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Part III: The Naked Truth Exposed [Online Buying]

Online Buying...Should We Do It?

by the AutoHook Marketing Team

This particular blog will cover arguably the most controversial topic inundating dealer forums like DealerRefresh and other automotive digital communities. This is the question of the moment, and perhaps the largest generator of both debate and uncertainty creeping up our industry’s horizon.

After AutoHook’s nation-wide survey conducted over the last three months, the top five digital marketing topics dealers currently struggle with were exposed:

  1. [Social]: Does Social sell cars?
  2. [Video]: Video, video, video…tell me more.
  3. [Paid Search, Retargeting & Budgeting]: What should we expect?
  4. [Online Buying]: Should we do it?
  5. [Data & Marketing Attribution]: Who has it and how do we get it?

The first three topics are covered in parts I & II of The Naked Truth Exposed Series. Check them out below:

THE QUESTION OF THE MOMENT: Should I make my vehicles available to buy directly on my website? Is it necessary if I already have a successful brick and mortar store?

So, what did AutoHook’s Naked Truth defenders have to say about online buying at Digital Dealer 21? First, let’s reintroduce our expert panelists and reveal what they shared on this undecided topic.

Alex Jefferson (eCommerce Director, Proctor Dealerships)

“Where online buying is going I don’t necessarily know, but I do know that it did personally have an adverse effect on us when we integrated with the tool.”

The challenge with online buying is there are two very different perspectives on the topic: the consumer’s perspective, and the dealer’s perspective. Proctor Dealerships recently tested an integrated online buying model on their websites over a one-year time period. The tool gave customers the ability to formulate payments, value their trade-in, and complete most of the purchase process online - the overall goal, of course being to save the time consumers spend physically at the dealership. However, what Alex and his team found is that “people are lazy.” They don’t want to take the time (even in the comfort of their home) to navigate through this integrated, lengthy form.

Alex’s advice? What works best for his stores is integrating separate “get your price” buttons, trade-in tools, and finance or credit apps on their sites. It’s three separate forms, but they are quick and easy to fill out. This process also works better for non-tech-savvy customers, and it has been highly effective for Proctor stores specifically. A single buy online method may be too long and too time-consuming for a lot of people, and it can also negatively affect your conversion rates. As a rule of thumb, it's always best to keep online forms as short and straightforward as possible. The easier it is to complete, the higher your conversion rates will be. Alex tells our Naked Truth audience:

“I will tell you after a year of testing it, our lead volume went down by about 30-40%.”

On the contrary, DD21 interview between Chief Editor of DealerRefresh, Jeff Kershner, and CEO of Drive Motors, Aaron Krane disclosed opposing evidence.

DealerRefresh: What is the feedback like from dealership personnel at dealerships offering consumers this option?
Aaron Krane: Dealership staff love that customers who use online checkout will not only sell themselves but also upsell themselves, while the store is closed. That means orders through Drive Motors convert to a sale at over 10-times the rate of leads, and have a higher PVR than many stores’ averages. Moreover, in the words of one dealership, online checkout customers are “ecstatic.”

Kelly McNearney (Senior Automotive Retail Strategist, Google)

 “All I care about is online video.” 

Kelly allowed fellow panelists, Scott Empringham and Alex Jefferson to answer the bulk of this question. However, she made sure to emphasize the role video plays when it comes to showcasing your inventory digitally, as it can nurture the online buying process.

If (or when) buying online becomes mainstream, inventory-specific video will undoubtedly play a role in increasing “buy it now” conversion. Why? Because if customers can virtually touch, feel, see, experience, learn about, and test drive the vehicle in consideration, it’s possible they’ll obtain enough information on its specs and benefits to click that change-driving “buy it now” button.

During her 2-Minute Interview, live at #DD21 with Flash Point’s Scott Empringham, Kelly McNearney shared Google’s #1 tip to help dealers sell more cars, trucks, and SUVs right now. “If I was opening up a dealership today, the first thing I would do is start making YouTube videos, walkarounds, test drives, and features to show people the inventory on my lot.”

