Showing posts with label dealerships. Show all posts
Showing posts with label dealerships. Show all posts

Tuesday, September 25, 2012

Marketing Your Automotive Dealership is NOT that Hard to Do

Recently, I traveled to New Mexico to consult with a dealership about their marketing strategy.  The conversation went a bit like this:

DeliveryMaxx: “What are you currently doing with advertising today?”

Dealership: “We are doing print (newspaper), TV, Radio, and I have a billboard two exits down.”

DeliveryMaxx: “How is that working for you?”

Dealership: “I can’t really put an ROI on it, but I think it is branding us.”

DeliveryMaxx: “In a perfect world, what would you like your marketing and advertising do for you?”  

Dealership: “We want it to brand us, talk about our customer service, and help us sell more cars?”  

DeliveryMaxx: “At least you know what you want it to do for you.  Now, is that strategy working?”  

Dealership: “I’m not sure.  That is what we have always done.  I do know this.  We are spending a lot of money for this advertising, and I can’t measure the results.”

 As a marketer, I see a lot of marketing and advertising spends, but the strategy is all too often ambiguous at best.  There is nothing wrong with traditional advertising.  However, in today’s climate businesses have to maximize their advertising spend.  Is your marketing and advertising accomplishing your goal?

 Before we talk about strategy, let’s use the traditional billboard advertising medium and see if that is providing the best return for your automotive dealership.  The cost to design and produce a billboard averages $ 900 to $ 5,000 depending on the content and who creates the advertising piece.  For a 4-week cycle (marketing companies charge this way because they get an extra month of fees) your cost will range from $ 900 to $ 5,000 for city and interstate signs.  Many of our major highways command as much as upwards of $ 10,000 per cycle (4-weeks).  DeliveryMaxx’s offices are in Dallas, Texas and a recent price quote I received for signage on Loop 635 (LBJ or Lyndon B. Johnson Highway) was for $13,600 per cycle and an additional 25% during December.


 What is Your ROI for this Ad?  What are you trying to say?

 I am not advocating vacating your traditional media spend.  In fact, Ford and General Motors allocate 70% of their advertising dollars worldwide to traditional media.  However, dealerships must have a precise strategy especially during cost-cutting initiatives.  Too often, I see strategies that are the equivalent of throwing ideas into a fan and seeing what sticks on the wall.

Do your marketing meetings produce results like this?

 Marketing and Advertising your automotive dealership is relatively easy to do.  Motivating the consumers’ actions take some well thought out strategy. 

First, you need to identify where the eyes of your consumers are looking.  According to JD Power & Associates Automotive internet Roundtable nearly 80% of all vehicle buyers consult the internet before making a purchase.  That means, you should move more of your dollars to Digital Marketing or Social Media versus traditional forms of advertising.

Second, what is the goal or consumer behavior that you are trying to accomplish?  When considering what type of vehicle the consumer is going to purchase they research published online reviews, blogs, friends and family via Facebook, Google plus, & twitter, and then dealership websites (generally in that order).  Ultimately, your goal is to entice the customer to view your website or visit your dealership.  So how do you influence the consumer to give you a chance to sell them a vehicle?

You have to have a plan.  Social Media is not going away.  It is too convenient and immediate for the consumer.  Sites may change, but the medium is here to stay.  Therefore, how do you talk to potential customers?  There are hundreds of Social Media Sites that resonate on the worldwide web.  Sites such as Pinterest demographics are 97% women.  LinkedIn is dominated by the workforce.  Facebook has replaced many phone conversations.  FourSquare is the new GPS.  YouTube has replaced MTV.  Google Plus is the new business card.



 For centuries, businesses have become great their customers have advertised for them.  In the past, it was by word of mouth at a family gathering.  Now, Social Media has made it acceptable for society to share anything from what you had for breakfast to where you went last night.  People will actually take a picture of food and show it to the world.  This is no different for your business.


 The Math is Simple!

The average Facebook user has 245 friends.

If you sold 200 vehicles in a month and your customer showed off their vehicle on Facebook, you would be branded to 49,000 new potential consumers a month.  That’s just Facebook!  Don’t forget about the other sites as well as online reviews.

Now, think about this.  If 1% of those customers were interested in your dealership because of the positive message that was sent by your client, you would have an additional 490 opportunities for a new sale.

The above photo of this happy family from Southwest KIA Dallas was put as their public image on Facebook for the world to see immediate after they purchased their vehicle.  In one hour, the photo received 15 “Likes” and 10 comments.  If each of the Facebook users who “Liked” and “commented” on the photo also had 245 friends then that one sale would have REACHED 6,370 people. Remember, this family also reviewed the dealership online, and their family portrait went to hundreds of other Social Media sites.  In short, they became a virtual billboard for Southwest KIA.

