What are your marketing goals in 2020? One of the biggest pain points for dealers is deciding where to spend their marketing dollars to get the results they want. Many dealers feel like their marketing strategies don’t perform as well as they used to, which, when combined with declining sales profitability, puts extra pressure on marketers to up their game.
However, doing the same thing over and over again and hoping for different results is the definition of insanity. You know what else is insane? 85% of leadership teams spend less than one hour per month discussing strategy, and 95% of employees don’t understand their organization’s strategy. If you want to improve marketing ROI, the first step is to block some time so you can research and develop new strategies, put them in writing and communicate them to your employees.
The auto industry is changing rapidly, so the next step is to consider current industry trends. What worked yesterday doesn’t work today, and this doesn’t only apply to marketing. It also applies to sales and service. Let’s review major market trends:
Trend 1: Digital Transformation
Gartner Market Insights reveals that 67% of leaders say their companies will no longer be competitive if they can’t be significantly more digital in 2020. Today, nearly all consumers begin the car-shopping process online and 86% of consumers use social media every day. Relying on inventory alone to attract car shoppers, and neither is relying on email and/or snail mail to retain your current customers. Too many customers today delete emails or send them directly into spam folders, and disregard snail mail.
Your dealership needs a digital marketing strategy, and not just for sales. Your fixed ops department is responsible for half of your gross profits, so half of your digital marketing budget should be allocated to a strategy for service and parts. The old “sales feeds service” paradigm is outdated, as these days “service feeds sales” is equally true.
Trend 2: Importance of Data Curation
Intel CEO Brian Krzanich famously said “Data is the new oil.” In dealerships, on average, only 10% of data stored in the DMS is being used for any purpose, let alone developing business and marketing strategies.
These days the ability to leverage data is critical to gain the insights necessary that keep your business thriving. And if your marketing partner(s) aren’t leveraging your data to reach and engage with customers, it’s no wonder that your marketing isn’t getting results.
When selecting a new marketing partner, ask them how they use your DMS and/or CRM data. In addition to the data in your DMS, an effective marketing strategy relies on selective acquisition of third-party data. This is used to augment the data in your DMS to develop targeted, relevant communications.
Today’s savvy marketing companies either perform their own data analysis, or partner with companies that specialize in this area, in order to maximize marketing ROI.
Trend 3: Rise of the Customer Experience
75% of consumers say the customer experience is an important factor in purchasing decisions. Millennials also dominate the consumer space, and they care less about price and more about ease of service, convenience and the overall experience.
With flat margins, the only way to differentiate your dealership from the competition is with customer experience. In the service department, where conversion and retention are paramount to growing profitability, the experience is everything. From how you communicate to the technology in your service lane, it’s important to implement a strategy that fits how you want the service experience to be. Do the research and ask what consumers want, and then provide that experience.
Avoid Common Pitfalls
Leverage these trends in your new marketing strategy. Take the time to develop a comprehensive strategy that focuses on these trends, while avoiding these common pitfalls.
- Do-it-Yourself. When times get touch, many dealers reduce spending on outside marketing and bring it in-house. Unfortunately, digital marketing expertise doesn’t come easily, and you can spend a lot more making costly mistakes. Choose a partner with proven expertise and a track record in digital marketing, and ask for referrals so you can talk to other dealers about their results.
- Investing in too many partners. Your marketing strategy should provide your customers with consistency in messaging. This can’t happen when you have too many partners. Look for a marketing partner that can integrate your marketing strategy with your sales and service marketing strategies. It’s also important that your direct mail and email strategies align with your digital marketing strategy.
- Separate the marketing strategy from sales, service and customer experience strategies . The customer experience you provide is dependent upon your marketing programs and your sales and service processes. Therefore, your marketing strategy needs to seamlessly integrate with your service and sales strategies to accomplish your goals. Additionally, your employees need to know what role they play in your dealership’s strategies, so their behaviors and words can be aligned with your planned customers experience.
Today’s marketing strategies are no longer “set it and forget it.” With the rapid pace of change, you need to review, monitor and adjust your strategy so that your dealership can evolve to meet your customers’ needs and outperform your competition.
Insights | January 19, 2021