Customers aren’t visiting as many dealers as they used to. Google shows consumers visit 1-2 stores before making a purchase. People know what they want before walking into a dealership. New, inventory-focused video merchandising technologies will only further support that fact.

“People want to make decisions at home, on the couch.”

…And Kelly's right! When you think about it, people don’t want to feel pressure from a salesperson to make any life-altering decisions on the spot. A vehicle purchase is the second largest purchase consumers make after buying a home. There is a lot of emotion, stress, time, money, and energy that goes into their decision that dealers don’t always recognize or acknowledge.   

Scott Empringham (CEO/President, Flash Point Communications)

“I don’t think it’s a question of is it going to happen, it is happening. If you’ve got your fundamentals down, and that’s something you want to experiment with, I say go for it!”

Scott does caution if you haven’t first mastered the fundamentals (things like digital merchandising, relevant photos and videos, a high converting site, simple, high converting forms, etc.) jumping into online buying can be a waste.

Asbury Automotive Group for example, rolled out online buying across their stores, and other large progressive groups like AutoNation and Penske have done the same. Asbury is a Flash Point client with a huge digital marketing team, and they successfully participate in an online buying model today. However, the vast majority of Flash Point customers don’t necessarily have the resources Asbury and similar groups have to make this system work.

Brands like Honda, Toyota, Ford, Chevy – those are value-buy vehicles. People want and need to physically sit in the car to determine if it’s right for them. On the contrary, when it comes to aspirational brands like Maserati or Lamborghini, or someone who collects cars as a hobby, people would be more likely to buy these types of cars online. Obviously, Tesla has been doing it successfully for years.

At this time, the best answer experts can provide, when it comes to whether or not dealers need a buy it now button is…it depends. There are stores that have been successful with it, and there are stores that have not been successful with it. The key is to have your ducks in a row (or in other words, a website that converts at a high rate) before rolling out a nation-wide online buying program.

Bill Playford, VP & Partner of DealerKnows Consulting called out the topic in his June 2016 DealerRefresh article, Buy it NOW! The Button that Drives Change.

“I know this is giving some of you heart palpitations, but it’s once again that time to rethink the way we approach our customers. Not everyone will want to utilize a Buy It Now button. But, by not incorporating it into your process, you are disenfranchising a segment of your population who would click this and purchase almost 100% online.”

The key consideration with online buying, and with your dealer operations in general, is going above and beyond to make things convenient for your customers. Make your end model fast and easy. If you can manage one platform great! If not, do everything you can to make your process smoother on the customer's behalf. Build a loyal customer base now, because you never know - they could be buying their future car from you, right off your website.

A huge thank you goes out to DealerRefresh & Flash Point for capturing all the Naked Truth magic live on Facebook. Click here to watch the recording!

For additional resources or information from our panelists, visit DriveAutoHook.com/NakedTruth.

 

The Mobile Tipping Point

By David Metter

For those of you who have never heard of the phrase tipping point, there are a lot of variations in terms of a definition - depending on who’s asking. To physicists, the tipping point is when an object gains enough nuclear material to sustain a chain reaction at a constant rate. To computing geeks/experts, “The tipping point is the critical point in an evolving situation that leads to a new and irreversible development.” To a “car guy” it could be when a customer walks into your showroom five minutes before closing time on a Saturday. We have all had a few of those. According to TechTarget, marketers define the tipping point as “a threshold that, once reached, will result in additional sales.”

No matter how you look at it, the concept is so profound that it will forever define the current state of mobile marketing in both the physical and digital automotive worlds. One of the reasons mobile has caused such upheaval in our society is because both smartphones and tablets are so incredibly personal to each individual user. In fact, Tune dictates the smartphone as the single most personal device, ever. “Because of that, it is the everything device: the communicating, the gaming, the learning, the buying, the reading, the watching, the tracking, the remote controlling device.”

Consumers are now spending more time playing on these intelligent little microcomputers than they spend watching television. In a recent eBook from Tune Marketing, they provide insights into the international mobile economy, showing mobile usage trends to be nearly equivalent in most countries. Globally, in 2015 alone, 800 million people bought their first smartphone. It is predicted that by 2020, there will be 6.5 billion smartphone users. That’s 6.5 billion people to market to. It’s also 6.5 billion opportunities to make a connection, or 6.5 billion chances to get buried in mobile white noise – depending on how you look at it.

