| by David Metter, President of AutoHook powered by Urban Science
In Part I of Lies the Digital Age Told You About Selling Cars, we overturned one of the most blindly accepted industry-wide standards about the current state of consumer car buying behavior. For far too long, the assumption has been vehicle shoppers have everything they need to make a purchase decision online, and they already know what they’re buying before ever stepping foot in a showroom. The common misconception has been that the average consumer in the digital age only visits one dealership before purchasing a vehicle.
What we found after surveying 2,748 U.S. consumers that have purchased a car in the last year is that the above statement couldn’t be further from the truth. In reality, not only does the average customer visit at least 2.4 dealerships before making a buying decision, but almost half – 46% – said they visited three or more dealers before purchasing. Over a quarter of our sample size, 26%, said they visited four or more dealerships before buying. All of this data was collected by AutoHook and Urban Science in May of 2018 from people who purchased or leased a vehicle within the last year – not from a published study conducted five years ago.
As a former general manager of a dealership, CMO of a privately-held dealer group and as a marketer in general, I found the fact that roughly 1 in 4 people (26%) in the year 2018 visit four or more dealerships before buying a car to be personally absurd. Though surprising, this statistic solidified a new truth about the state of our industry. Contrary to what dealers have been told, the in-store experience is arguably more important in the digital age than ever before in the history of the car business – and for several reasons.
The most prominent reason being if a customer has a bad experience with one of your salespeople when they come in for a test drive, they will leave and buy from someone else. If they go to two dealerships and have a bad experience at both, they will go to a third and even a fourth dealer to buy from the one that provides them with the experience they expect and deserve.
Just like everything else that has surfaced from the digital age, car shoppers have a LOT of choices when it comes to what they’re going to buy and who they’re going to buy from. Purchase decisions are still made at physical dealerships, most likely following a test drive – NOT exclusively online. Shoppers in-market for a new vehicle don’t have their minds made up about what they’re going to buy by the time they visit their first dealership. Outsell says 6 out of 10 car shoppers enter the market unsure of what they want to buy. Our own research and survey data consistently shows 78% of people are still considering multiple brands by the time they visit their first dealership.
So we as an industry, we HAVE to get this right. Instead of operating based on pure, often biased assumption, dealers need to seriously reconsider their order of priorities in terms of how they run their business and where they spend their money. The digital age has armed us with so much intellectual power, yet at the same time, it’s made us a little lazy. It’s cast a shadow over what’s really important – defining value and personal worth by likes, clicks and follows rather than interpersonal relationship skills.
Part II of Lies the Digital Age Told You About Selling Cars verified the auto industry has become too quick to rely on technology as a crutch to do the work for us, rather than picking up the phone and having a conversation - or dare I suggest having the inventory knowledge and social skills to not only sell a car, but to foster ongoing relationships that lead to repeat, loyal customers. It is officially time for a new dialogue to emerge. The question we as an industry need to be asking is not how can we leverage new technologies to help us sell cars, but how can we leverage new technologies to help our salespeople sell cars?
Rather than answering the above question based on my expertise and years of experience in this business, I’ll share the real-life success stories of how two actual dealerships in the digital age are using great data processed through great technology to help their people sell more cars and lose fewer opportunities.
One of our dealer clients needed an accurate way to measure the true effectiveness of their follow-up process by knowing what was and wasn’t working within their current lead mix as well as how many opportunities their salespeople sold compared to how many they lost to competitors. Using their individual salesperson data, we analyzed each person’s sales and defections and identified who had the most potential to improve. We then pinpointed the time frame during their follow-up process when their people struggled the most, which for this particular store was during days 0-4 after a lead hit their CRM. Lastly, we exposed their highest defecting lead source.
Armed with a roadmap highlighting their greatest areas of opportunity, the owner of this dealership shared this data with his sales staff and reviewed each person’s sales and defection trends with them one-on-one every month. He created an environment of transparency and friendly competition by making this defection analysis technology available to all his salespeople, thus holding them personally accountable for every sale they lost in addition to what they closed.
The dealer then helped his staff implement a more aggressive follow-up strategy for working leads 0-4 days old. He provided additional training on how to better work leads that came from their highest defecting source (especially during this time frame). He took the time to listen to feedback from all his salespeople and found opportunities for peer coaching to help further reduce their collective number of defections. He also implemented a system to reward the people who showed improvement each month.
With a refined follow-up strategy fueled by better prepared, more empowered salespeople, they saw the following results in just 90 days:
Their overall defections decreased by 89%, with a 44% decrease in defections specifically during days 0-4 post-lead.
