How Dealerships Should Be Doing Their Marketing in 2018

It's time that dealerships make more cost-effective and viable decisions about their marketing budget and where they are spending it. These are the three main areas that you should be focused on for this year, and your dealership may be seriously falling behind if you are not optimizing around these processes.

1. Turning Website Traffic Into Leads

The first thing that every general manager should recognize about the automotive industry: your dealership’s website almost assuredly does not convert.

The standard conversion rate on a dealership website is around 2%. That means that, if one hundred people visit your site, then only two of those people will fill out a contact form.

There are many reasons for this low conversion rate. The dealer websites are dense and hard to navigate, don’t encourage easy and “safe” forms of contacting the dealership, and they don't help clients understand why they would want to shop from your specific dealership.

A strong dealer website operates like a strong salesperson. That means they are friendly, they are not "in-your-face", they make the process simple, and they only sell one step at a time. Most of the web providers in the automotive space are focused on up-selling to their dealer partners instead of teaching them how the website should operate. They respond to the whim of each general manager. They will place the insane sliders on the top of the website, or the big call-to-action buttons on the sidebar, the “Get Financed Now” exit-intent pop-up that pisses off your web visitors, or that chat box that covers half of your screen and shows stock photo of the nicely dressed woman who clearly doesn’t work at your dealership and doesn’t really know anything about the process.

So the first thing that every general manager should do for their marketing this year is take back control.

You should be managing your own ad spend to the dealer website and be checking conversion rates on a weekly basis.

You should also be using alternative methods to generate leads, such as setting up your own landing pages or using your own web provider. Having no control over the website and what the messaging on the website is, and having to pay an insubordinate fee to the web provider or waiting weeks before any changes are made, is like being unable to give your salespeople advice on their process.

The website is your “online sales team”. We need to stop thinking about the online world as this complicated and foreign land, because the website is really bringing people through the same sales process that occurs when someone walks onto your lot.

Why would the sales conversation that is being initiated on your website follow a process that would be any different than the sales conversation that would happen on your lot? You are having a conversation with the same client, who has the same psychological makeup, with the same needs and wants, and the same biases about the industry and what kinds of people work in the industry.

Dealerships should be setting up landing pages around various marketing messages. For every client that walks onto the lot, a strong salesperson will deal with their specific pain points and have a real conversation with them. This is how your website should work.

2. Managing Your Marketing Budget

If you're not properly tracking where your marketing dollars are being spent and how effective those marketing channels are to your bottom dollar, then you can't possibly make the right decisions about your budget. There are too many lead providers in the industry that are supplying poor quality leads with little return, and too many agencies in the space that don’t show their clients where the budget is being spent or how it is being spent.

I was visiting one of my dealer partners yesterday, and we saw that the GM had been paying $7500 a month to their web provider so that they could run an AdWords campaign every month. This GM was not happy with the results and had recently cut the ad spend in half. Lo and behold, he received the same exact results when he only paid the agency $3000.

Not only is it a bad idea to have your web provider run your ad campaigns for you, but you have to realize how these agencies are generating their profit. If they take a percentage of ad spend, then their incentive is to spend more money on your campaigns every month. Not less.

If your partner is not informing you of how much of their monthly budget is going into ad spend and how much is going into their pocket, then they are going to keep changing the spread based on your satisfaction. When you’re dissatisfied, they may put more into the advertisements. When you’re happy, then they will generate less leads next month and pocket more of the money.

Whatever you do, and whoever you partner with, you have to make sure that you are evaluating your own budget and lead cost every month. You should be able to measure which leads from any given agency or lead provider are converting into sales and which ones are not.

If you don’t do your own assessment then you have to rely on the agencies monthly report.

Are you really going to trust the monthly report to show you all of the information that you need to make a rational decision? Or is it more likely to show you the information that would encourage you to stay with that agency?

Instead of a monthly report, general managers should have direct access to the ad accounts so that they can see exactly what is going on.

A few things to be wary of in the digital space:

  • A popular web provider operating as your agency, especially if they work with your competitors too.
  • An agency spending all of your AdWords budget on keywords that you are already going to be ranking for organically.
  • A third-party charging exorbitant or monthly fees for something small: like a landing page set-up or a simple "retargeting" strategy.
  • A third-party pitching you on something new every month, whether that be revamped scroller designs or a new "calculator" tool, be wary of the "flavour of the month" pitch.

Trust your intuition. It may be a “shiny object” but it probably isn’t gold. You need to focus on the basics of your attribution and conversion rate process here: no shiny object will save an overall poor digital strategy.

I get all of my dealer partners to have their salespeople relay information back to their marketing team so that they can make clear decisions about what is working and what isn't. Your salespeople should be collecting information on "how" clients found out about your dealership (so that you know what marketing channels are working) and "why" clients applied or visited (so that you know what marketing messages are working).

