Steve White shares why processes may be getting in the way of a dealership's profit.
I recently read a great blog about our industry by thought-leader Seth Godin. It explains how manufacturers and dealers do things very differently. Godin shares that manufacturers have worked for hundreds of years to refine and create more efficient ways to produce a quality product; evolving from “stopwatches and spreadsheets” to the robotic-assisted assembly lines that exist today, which have, according to Godin, “turned the process of making a car into a predictable, improvable system.” However, in Godin’s opinion, dealerships are not faring quite as well.
Throughout the history of auto dealerships, processes have always been an essential part of operations. These processes mostly revolve around retail sales and the most efficient and successful way is to sell a vehicle. They have been added to and refined over the years and now a literal bible exists with advice about how salespeople should guide the consumer when shopping for a vehicle.
But maybe… just maybe… things have changed.
As Godin states in his blog: “Car dealers might try to measure the easy metrics of output (how many sold) but they’ve consistently failed at managing the improvised human interactions that car salespeople engage in.”
Don’t worry. I’m certainly not here to tell you how to run your dealership or to preach about what processes you should use. I’d like to share a useful piece of information about how, in today’s Internet-driven world, the way you run your digital dealership is just as, if not more important than, how you run your physical dealership.
During the time the car shopper remains in the digital universe, they feel have all the time in the world. And, there’s an additional catch here: there’s nothing your dealership can do to influence that online customer if you don’t even know there are there. It’s one thing to know that 50,000 people visited a VDP page, your website, or a third-party site, but that is somewhat meaningless if those customers don’t convert. Sure, some of them may just stroll in. But you’ll never know why, where they came from, or what message influenced them unless you have some way to capture that information. And, that information is the key to successful marketing.
Most dealership spends a ton of money every month marketing to consumers. Far too frequently it’s hard to figure out where those consumers came from, which marketing channel is working, or which message resonates with them.
The problem lies in the fact that marketing is incredibly dynamic. For example, the effective channels which exist today (if you’re measuring) may become obsolete within as little as a year.
Managing your marketing budget and keeping up with processes that make for an effective marketing strategy can be a never-ending task.
The good news is that the information is out there to help you improve results, track customers, manage marketing channels and optimize results. You need to make sure you have a good, trusted method of attribution in place.
I have no doubt that every dealership would like to get the best bang for their marketing dollars. If digital (or even physical) processes are getting in the way, perhaps it is time to rethink how we’re doing things, evolve and create new processes and better ways to measure and adapt to our society. Consumers certainly are! READ MORE »
Clarivoy CEO Steve White discusses the importance of a dedicated employee at dealerships to handle digital marketing who is not focused on personal sales.
As time goes by, digital marketing is increasingly integrated into car dealerships’ ad budgets. Because of that, many options have developed which allow dealerships to create exposure and deliver ads in a more direct and targeted way -- more than was ever possible with traditional media.
Even some forms of traditional media have become digital, such as radio, which in its digital form allows you to target a specific demographic and interests, which certainly wasn’t possible before. Because of this explosion of digital marketing options dealers can be hard-pressed to keep up with the choices and any ROI, which they may, or may not, get from their advertising budget.
Historically, the dealer or general manager would meet with their ad agency regularly to discuss creative, budget and frequency. The ad agency would then make the appropriate media buys and the dealership would hope for the best. With digital marketing, so many channels are available to utilize that it’s harder than ever to be on top of your game for every channel.
According to a recent blog on Digitally Cognizant, digital marketing spending will be close to $120 billion by 2021. And, bringing it closer to home, a recent article in Automotive News states that, according to 2017 NADA data, Internet ad spend has eclipsed all other advertising spend combined. Therefore, your dealership would be wise to consider having someone in-house on your staff to oversee your digital marketing and ad spend.
For most dealerships, the person in charge of digital marketing inevitably ends up being the Internet manager, or Internet director (by title), whose pay plan is centered around sales commissions. Because of this, those staff members are more interested in selling cars than managing digital ads, the website or, at the very least, paying attention and analyzing where that budget is going and how it’s performing.
Many dealerships look to sales performance and expect an Internet department to pump up unit volume – and rightfully so. But that stud Internet department which pumps out units and profit can suddenly grind to a dreadful halt if someone isn’t paying attention to – and optimizing – where the digital budget is going and how it’s performing.
Having someone whose sole job is to manage, analyze and optimize that ad spend could, in fact, INCREASE sales performance; simply because budgets can be dynamic and shifted to better performing channels. Yes, dealers are used to designing pay plans around sales. It’s safe. But it may be costing you money in wasted ad spend and missed opportunities.
Who should you look for when (not if) you end up choosing to create a position like this? The Digitally Cognizant blog suggests that you may not want to look at experience as a hiring factor; rather someone with education and knowledge in current digital marketing platforms – like a recent graduate.
Why? Because, the article states, “it’s not years of experience that matters but finding someone who’s worked with digital marketing tools and techniques on actual campaigns and can point to tangible results.”
My thoughts are that most successful dealerships and groups have someone in place whose sole job is to ensure their digital marketing spend and channels are performing. This person identifies those which are performing or failing to perform, optimizes the ones which are and cuts the ones which are not.
Many dealers will consider this an extra fixed expense but, in all actuality, it’s necessary. As Internet spend budgets continue to increase as a percentage of dealership budgets, it will only become more important and necessary to have someone with the knowledge, skill set and focus on what will become, if it is not already, most of your advertising budget.
And, by optimizing your digital marketing ad spend, that employee is helping you sell more cars. Which is what every dealer wants. READ MORE »