They increased their number of closed sales tied to their highest defecting lead source by an astounding 242%.
Most importantly, when it came to the salesperson identified as having the highest defection rate, that individual successfully increased their closed sales by 78% and went from being the worst performer on the team to one of their top performers.
This store needed a way to identify any potential problems with their lead mix to see which sources were underperforming and why. Using the same defection analysis technology as Dealer #1, they were able to determine the issues they were having with their highest defecting lead source were due to external factors outside of their control – rather than a lack of effective internal follow-up. They then confidently decided to cancel this lead provider and put those marketing dollars back towards their bottom line.
Ninety days later, they saw a 61% average increase in salesperson performance after removing that lead source – not to mention they were able to free up a total of 40 man-hours per week that were previously devoted to working those high-defecting leads. The best result of all? Four of their salespeople went from being average or below average performers to their TOP FOUR salespeople.
And they didn’t stop there. This dealer applied the same technology to define which model(s) in their inventory represented the most defections specific to their salespeople so they could go after leads tied to underperforming models more aggressively. Model A represented the most opportunity for improvement, and again within 90 days, they increased closed sales specific to Model A by 51% and reduced defections by 30%.
What we can conclude from the examples listed above, is that technology can help your people in a multitude of ways. Technology can help your salespeople close more deals and reduce their defection rates. Technology can help your people free up wasted time chasing leads from a faulty source. Technology can identify which models your people struggle with the most in order to boost specific model performance. Technology can even tell you if your customers are leaving your store to buy the same model somewhere else, or if they’re defecting to another brand entirely.
But the most important thing to take away is that technology in the digital age still doesn’t sell cars. It can do a lot to light up the right track for your people to do just that, but at the end of the day your salespeople need to know your inventory like the back of their hand – what makes it better than competing brands or models, and what makes doing business with you a better option than anywhere else.
The truth in a current landscape littered with lies is that there’s no way for any one dealer to know everything they need to know about their overall market, which models represent the most opportunity for their store, and if their salespeople are doing their jobs and following up with leads appropriately. That’s where the technology and data come into play. With a complete view of who is struggling and exactly what they’re struggling with during the initial contact and follow-up process, dealers can take immediate action to help their salespeople reduce defections and improve their performance across all facets of their sales operations – so they can be one of the 2.4 dealerships (at least) with a shot of winning the sale.
| by David Metter, President of AutoHook powered by Urban Science
I’d like to begin with a subtle reminder of the harsh reality of how car shoppers in today’s technology-first world really feel about the car buying process. Below are a few highlights to help paint the picture…
52% of car shoppers feel anxious or uncomfortable at dealerships and millennials are leading the pack in their dislike, with 56% saying they’d rather clean their homes than negotiate with a car dealer. (The Harris Poll Insights & Analytics)
“Stressed,” “overwhelmed,” “taken advantage” and “panic” were among the top 10 words used by female car shoppers when reviewing their in-dealership experience. (CDK Global)
Studies suggest that some Americans would rather get a root canal than take their car to a dealership. (Automotive News)
I could go on for days with stats like this, but we have more important things to discuss - such as how to change the current perception. The upside to all the negativity around car buying is that we have A LOT of room for improvement. And dealers aren’t necessarily to blame either. The problem is, what we’re told about consumer behavior in the digital age compared to what car buyers themselves actually do in the digital age are often two very different things.
We live in a constantly connected, convenience-based universe inundated with unsanctioned opinion and as a result, we’ve become conditioned to rely on technology to solve problems. We know the in-store experience is important, but we’re too fast to look to the latest technology to solve the problem rather than focusing on what we can actually control. Not just something dealers have the power to influence, but also something that may ultimately yield the highest ROI out of any available technology in the market…which is your salespeople. How did I come to that conclusion? Funny you should ask.
In the article, “What’s the REAL Cost of a Bad Salesperson?” I dissected the monetary difference between what good salespeople can contribute to your dealership over time versus what just one bad salesperson could cost you. A salesperson selling 15 cars a month yields about $270,000 a year in gross profit. Then when you factor in the lifecycle of the vehicle and any potential service revenue associated, you’re looking at a minimum value of $325,000 a year in pure gross profit for any one good salesperson. Read the blog if you don’t believe the numbers.