This should be collected for every client that buys a vehicle, and then relayed back to the marketing team for assessment and budget allocation. This way, you don’t have to worry about heavy analytics tracking or looking at a bunch of metrics to assess “pieces" of the process.

There’s a beauty in making your attribution process this simple. Clients are going to be telling you what was most important to them during the process, so you can determine whether certain channels are simply expenditure leakages. If your agency is telling you that they are getting such-and-such many leads through AdWords, for instance, but nobody is recalling using a Google search to find your dealership, then you will know that you are wasting your ad budget with that agency and that they are not delivering said results.

If you do this for every sale, then you will have all of the actionable data that you need to remove the wrong partners in your network and put more money into the right ones. If you are tracking messaging, then you will know exactly why clients want to buy from your dealership, and you can put more ad spend into the marketing messages that convert.

3. Social Engagement

We live in a networked world - the average US consumer spends 40 minutes a day on Facebook. If I need to tell you why your dealership should be on the platform, then you need to seriously check what your competitors are doing and how they are scaling. You won't be able to survive if you don't have a digital strategy.

The problem is that organic reach has decreased on Facebook Pages, and dealerships are making posts that fail to resonate with their audience and fail to reach anyone who has liked their Page.

This year, dealerships need to move away from simply “boosting” their posts and start moving towards the Ads Manager and making more practical decisions about their budget.

Dealers need to operate with the same organic and community-feel that has been so effective at growing certain salespeople's Pages over the last few years, and then integrate the Facebook ad platform into the management of their posts and their engagement.

Every new organic post should be run as a small "Page Post Engagement" ad to the current fans of your Page and then assessed as a candidate for a larger paid campaign. This is the most effective strategy for managing your budget and it means that your dealership will only spend larger amount of ad dollars when you have a winning ad campaign.

Dealerships need to start creating video content that develop relationships between their client and their employees and that showcase why clients decide to buy from their specific dealership. Dealerships need to start moving clients toward review sites when the sales process has gone well, and should be maximizing the reputation that they have online.

Someone at the dealership who understands the sales process should be manning Facebook Messenger and communicating with new leads that are contacting the Page.

Your Facebook Page should operate like a well-oiled machine and boost out creative content on the regular. This is how you scale this year and it's not difficult to do properly with the right processes and the right marketer at the helm.

How Are You Marketing Your Dealership?

These are my recommendations for digital strategies that you should be using at your lot, but maybe you're doing something different?

Let me know in the comments below.

With that being said, I hope you make great use of the rest of the year, and that you really blow things up as soon as you can!

Dodge Charger, F-250 popular with car theives

img-1The most theft-prone vehicle in America might be the Dodge Charger. Or it might be the Ford F-250 pickup truck.

Those are the contradictory conclusions of the National Highway Traffic Safety Administration and the insurance industry-funded Highway Loss Data Institute.

Still, the government agency and private group agree that the theft of late-model vehicles is on a rapid decline in the United States. One reason: automakers' increasing use of ignition immobilizers, which stop thieves from hot-wiring cars. Nearly 90 percent of 2012 models are equipped with them.

In a report released on Monday, NHTSA said the car stolen most often during the 2011 calendar year was the Charger, with 4.8 thefts for every 1,000 cars produced in 2011. It was followed by the Mitsubishi Galant, Hyundai Accent, Chevrolet Impala and Chevrolet HHR among vehicles with more than 5,000 units produced that year.

Pickup trucks took the top five places in dueling rankings released today by HLDI, an affiliate of the Insurance Institute for Highway Safety. In first place was the Ford F-250 crew-cab with four-wheel drive, followed by the Chevrolet Silverado 1500, Chevrolet Avalanche 1500, GMC Sierra 1500 crew, and Ford F-350 crew with four-wheel drive. The rankings cover model years 2010 to 2012.

The Cadillac Escalade, long the most theft-prone vehicle according to HLDI, dropped to sixth place after GM reworked the SUV to thwart thieves.

"General Motors has put a lot of effort into new antitheft technology, so that may help explain the decline," Matt Moore, vice president of the group, said in a statement.

Different methodology

The two reports produced separate results because of differences in methodology, Moore said during an interview. His group bases its rankings on a database of insurance claims, while NHTSA counts thefts reported to police.

Moore said large pickup trucks are also particularly prone to theft claims because owners can recoup the cost of equipment stolen from the flatbed.

Still, the two groups can agree on some of their findings -- including that the Charger is stolen more frequently than most vehicles. While the muscle car did not make the top 10 most stolen models according to HLDI, the group found that it had 3.5 theft claims per 1,000 years of insurance coverage, or triple the average model.