The mobile tipping point is not just starting to make its way through the airwaves. It has arrived, and I cannot stress that enough. These short but abundant interactions are what Google refers to as “Micro-Moments.” Mobile touch points in the consumer’s journey have become so powerful, that they will actually interrupt a person from following through with a given task. Google says 91% of smartphone users turn to their phones for ideas right in the middle of a task. Talk about a distracted generation!

Mobile has become a tipping point because it has the power to claim our attention at any given time and place. Mobile takes no mercy, and it doesn’t apologize for being rude when it interrupts your dinner, your date, your family time, or your purchase decisions.

The most important fact to remember is that while mobile usage is continuously increasing, the time consumers spend during each micro-moment is actually decreasing, meaning your chances of making an impact are smaller, and your window of opportunity is much shorter.

During this Sunday’s Super Bowl 50, Google leveraged Adometry TV Attribution technology and found 82% of game-driven ad searches were to no one’s surprise, conducted on a mobile device (a 12% increase since last year’s game). Furthermore, out of the ten brands that drove the highest search volumes, five of them were either OEMs or vehicle brands – so as an industry, we have to be doing something right!

There’s no denying it. Mobile has forever changed the way marketers interact and reach consumers. We’re all slaves to it. The swiping, the scrolling, the click-to-call-ing, the convenience. In so many ways the mobile experience dictates not only where our marketing should be, but also the entire advancement of communication as we know it. My friends, the mobile tipping point is here.  

Check out our Mobile eBook for more ways to master mobile in the year ahead. 

A Primer on Mobile Wallets and How Dealers Can Benefit From Them

By David Metter

If you have a smartphone, chances are you have Apple Wallet (formerly Passbook) or Google Wallet. These applications are mobile wallets that store, among other things, applications like Apple Pay that enable people to purchase things with their phones. Of course, it's very unlikely that anybody is going to purchase their vehicle by swiping their mobile device. For that reason, many dealers dismiss the notion that they need to know anything about mobile wallets.

However, mobile wallets are used for a lot more than just purchasing things. A mobile wallet is the digital equivalent to the physical wallets we carry in our pockets and purses. They can be used to store many things including drivers' licenses, social security cards, payment cards, login data for websites and loyalty cards. Mobile wallets are also used to store gift cards, coupons and authentication codes for boarding passes, public transport tickets, movie and sporting event tickets, and house and car keys.

For dealerships, the "keys" to getting your brand inside of a consumer's mobile wallet include loyalty cards, mobile advertising, coupons and special offers. The good news is, once you're in there you're likely to stay there, and your digital passcode can be easily updated so you can send customers push notifications offering them new coupons and specials.

Although mobile wallet usage is not yet mainstream, familiarity and usage have doubled since 2013, according to a recent study published by market research and consulting firm Chadwick Martin Bailey (CMB). Fifteen percent of respondents reported using a mobile wallet in the first half of 2015 and an additional 22 percent said they're likely to use it in the coming six months. If that's true, over one-third of consumers are now using their mobile wallets, at least on occasion.

This growing usage presents significant marketing opportunities for dealerships. Mobile wallets provide the perfect post-click destination for coupons, gift cards and incentives. Here are several ways that dealerships can leverage mobile wallets to ensure that your brand stays top-of-mind with consumers:

Digital Advertising

Early in 2015, Honda promoted its nationwide Honda Dream Garage Sales Event through a mobile wallet ad campaign that invited consumers to tap a banner ad and save the event to Apple’s Passbook (now Wallet) or Google Wallet. The mobile ads ran on ESPN.com, Allrecipes.com and the Washington Times. Once consumers stored the event, Honda sent reminders to them as the event date got closer. Individual dealerships could easily replicate this strategy.  

Normal mobile ad campaigns can be forgotten soon after they are over. Mobile wallet marketing campaigns can be instantly updated to stay relevant to your customers' needs. Once your dealership has a digital passcode or "pass" into a customer's wallet, it's easy to push out reminders for a new promotion, much like Starbucks does.