Now consider the reverse. One salesperson that loses 15 sales a month to one of your competitors is costing your dealership $325,000 a year in gross profit. Multiply that by just four people and you’re looking at $1.3 million in lost gross profit a year. But here’s the kicker. Without the right data processed through the right technology, you would have no way of knowing how many customers your salespeople interacted with that left and bought a car from someone else. Perhaps due to a negative experience?
A recent study from Cox Automotive suggests that initial experience may be more important today than ever before. The rate of car buyers returning to dealerships where they have previously purchased or leased from is increasing. 40% of new vehicle buyers in 2018 are repeat dealer customers compared to 31% in 2016. This is great news, but it puts even more pressure on getting it right for that first-time buying experience and, in most cases, your sales team is directly responsible for it. Customer loyalty and the chance of them coming back to buy a second or third car depends on the experience your dealership provides them with upon arrival. So your people better be armed and ready.
Jeremy Beaver, COO of Del Grande Dealer Group, told Automotive News, “Retention is the Holy Grail, and the experience is what drives retention. You have to shift away from a ‘visit’ mentality and think about a ‘lifetime value’ mentality.” I could not possibly have said it better myself. This is an example of a dealer that just GETS IT – both on the sales side and on the service side. Their Fixed Operations Director, Trully Williams said, “The technology enhances the experience, but you start with the fundamentals of people and process. You get those right and then add the technology.”
There is a seriously infinite amount of opportunity for improving your dealership’s operational process, and it starts with your people. Dealers don’t have time to guess who their good and bad salespeople are – that’s where the technology comes in. You can’t retain good salespeople if you don’t have the technology to know who they are. The right technology can tell you who is letting the most opportunities walk out the door. It can tell you which leads your people are struggling with and the exact time frame during the month they struggle with the most. There’s a lot technology can do to help your people and to enhance the car buying experience, but it can’t drive the car buying experience entirely. At least not before flying cars become a thing.
So before your brain explodes from all the numbers and reporting being thrown at you during any given moment, or from all the external pressure you’re getting to improve 50 different KPIs at the same time, remember that your people are what gives meaning to the metrics. Retention, should be your absolute number one focus and priority in the digital age – and that applies to both your salespeople AND your customers. Running a successful dealership ultimately translates to retaining good salespeople, but you need the help of good technology to be able to do that. Ironic, I know.
Stay tuned for the upcoming fourth and final chapter of Lies the Digital Age Told You About Selling Cars: The Executive Edition. Dealer Managers will learn real-life examples of how to apply new technologies to directly support the success of your salespeople instead of relying on technology to do the selling for them. The more you can do to help your employees be successful at your dealership, the more likely you are to retain them, which ultimately leads to everyone’s mutual benefit – not to mention the benefit of your bottom line.
| by David Metter
If you think good salespeople are expensive, try bad salespeople. In 2017 alone, dealership employee wages totaled over $66 billion and “auto retail continues to boast one of the highest average salaries of any industry,” according to NADA’s annual report. Combine infamously high turnover rates with a decently-compensated workforce, and I’d argue the ACTUAL cost of a bad salesperson in the car business is a lot more than you think. As someone who spent my first seven years at a dealership on the selling floor, I was always frustrated when it seemed like our comp plans served the worst salespeople, not the best ones.
To attach a dollar amount to what a bad salesperson could be costing your dealership, we first have to define the value of a good salesperson by doing some simple math. According to Automotive News, last year’s average retail gross profit per new vehicle sold was just over $2,000. Let’s call it $1,500 to be on the conservative side. So, a good salesperson selling 15 cars a month at an average gross profit of $1,500 a car is generating $22,500 in gross profit a month for your dealership, or $270,000 a year.
But that’s really not their true value, and this is why…
A salesperson selling 15 new cars a month equates to 180 customers a year. Then you have to factor in the lifecycle of the vehicle and the potential service revenue associated. Let’s say out of those 180 customers, half of them serviced with you. And, of those 90, each returned for service five times over the car’s lifespan. That’s a total of 450 service visits. According to Urban Science, the cost of an average service RO is $128.88. Do the math, then add it to the gross profit and you get $327,996. (My math is below for anyone in question).
· 450 Service Visits x $128.88/RO = $57,996 + $270,000 = $327,996
So in reality, for a year’s worth of customers, we’re talking a value of over $325,000.
That number sets the stage for what a bad salesperson could be costing you – because you can apply the same logic to 15 lost sales, or defections to competing dealers. If you have someone you think is one of your top performers selling 15 cars a month, but they lost 20 quality opportunities, that’s the equivalent of $30,000 a month, or $360,000 a year in LOST profit. Are you willing to lose a third of a million dollars from employing just one faulty salesperson?