Marketing your dealership is not that hard to do.  You just have to have a great product, excellent customer service, and a strong strategy to share your message.

For more information on Social Media Marketing, Online Reputation Management, Search Engine Optimization (SEO), Local Search Engine Optimization (LSEO), and Customer Loyalty & Retention, please visit DeliveryMaxx.

















Sunday, August 26, 2012

Customer Retention & Loyalty Done Right

Customer Retention marketing is a tactically-driven approach based on customer behavior. It's the core activity going on behind the scenes in Relationship Marketing, Loyalty Marketing, Database Marketing, Permission Marketing, and so forth. Here’s the basic philosophy of a retention-oriented marketer:

1. Past and Current customer behavior is the best predictor of Future customer behavior. Think about it. In general, it is more often true than not true, and when it comes to action-oriented activities like making purchases and visiting web sites, the concept really shines through.


We are talking about actual behavior here, not implied behavior. Being a 35-year-old woman is not a behavior; it’s a demographic characteristic. Take these two groups of potential buyers who surf the World Wide Web:

People who are a perfect demographic match for your site, but have never made a purchase online anywhere. People who are outside the core demographics for your site, but have purchased repeatedly online at many different web sites. If you sent a 20% off promotion to each group, asking them to visit and make a first purchase, response would be higher from the buyers (second bullet) than the demographically targeted group (first bullet). This effect has been demonstrated for years with many types of Direct Marketing. It works because actual behavior is better at predicting future behavior than demographic characteristics are. You can tell whether a customer is about to defect or not just by watching their behavior; once you can predict defection, you have a shot at retaining the customer by taking action.

2. Active customers are happy (retained) customers; and they like to "win." They like to feel they are in control and smart about choices they make, and they like to feel good about their behavior. Marketers take advantage of this by offering promotions of various kinds to get consumers to engage in a behavior and feel good about doing it.

 These promotions range from discounts and sweepstakes to loyalty programs and higher concept approaches such as thank-you notes and birthday cards. Promotions encourage behavior. If you want your customers to do something, you have to do something for them, and if it’s something that makes them feel good (like they are winning the consumer game) then they’re more likely to do it.


Retaining customers means keeping them active with you. If you don't, they will slip away and eventually no longer be customers. Promotions encourage this interaction of customers with your company, even if you are just sending out a newsletter or birthday card.

The truth is, almost all customers will leave you eventually whether you are priced out of their market,have suppior competition, or the customer dies. The trick is to keep them active and happy as long as possible, and to make money doing it.

3. Retention Marketing is all about:

Action – Reaction – Feedback – Repeat.

Marketing is a conversation, as the ClueTrain Manifesto and Permission Marketing have pointed out. Marketing with customer data is a highly evolved and valuable conversation, but it has to be back and forth between the marketer and the customer, and you have to LISTEN to what the customer is saying to you.


For example, let's say you look at some average customer behavior. You look at every customer who has made at least 2 purchases, and you calculate the number of days between the first and second purchases. This number is called "latency" - the number of days between two customer events. Perhaps you find it to be 30 days.


Now, look at your One-Time buyers. If a customer has not made a second purchase by 30 days after the first purchase, the customer is not acting like an "average" multi-purchase customer. The customer data is telling you something is wrong, and you should react to it with some type of strategic promotion. This is an example of the data speaking for the customer; you have to learn how to listen.

 4. Retention Marketing requires allocating marketing resources. You have to realize some marketing activities and customers will generate higher profits than others. You can keep your budget flat or shrink it while increasing sales and profits if you continuously allocate more of the budget to highly profitable activities and away from lower profit activities. This doesn't mean you should "get rid" of some customers or treat them poorly.

It means when you have a choice, as you frequently do in marketing, instead of spending the same amount of money on every customer, you spend more on some and less on others. It takes money to make money. Unless you get a huge increase in your budget, where will the money come from?

For example, let's say you have 1,000 customers, and you have an annual budget of $1,000. You spend $1 on each customer each year, and for that $1, you get back $1.10 in profits. That's an ROI of 10%; you got back $1,100 for spending $1,000.

Now, what if you knew spending $2 each year on a certain 50% of customers would bring back $8 in profits? That's a 400% ROI. Where do you get the extra $1? You take it away from the other 50% of customers. You spend the same $1,000 total and you make back 500 (half the customers) x $8 = $4,000.

If you always migrate and reallocate marketing dollars towards higher ROI efforts, profits will grow even as the marketing budget stays flat.


You have to develop a way to allocate resources to the most profitable promotions, deliver them to the right customer at the right time, and not waste time and money on unprofitable promotions and customers.

For more information creating customer loyalty, visit

Good luck, and we look forward to seeing you at the top!