Social Media and Mobile Apps

According to research firm Forrester, smartphone owners spend 80 percent of their time in five apps: Facebook, Maps, YouTube, Pandora and Gmail. For dealerships that advertise on Facebook, the growing adoption of mobile wallets will almost certainly result in higher click-through and redemption rates of Facebook ads. Here's why:

When a consumer is sitting at home or at work and surfing Facebook, they may see your dealership's coupon or offer, but may decide not to redeem it because they don't anticipate an immediate need, or they may forget about it as they continue to read their friends' updates. That consumer may remember later on, but the thought of having to go back to find and retrieve the offer or coupon is sometimes just enough of a deterrent that it doesn't happen.

When a consumer is checking Facebook with their mobile device, storing coupons and offers is a snap: just click on the ad or offer, click on a button that says "Add" and their mobile wallet stores the coupon or offer for future use. This makes it easy to store and organize a nearly endless supply of coupons and offers.

According to Vibes, a mobile wallet-marketing firm, 70 percent of consumers will save an offer to a mobile wallet when presented with the option and these offers have a 64 percent higher conversion rate over static mobile web coupons.

Location Targeting/Geo-Fencing

When a consumer stores a coupon, offer or event in their mobile wallet, your dealership has the ability to "ping" that customer when they enter a pre-defined area near your store. So if they stored information about your sales event and then drive by your dealership on the day of the event, they will receive a notification reminding them about the event. Or, if a consumer has stored a service coupon your dealership can send them a push notification reminding them about the coupon when that customer is within a one-mile radius of your store.

Loyalty Cards

This summer Apple confirmed it is bringing loyalty programs to Apple Pay, starting with retailers like Kohl's, Walgreens, JCPenney and Dunkin' Donuts. Could auto manufacturers be far behind? The ability to link a stored loyalty card to a local dealership's coupon, combined with the ability to notify customers about new offers, may create the "perfect storm" of incentives that will drive customers to your store.

Last year about this time, 2015 was being hailed as the year of the "mobile tsunami."  I predict the next wave in 2016 will be the "mobile wallet tsunami." Innovative dealerships will be experimenting with digital advertising campaigns, social media ads and loyalty card programs. The goal is to get into the consumer's mobile wallet, which in effect gives your dealership permission to continue sending that consumer offers, coupons and gift card incentives.

A word of warning: this privilege should not be abused by sending out a continuous stream of push notifications and sales messaging. Instead, the mobile wallet should be viewed as a vehicle for building a long-term relationship with the customers that literally opened their wallet to let your dealership brand in.

Putting Showrooming In Perspective

As a husband and father to 5 daughters, the cartoon above is, at times, a pretty accurate description of my life. I’m sure all men in similar situations have found that couch or chair  they inevitably get placed in while the females in their lives try on shoes, clothes or whatever they may need.  In reality, I shop more than my wife and kids… they just don't go with me.  

But the real reason it caught my attention is that it is such a great illustration of a somewhat new “challenge” that has hit the retail world, and one that I work to help many dealers with – showrooming. I talk about showrooming and how it is affecting dealerships a lot – but sometimes the concept itself doesn’t sink in. Perhaps it’s because customers aren’t as direct as the lady in the cartoon. Maybe some dealers just don’t see customers using their smartphones to compare prices while still sitting right in the showroom, or out on the lot. But I guarantee you it is happening all the time. In fact, over 60 percent of customers visiting an auto dealer's lot will use their smartphones to simultaneously shop the competition. And two thirds of those will leave that dealership and visit another store within a day. This is showrooming

This cartoon perfectly illustrates the concept. No doubt you’ve comparison priced items at one point – whether that was a television, refrigerator, or even just a book. All of us want a good deal. Amazon makes it very easy with their app. All you have to do is scan a bar code and you’ll have the online price. There are other apps that will even show you the prices at multiple stores.

I have no doubt that some entrepreneur will someday create an app that will allow car shoppers to accomplish a similar result simply by using their phone to scan a VIN. Heck, we have already built our solution to incentivize a customer  and allow them to text our dealer while sitting in a competitive dealership.  