If that cost isn’t enough for concern, there’s also the fact that there could be multiple people under your rooftop disguised as your “best” performers. But when you overlay all the opportunities they touched that we know defected – or purchased from a competitor – on top of what they sold, the story shifts and their actual sales effectiveness comes into focus.
The takeaway here is it’s not just about the 20 cars you could have sold. It’s about the dollars attached to those sales and the potential future profit in service revenue and repeat buyers. We all know the closing ratio on a customer is higher if they’ve already purchased from you. Selling a second and third car to someone who already knows and trusts you is a lot easier than selling the first. It becomes easy to watch the total worth of a single good salesperson exponentially expand when you know their number of closed opportunities consistently exceeds what they’re losing – but you need that defection data to get the REAL story.
3 Steps to Reduce Lost Sales
by David Metter
1. Use Data That Tells a Complete Story
The only way to know exactly where you stand in your market is to have a clear view of what you’re losing. The problem the automotive industry has faced for years now, is that both CRM and DMS data is one-sided, one-dimensional, and only shows your effectiveness against your own sales. But what about the sales of competing dealers or brands in your market? Wouldn’t it be easier to grow your market share if you knew what percentage of it you actually owned compared to your top competitors?
The other problem exists within the reporting provided by some third party vendors, as these reports only show you one side of the story – their side. In other words, what you’re winning. If you think about it, what is the most vital piece of information to have in terms of improving your dealership’s sales operations? Is it how many clicks your VDPs got or is it how many actual vehicles you sold…or didn’t sell? You be the judge.
2. Accurately Quantify Your Lost Sales Opportunities
What if you could know which dealerships you’re losing sales to? How many units per day or per month are you losing to competitors? How many of your customers purchased from competing dealers or brands in your market?
It is critical for dealers to not only look at their own data and sales and defection trends, but also the sales trends of their biggest competitors. Know where you stand. If you have a clear view of what and how much you’re losing, then you have a clear view of what you need to win back.
3. Identify the Source of Lost Sales & Adjust Accordingly
There are several factors that play into each and every lost sale. What dealers need is the ability to recognize if sales are lost due to internal or external factors. For example, is there an internal problem with your sales staff or with a specific salesperson? Are your lost opportunities tied to a certain model? Or, is it an external problem such as one of your lead providers consistently delivering leads that are no longer in consideration? Look into your website traffic and the traffic providers you work with. Are these sources driving low-funnel buyers to your showroom, and can they prove it?
If you don’t know the answer to that question, it’s because you’re not seeing the full picture. You can’t fix a problem if you don’t know the problem exists. Similarly, you can’t make smarter decisions with your marketing budget if you don’t know which sources are driving bad traffic or causing high defection rates.
Now that we’ve identified all these potential problem areas, allow me to leave you with the light at the end of the tunnel. The good news is that the tools and data needed to complete the story of your market’s sales trends already exist. I know this because I’ve been on both sides of the equation. I’ve worked as the CMO of a large dealer group, and I’m currently on the vendor side of the car business. Therefore, I can say with confidence that attempting to grow your market share without a complete view of your market in today’s complex landscape is asinine. I can also say based on factual, proven stats that Urban Science has the fastest, most accurate sales match data in existence. So at the end of the day, you can go with your gut, or you can go with prescriptive science-based conviction. (I suggest the latter).
To learn more about identifying and eliminating lost sales, visit DriveAutoHook.com/TCA.
A YEAR IN REVIEW: a look back at the top automotive marketing trends of 2016...and a sneak peek into 2017
Much like the state of the automotive industry over the last year, AutoHook, powered by Urban Science has withstood and conquered unprecedented change throughout 2016. As experts in digital adaptation, AutoHook is consistently on the forefront of the latest trends in digital marketing and data solutions. Below is our recap of the top 12 headlines from the last 12 months in the automotive space. You'll also get a snapshot of how to "disrupt before you get disrupted" as we kick off 2017.
1. THE MOBILE TIPPING POINT
We all knew it was coming, but the speed at which mobile usage has overtaken desktop has been exceptionally faster than any other digital shift in our history. As featured in AutoHook's February article conveniently titled, The Mobile Tipping Point, "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."