Experts are not exactly sure what makes the Charger so popular with thieves, although the car's ample horsepower might be part of the equation.

"If I were a thief I might be able to answer that better," Moore said during a phone interview. "They're powerful vehicles," he added.

NHTSA says its preliminary data show that model-year 2011 vehicles were stolen that calendar year at rates 91 percent lower than the year before.

Steep decline?

In 2011, there were only 0.1 thefts for every thousand vehicles produced, down from 1.17 thefts per thousand cars in 2010. To compile the report, which contains statistics from 226 vehicle lines, NHTSA compared vehicle theft data from the FBI's National Crime Information Center with production data reported to the EPA.

NHTSA says its latest findings mark a record decline in the theft rate. NHTSA data show that the nation's vehicle theft rate has declined by an average of 13 percent each year since 2006, which was the last time the rate increased.

Terri Miller, executive director of Help Eliminate Auto Thefts, or H.E.A.T., a public-private partnership dedicated to the prevention of vehicle theft, was skeptical of NHTSA's conclusion.

She said auto theft is dropping, but she would be surprised if it is happening as quickly as the report indicates.

"It seems like a very dramatic decrease," Miller said.

BMW extends global sales lead over Audi, Mercedes in June

img-2Global sales of BMW Group's core brand rose faster in June than at Audi and Mercedes-Benz as demand from China and the United States helped the premium carmaker to extend a lead over the two rivals in the first six months of the year.

Sales at the brand were up 9 percent last month to 153,075, the group said today, compared with growth of 5 percent to 140,300 and 8 percent to 131,609 at Audi and Mercedes respectively.

Six-month sales at BMW brand rose 8 percent to 804,000 cars, expanding the lead over runner-up Audi to 24,000 from 11,000 after five months. Half-year sales at Audi and Mercedes rose 6 percent each to 780,500 and 694,000 respectively.

"BMW has stronger momentum than Audi and Mercedes, that won't change in the second half," said Hanover-based NordLB analyst Frank Schwope. "Design of their cars has improved and they're ahead on fuel-saving technologies."

Tesla to join Nasdaq 100 as Oracle defects to NYSE

img-3Tesla Motors Inc., the world's best-performing automotive stock this year, will join the Nasdaq-100 Index next week, filling the spot vacated by Oracle Corp., which is moving to the New York Stock Exchange.

The electric-car maker will be added to the gauge, which tracks the biggest companies on the Nasdaq, before the start of trading on July 15, Nasdaq OMX Group Inc. said in a statement Monday. Oracle, which last month said it will join the NYSE, is the biggest company to jump between the competing exchanges.

Shares of Tesla, the carmaker headed by billionaire Elon Musk, have more than tripled this year as the popularity of its new Model S sedan helped the company turn its first quarterly profit. Gaining entry to benchmarks tracked by investors is attractive to public companies because it provides a guaranteed shareholder base.

"It's a coming of age, recognition that a company has market

Toyota Camry, Honda Civic inventories rise, report says

img-4The Toyota Camry and the Honda Civic, the top-selling mid-size and compact cars in the U.S., face risks of reduced production as inventories of the models rise, an RBC Capital Markets report said.

Toyota's Camry exceeded its seasonal historical average inventory by more than 15 days supply in June and Honda carried about 25 days more Civics than usual, Joseph Spak, a New York-based analyst for RBC, said in today's report. Camry and Civic were the only models identified as at risk for reduced output among 16 of the top-selling vehicles in the U.S. market. General Motors Co., Ford Motor Co. and Chrysler Group LLC all added U.S. market share in the first six months of 2013, the first time that all three gained first-half share in 20 years. Models such as GM's Chevrolet Cruze compact and Ford's Fusion mid-size sedan, leading Detroit's most competitive set of passenger cars in

Fiat exercises option to buy additional 3.3% of Chrysler shares

img-5Fiat today exercised an option to raise its stake in Chrysler by 3.3 percent.

The move is part of CEO Sergio Marchionne's step-by-step purchases intended to lead to full control of Chrysler and the creation of a merged company that would be able to compete better with industry leaders Toyota, General Motors and Volkswagen.

Fiat has been exercising options since mid-2012 to buy holdings of about 3.3 percent from the VEBA, a medical-benefits trust for the U.S. carmaker's retirees.

Including today's purchase, Fiat has exercised three of its six-monthly options, increasing its stake to 68.49 percent.

Fiat has said it wants full control of Chrysler, which would give it access to some of Chrysler's cash flow for investments in new models.

Chrysler has become Fiat's most reliable profit generator as the Italian company struggles to end losses in Europe that totaled 704 million euros ($903 million) in 2012 amid a