketing Expectations in Check
If you’ve spent any time in the car business, you’ve experienced the customer who visits your dealership and wants the “Premier Platinum Executive Edition” of the latest model in your showroom and “oh, keep the payment under $200”. Clearly you have a misalignment of expectations on your hands. Any good salesperson can overcome this hurdle, but it starts with assessing the needs and wants of that customer and helping them understand the realities of their budget. Like that customer, you must also assess the needs and wants of your dealership as you build your marketing plan and budget.
The first step is determining your goals to best align efforts and expectations from the beginning. When mapping out your goals, evaluate how realistic they are to achieve given the realities of your business. For instance, if you want to grow new-vehicle sales by 200% without increasing your inventory, adding salespeople or improving your closing rate, then no amount of marketing dollars are going to accomplish your goal.
Once you’ve decided on goals that are realistic for your situation, pick a few key performance indicators (KPIs) that will give you feedback on the success or failure of your marketing efforts. Don’t be fooled into measuring your marketing success by sales alone. Retail sales are often a lagging indicator. Your efforts will take some time to gain momentum and traction. Today’s advertising will be responsible for sales 30, 60, even 90 days from now. Sales are also largely dependent on your staff, process, inventory and retail pricing. If those areas are not all operating at peak performance, the best marketing plan in the world will often fail. Here are some KPIs to monitor for a goal of increased sales:
- Increase quality web traffic that drives low-funnel intenders to vehicle description pages (VDPs) and inventory search results pages (SRPs)
- Increase the lead capture rate of your website
- Increase your floor traffic
- Increase your closing rate
- Increase your inventory size
- Feature the most aggressive pricing you can sustain online
As a result of these efforts, you should also expect to see:
- Increase in your market share
- Increased sales effectiveness in your primary market area (PMA).
Now let’s continue and review our top tips to managing expectations. Let’s start with your dealership performance and break it down by whether you are 100% sales effective. If you are, the best source of growth is probably outside of your PMA. If you’re not, then you’re missing opportunity in your backyard. You should bolster your backyard efforts first, to own your local market. Tighten up your search engine marketing campaigns. Focus your social media advertising efforts. Capture every local low-funnel online shopper you can. These customers are generally more profitable and have a much higher probability of becoming a service customer and return sales customer. This will require some expertise and possible re-evaluation of your media mix.
The same goes for growth outside your PMA. Identify the areas where you have opportunities and target them geographically through both targeted and broad-reach media. Since you’re now covering a greater geographical area, broad-reach media becomes more viable and dual-purpose…not only do you reach markets outside your PMA, but you reach your backyard customers too. This enhances the digital efforts you already have in place. Don’t forget, when you reach outside your PMA, you’re going head-to-head with your competition in their backyard and they’re probably using the same tactics as you when trying to own their PMA. You’ll want to have additional budget to support your advertising as you increase your reach and compete with these other dealerships. A half-hearted attempt at conquest marketing outside your market area will only result in wasted advertising budget. Commit to the area, set a reasonable timeframe to see results and re-evaluate your efforts at the end of that timeframe. You’ll typically need at least 90 days to gain some traction. Don’t expect tangible results in just a week or two.
Marketing is like anything else. You can’t do the same thing over and over and expect different results. Whether it’s your ad spend or your targeting strategy, keep your expectations realistic. Because just like your customers, you’re not getting the “Premier Platinum Executive Edition” for the base model price.
Are you’re ready to evaluate your marketing plans at your dealership or group? Consider partnering with an expert agency like CBC Automotive Marketing as an essential part of the process. Let’s have a conversation.