2. NATURAL DISASTERS STRIKE DEALERSHIPS ACROSS THE U.S.
Mississippi River Flooding
The residents of Missouri and Illinois had a rough start to 2016 after the detrimental flooding of the Mississippi River and other waterways spanning the two states. In some areas, more than two feet of rain graced the Midwest with its presence, resulting in over 25 deaths and thousands forced from their homes in freezing temperatures. (As featured in How Dealerships Can Stay Afloat in the Aftermath of Natural Disasters).
Winter Storm Jonas Hits East Coast
Automotive News reported the “Jonas Effect” forced Toyota to temporarily close 200 of its dealerships. Herb Gordon Volvo, in Silver Spring, Maryland experienced a roof collapse due to the overly dense snow. Forbes noted auto sales were better than expected in January despite the harsh weather conditions. "Sales actually managed a small increase in January according to J.D. Power and LMC Automotive.
“It’s not just hurricanes. Any natural disaster, such as an earthquake, can cripple a dealership. There need to be provisions for natural disasters in areas susceptible to them.” - Mitch Phillips, Global Director of Data, Urban Science
3. GOOGLE'S SERP CHANGE
Google has bulletproof adaptation skills. They seek out disturbances within the digital space and adjust accordingly. Due to the fact that mobile searches have now surpassed desktop, Google altered the layout of their search engine results pages (SERPs) to better align with mobile’s responsive design. In February 2016 they stopped displaying paid ads on the right side of SERPs. (Content originally featured in AutoHook's latest eBook, Adapt or Die: The Auto Dealer's Digital Adaptation Survival Guide).
4. RISING PAID SEARCH COMPETITION
What does this mean for dealers? For starters, a huge potential for increased SEM costs and more competition for top ad ranking. Search Engine Land analyzed the results of Google’s most recent adaptability demonstration: “Looking at the median change from February 8 through March 16 (2016) for a sample of advertisers year over year, we find that first-page minimum bids continue to increase steadily since the removal of right rail text ads.”
5. THE CLICK-TO-CONVERSION SHIFT
"If you start with conversion first and foremost, the thousands of dollars you spend driving traffic to your site each month will actually be validated. eMarketer reported $61.5 billion will be spent on search and display alone in 2016. If the majority of your digital ad budget goes into SEM and banner ads that drive shoppers to your website, but you don’t first ensure your site has the ability to convert at a high rate, you are willingly throwing money in the garbage. It’s like throwing a pitch to home plate without a catcher. It just doesn’t make any sense." - David Metter, President, AutoHook Powered by Urban Science
6. OMNICHANNEL MARKETING BECOMES A MUST-HAVE APPROACH
Omnichannel shoppers are the most valuable to your business. When both your dealership's in-store and digital efforts communicate and work together, it creates an ideal shopping environment resulting in customer loyalty. IBM’s recent whitepaper states, “The most sophisticated retailers are enabling customers to convert on any channel. After all, shoppers who buy in-store and online have a 30% higher lifetime value than those who shop using only one channel.”
7. VIDEO, VIDEO, VIDEO...& MORE VIDEO
Scott Empringham, CEO of Flash Point Communications joined AutoHook's panel "The Naked Truth" at Digital Dealer 21 this past August. His advice? Video is the #1 driver of consideration for new vehicles. Scott recommends dealers create 90-second videos just using their iPhone to post on social channels. “If you’re looking for a vehicle, you probably want a good look at the vehicle. Include shots of the vehicle’s exterior, interior, features and benefits.” 90-second videos have been enormously successful for Flash Point and their clients.
Fellow panelist, Kelly McNearney, Google's Senior Automotive Strategist could not agree more! Kelly says, “All I care about is online video. It’s great because you don’t need to customize your content for each individual channel, you can run the same video across platforms.”
8. ONLINE BUYING: ARE WE THERE YET?
The article, 5 Reasons Online Buying is NOT Everyone's Reality highlights the results of DealerSocket's 2016 Dealership Action Report. “While there is a segment of car shoppers who want to buy vehicles online in an Amazon-like experience, a new report indicates dealers may be overestimating how strong consumer demand for this capability really is.”
9. DEALERS AGREE, PAID SOCIAL ADS DO IN FACT SELL CARS
In 2016, the industry determined that social ads really do sell cars, and we heard it straight from dealers themselves! In Part I of our Naked Truth Exposed series, Alex Jefferson, eCommerce Director of Proctor Dealerships said, "Social media DOES in fact sell cars. Social outlets give us the power to build quality relationships, which then translate into quality website traffic. As long as your website converts, BOOM you can sell cars through social!"