This is what’s happening in retail on a daily basis – and has been for a while now. Consumers are realizing that they can price shop a car dealership just as easily as can shop for anything else. And that’s why it’s important to find ways to keep that customer in your dealership. And, if you feel even more enterprising, find an effective way to lure the customer shopping your inventory while at your competitor, into YOUR showroom, and away from theirs.

“How Showrooming is Changing the Way Auto Dealers Sell Cars” at #DMSC15

Our own David Metter will be a featured speaker at the next DMSC/ Digital Marketing Strategies Conference, to be held April 12-14, 2015, at the Napa Valley Marriott Resort & Spa.

David’s workshop, titled “How Showrooming is Changing the Way Auto Dealers Sell Cars,” will discuss how over 60 percent of customer’s visiting an auto dealer’s lot will use their smartphones to simultaneously shop the competition. Two thirds will then leave that dealership and visit another store within a day.

More than ever, dealers need an effective mobile strategy. Below include the full press release with more information on David Metter, his presentation, and DMSC15…

 

New York, NY— April 8, 2015 – HookLogic, the global leader in commerce search advertising and premium provider of lead-generating incentive solutions for automotive dealers, today announced that David Metter, President of Automotive for HookLogic, will be a featured speaker at the Digital Marketing Strategies Conference, to be held April 12-14, 2015, at the Napa Valley Marriott Resort & Spa.

Metter’s workshop, titled “How Showrooming is Changing the Way Auto Dealers Sell Cars,” will discuss how over 60 percent of customer’s visiting an auto dealer’s lot will use their smartphones to simultaneously shop the competition. Two thirds will then leave that dealership and visit another store within a day. This is called showrooming. More than ever, dealers need an effective mobile strategy. The workshop will be held at 10 am, Monday, April 13, and will provide dealers with key information necessary to create a highly successful, measureable mobile strategy.

Metter has a wealth of automotive knowledge and experience, both from a dealer and service provider perspective. Prior to joining HookLogic, Metter served more than six years as Chief Marketing Officer for MileOne Automotive, a large, privately held automotive dealership group. At MileOne, he built an industry-leading marketing organization, leveraging technology and the internet to increase market share, while dramatically decreasing advertising spend per vehicle sold.  Metter previously headed sales for Autobase for nearly 5 years, where he helped grow the company from a small start-up to the leading automotive CRM software vendor.

He began his career on showroom floor and, as an early adopter of technology, built a prospecting and follow-up system that helped him rise to become one of the top Chrysler salesmen in the country. He moved his way up, eventually to General Manager of a dealership. Metter is regarded as one of the foremost experts in the automotive marketing and e-commerce space and is a frequent speaker at industry events including Digital Dealer, the Global Automotive Conference, NADA, 20 Groups, and JD Power’s Automotive Internet Roundtable.

As President of Automotive for HookLogic, Meter leads strategy, product, sales, and marketing for the industry leading provider.  As the co-architect of the product suite, he works with OEM’s, agencies, vendor partners, and dealers to increase lead conversion, showroom visits, sales attribution, and brand Loyalty & Conquest rate.

The AutoHook suite of products by HookLogic provides the ultimate attribution model in auto. It drives more in-market shoppers into a dealership by offering time-sensitive, high-value hooks. The AutoHook Suite of Solutions includes: Web2Show, a tool that converts traffic from the dealer’s website into more showroom visitors. Prospects that visit the dealer’s site are invited to choose a free gift, redeemable by visiting their showroom. Lead2Show, a tool that maximizes the dealers 3rd party leads using scoring via data partners, such as Polk and Dataium, to immediately identify the highest intent to buy customers. And the newly released Mobile2Show, a best in class mobile targeting and showrooming solution. Mobile2Show targets competitive dealership/brands in the mobile environment, both on the dealer’s site as well as other local and regional sites, and drives prospects away from competitors and into the dealership’s showroom.

For more information or to schedule a demonstration any of the AutoHook Suite of products, visit: http://www6.hooklogic.com/autodemo,or call, 855-lead-2-show (855-532-3274).