Kevin Frye, eCommerce Director of the Jeff Wyler Automotive Family also presented at #DD21 with his session, Have You Lost Your Mind? The Demise of Common Sense in Automotive. Frye asked the question, “Can you track ROI with social media?” In his DealerRefresh recap he confirmed, "The answer is yes! I excited many dealers a few conferences back when I showed how they could build attribution models and see for themselves how they could track a return for their social media efforts."
Scott Empringham, also reminds dealers to hold their social media companies accountable. In his October blog, Empringham states, "While traditional media offer varying levels of accountability, social media (especially Facebook) is off the charts regarding accountability and transparency. In fact, it’s more accountable than the previous champion, direct mail, with only 20% of the cost."
10. DATA SHARING ACROSS ALL AUTOMOTIVE TIERS
AutoHook is doing our part to build one, solidified automotive railroad system by opening our API, and the sales validation data that comes with it, to all vendors – free of charge. In an industry where everyone charges to be connected, we want to be the player not to charge so that we can make stronger connections.
By adopting Apple’s open app approach, we can then simplify and unravel a very complicated subject. A subject that is perhaps the one absolute in an industry inundated with ambiguous topics like “big data” and “attribution.” Backed by near-real-time sales data from Urban Science, AutoHook has actually built an attribution engine that validates without a doubt that our solutions led directly to a sale. Sharing this type of knowledge is the one thing that could change this industry for the better. Having access to both accurate and up-to-date sales attribution data will make every decision this industry makes smarter, every solution more efficient, and every dollar we spend go further. Now THAT is something to get excited about!
11. DMPS TAKE CENTER STAGE
During the Fall of 2016, DMPs gained escalating attention among the automotive marketing elite. In the November blog, What You Need to Know About DMPs, we learned the biggest uses for these data management platforms, including more accurate sales attribution metrics, more opportunities for personalization and one-to-one marketing, and that DMPs are an ideal tool in terms of audience targeting and segmentation.
12. ATTRIBUTION CLAIMS ITS THRONE
In the August 2016 blog titled, AT LAST: Attribution Claims its Throne, David Metter, President of AutoHook powered by Urban Science writes...
"Mark my words - 2017 is going to be THE YEAR OF ATTRIBUTION. eMarketer admitted companies have been slow to adopt proper attribution methods due to a number of obstacles, however they estimate over 50% of American businesses will make multichannel attribution a priority for their marketing efforts in the year ahead."
FUTURE FOCUS: 2017 Trends
What is the point of marketing if you can't prove it resulted in a sale? There’s no argument that with everything our industry is capable of measuring, it all comes down to physical transactions between customers and dealers, specifically units sold and closed service ROs. That’s what you measure before anything else. That’s the reason the concept of attribution exists in the first place – to help you generate more sales and service revenue. Learn more in David Metter's December blog, VDP Views are the Top KPI...and Other Data Myths.
According to The Marketer's Guide to Cross-Channel Attribution, "Marketers need to be measuring every campaign, regardless of channel, against the same goals they set out to achieve at the start of the year. These tend to sound a lot more like increasing lifetime value and average order value, and driving repeat purchases and customer loyalty, rather than increasing open rates or click rates, reach or visits. But this is only possible through cross-channel and cross-device attribution."
If you're not doing it already, equity mining software should be the first thing dealers put into play in 2017. If you're not familiar with the term, Automotive News explains it as, "Equity-mining software, sometimes called data-mining software, enables dealerships to spot current customers who are in a good position to get out of the vehicle they have and into a new one for about the same monthly payment." AutoAlert has one of the industry's best data mining tools that uses advanced algorithms and analytics to reveal online trends and consumer behavior in order to provide actionable, in-market consumer intelligence. Equity mining could be the difference between being a part of the noise or being the first one to speak up when the time is right.
Personalized marketing campaigns based on a consumer's previous actions and their digital footprint are increasingly becoming the most effective, if not the only way to impact buyers at the right time. Custom-built, targeted messages with a personalized touch elicit fiercer engagement rates. People don't just want personalized messages, they now expect them and are most likely to respond to an ad or message exclusively crafted for them.
How else can you break through layers upon layers of digital ads screaming, "Look at me! Look at me!" People want personal. If your marketing initiatives don't take this into consideration, you will fall flat on consumers ears and invisible to their very short (and shrinking) attention spans.
By David Metter
Just as one baseball glove does not fit all who play baseball, one “all-encompassing” marketing suite or strategy does not fit all in the automotive business. Think about how our industry views vendors. If dealerships are the players, then vendors are the equipment – the bats, the gloves, the cleats, the helmets – the indispensable facilitators of grand slam opportunities. No team has a shot at winning without the right, proper-fitting equipment. It is the equipment, or rather the vendors, that provide the gloves and helmets that give players the freedom to do what they do best – play the game. But you can’t play baseball without a ball – and you can’t sell cars without vendors.
Okay, okay. Technically, you can still sell cars – but after taking 30 immaculate photos of all vehicles in your inventory, building and maintaining your dealership website, getting certified in Google AdWords to run your paid search campaigns, developing your own CRM, and designing retargeting ads in HTML, there isn’t much time left for selling cars. Am I right?
It’s the “Jack of All Trades” approach versus a new age, fine-tuned, and forward-thinking approach. A company that claims to be a “one-stop solution for all your marketing needs,” cannot possibly be as competent in the results they deliver as a vendor that specializes (and dominates) in one specific area. Think about Walmart. If you wanted to, you could do all your grocery shopping and revamp your wardrobe all in one place. But do you really want to buy your underwear at the same store you buy your carrots? You would have to sacrifice quality somewhere, and in this case, it’s going to be your underwear.
The most progressive dealers, dealer groups, and manufacturers make the time to evaluate new, revolutionary technologies. Why? Because they can have revolutionary impacts on your business. The best players never compromise quality for convenience. They embrace change and innovation while always keeping their eye on the ball. They know the score at all times. To win at something, you don’t necessarily have to know all the stats and analytics, or every player’s batting average, but you do have to know the score – or rather, where you stand in comparison to your competition.
“IF DEALERSHIPS ARE THE PLAYERS, THEN VENDORS ARE THE EQUIPMENT - THE BATS, THE GLOVES, THE CLEATS, THE HELMETS - THE INDESPENSIBLE FACILITATORS OF GRAND SLAM OPPORTUNITIES.”
More than ever, platform-style vendors are developing marketing suites that consolidate all needs into one. In theory, this sounds like a good idea. However, with product consolidation can come problematic insufficiencies that do not fit all business models, especially those that are unique to car dealers. Jay Henderson, Director of Strategy at IBM advises, “To best succeed in 2016, marketers must understand that flexibility is key and the ability to integrate with a variety of best-of-breed technologies can open up amazing
new opportunities to innovate and engage.”
Thinking outside the traditional marketing platform mentality is the clutch, or the fastball, that will ultimately defend your dealership from falling into the dreaded “average” category, which also fails to identify why people should buy from you. Average is not compelling. Average online experiences don’t drive buyers to your showroom – and more importantly, traditional marketing suites do not offer memorable experiences for your customers. Who wants to be average? Certainly no one in an industry synonymous with competition.
These one-stop-shop agencies and vendors lure you in with the appeal of only having to remember one login, with a single user-interface where you can access all your advertising needs – spanning from paid search, to social media, to email marketing, to your in-store conversion tools, as well as the analytics and reporting on all said items. But that’s exactly why they make tools like LastPass, which manage all your sites and logins so you don’t have to, while providing an easy method of ensuring you have the right players, in the right positions, with the best possible equipment. In other words, the ultimate, game-winning formula.
There’s no denying the accelerating rate at which new companies, with first-ever technologies are entering the digital landscape. This makes it virtually impossible for an all-in-one marketing platform to keep up with up-and-coming players, with best-in-class solutions that challenge the traditional way the game is played. In IBM’s recent whitepaper, they recognize the flexibility that accompanies integrating the ideal mix of solutions as opposed to a large “one-size fits all” marketing suite. “In 2016, look for new ways to leverage your technology mix to give you greater agility to innovate and more strongly engage your customers.”
SmartInsights.com points out another common problem that has accompanied the upheaval in digital solutions, with a movement towards large vendor product consolidation. These curveballs that disrupt organizations and halt communications is what many refer to as digital silos. “Digital silos are created where different parts of marketing and their agencies don’t communicate effectively giving rise to campaigns that don’t work across media.”
When considering which vendors to work with, remember to choose ones that complement each other. For example, you can’t achieve a high website conversion rate if you don’t get enough traffic to your website. Likewise, when drafting a winning team, a coach is tasked with the finding the right blend of talent and strengths, and placing those players in the right positions. And when you think about it, that’s really the only way to win at anything – finding that perfect combination of vendors and tools and making sure all your bases are covered with the player that’s made for the job.
*Article originally featured on Digital Dealer
By David Metter
The residents of Missouri and Illinois had a rough start to 2016 after the detrimental flooding of the Mississippi River and other waterways spanning the two states. In some areas, more than two feet of rain graced the Midwest with its presence, resulting in over 25 deaths and thousands forced from their homes in freezing temperatures.
The vicious results of natural disasters can have snowballing impacts (no pun intended). Mother nature doesn’t simply affect individuals, families, and their communities but on a larger scale, both businesses and entire industries feel the consequences. Urban Science data revealed the flooding in Missouri had a direct impact on their auto sales when compared to all other states. In January, sales in Missouri were down about 10%, compared to a 4% increase throughout the rest of the country.
More recently, the East Coast was hit with monumental and even record-breaking snowfall accumulation due to late January’s winter storm, Jonas. The storm’s heartless medley of snow, ice, high winds, and coastal flooding proved the unyielding domino effect of weather-related damage that expands far beyond vehicle sales. Over 80 million Americans were affected, including at least 31 deaths and of course, property damage.
According to Automotive News, the “Jonas Effect” forced Toyota to temporarily close 200 of its dealerships. Herb Gordon Volvo, in Silver Spring, Maryland experienced a roof collapse due to the overly dense snow. Fortunately, there were no human injuries; however valuable inventory was lost (seven Volvos to be exact). General Manager, Ed Sarecky reported the damage would take about 45 days to be restored. The silver lining – they plan on rebuilding the area with a more enclosed, highly stabilized rooftop to prevent losses like this in the future.
This is not the first time the auto industry has suffered from natural disasters, nor will it be the last. Back in 2005, on a much larger scale, Hurricane Katrina became infamous as one of the five deadliest storms in the history of the U.S. But there is a light at the end of the tunnel. As an industry, we did learn a few things that can benefit dealerships in the case of yet another unwarranted disaster.
The following are the top three findings dealers should be aware of in order to prepare for, or minimize the damages associated with natural disasters such as these (excluding the obvious of securing a good insurance policy).
1. Sales will skyrocket after 30-90 days following a natural disaster. What dealers don’t necessarily expect is that directly following this lagging bounce-back period is when vehicle sales reach record highs. A trend we’ve seen with unprepared dealerships is they often lack the necessary inventory to meet the soaring demand. In addition, we have to consider not just the quantity of inventory to prepare for the spike in sales, but also the right variety of vehicles to keep in stock depending on the geographic location and nature of the storm.
Urban Science conducted an extensive data study one year after Katrina hit. According to Wards Auto, the study revealed, “While Hurricane Katrina sparked a human exodus and crippled many car dealerships in the metropolitan region, automakers scrambled afterwards to get the right vehicles to market because of an ensuing surge in demand.”
Mitch Phillips, Global Director of Data at Urban Science, toured the city of New Orleans and its dealerships to witness the aftermath six months after Katrina. Phillips noted, “Car sales dropped, but pickup truck sales nearly doubled. As people came back to the city, they were fixing their homes and hauling away debris. They needed pickup trucks.”
2. The odds of real-time data will always work in your favor. And by real-time, I mean real-time. I don’t mean data from 30 days ago. I mean real sales and transactional data from this very instant that can be used to your advantage. Big data alone won’t cut it. The data you use to optimize your strategy during a storm-induced sales coma should be fast, intelligent, and purposeful – meaning you can use it to craft your sales strategy right away. Accept nothing less than real-time data, as this is the only truly efficient source towards improving your sales and marketing efforts.
3. You’re going to get fewer leads, so make the most out of the ones you have. This means optimizing your website, lead forms, and overall marketing efforts for conversion. I’d recommend beginning with mobile and working your way down. Make all calls to action, including directions and your phone number prominent and easy to find. Make forms short and to the point. If you’re going to ask for someone’s information, they are more likely to provide it if you offer them something in return. Consider a gift card incentive just for coming in for a test drive. You always have a better chance of converting a customer once they are physically in front of you.
While looking back on his visit to New Orleans, Phillips adds, “It’s not just hurricanes. Any natural disaster, such as an earthquake, can cripple a dealership. There need to be provisions for natural disasters in areas susceptible to them.”
Personally, I like to consider myself an optimist. Over time, the snow will melt, water levels will recede, and the material damage will be restored. Roads will be cleared and safe once again, and the revival of new hope will begin to set in. I believe that with every misfortune or tragedy comes a valuable lesson. What we can learn from the unstoppable, unpredictable force of Mother Nature is how to prepare for the aftermath should it happen again.