You don’t have to spend a lot of money in the digital space to be successful. As someone who makes a living selling software and digital marketing solutions, it might seem a touch self destructive to suggest this.
It’s true I always encourage dealers to invest as much as they can afford to in the digital space. However, the key part of this statement is “as much as they can afford”. This can differ from dealer to dealer, and what might be considered a bare minimum digital spend for one dealer could be an unnecessary extravagance for another.
Whether you have a lot to spend or only a small amount there are some basic questions you can ask yourself to make sure you are making your digital dollar stretch.
Is it going to make you money?
The whole point of doing any marketing is ultimately to make sales. Sure it’s nice to gain exposure and create a brand image, but if this does not ultimately translate to increased revenue then what’s the point?
The first key measurable of digital spend in Australia is enquiry. If your online activity is successful at generating enquiries to the dealership, then it is creating opportunities to make a sale.
The second key measurable is conversion. As important as digital is to generating enquiry, it can also help convert enquiry to sales. Any digital spending that has a measurable effect on either of these kpi’s is surely worth the expense.
Are you spending in the right areas?
The beauty of digital is that it the effects of digital spend are somewhat traceable. Spend $1000 on a newspaper advert and it’s difficult to quantify how many phone calls were received as a result of the advert, and how many would have called anyway.
If you spend the same money on a Google Adwords or SEO campaign, you will be able to directly measure the increase of site traffic – and if you are smart, the number of those visitors who funnelled through to make an enquiry. With digital it’s pretty easy for dealerships to work out if they are getting return on their investment through site visits, page views, time on site or enquiry. This is considerably more transparent than newspaper ‘measureables’ such as ‘reach’ and vague readership figures.
What is the opportunity cost of your spending?
In an ideal world, sales managers would be able to spend as much as they wanted promoting their vehicles and dealership online. In reality, dealerships often have limited budgets and it’s hard to pry more money out of the financial controllers’ hands for marketing. Often it’s not a decision to invest in additional marketing but rather a money driven choice between “this” or “that”.
When money is tight it’s important to understand the relevant costs and benefits of the potential activities you are missing out on. In some cases it will come down to a choice between upgrading your website to increase conversion or spending more money on SEO, or Google Adwords, to get more people on to your website in the first place.
With the questions above in mind, let’s take a look at some of the typical online marketing expenditure in Australian dealerships.
Websites
Websites are often a big expense for dealerships, but one I feel is sometimes vastly overestimated. Too often you will see a pretty slick looking site that does a no better job of generating enquiry than a basic 3 or 4 page website. As someone who works in the industry you hear whispers of outlandish quotes of $25k, $40k and even $80k!
I believe if you cannot get a website site built for your dealership for under $10k then you might be getting ripped off! For most dealerships even this will be overkill when you consider most enquiry comes from 3rd party channels. For $3k to $5k most dealerships should be able to create a website that ticks all the boxes.
When thinking about replacing your website consider just replacing your used vehicle display instead. Plugging in purpose-built used vehicle display pages can revitalise a stale looking site and turn an old dog into an enquiry generating machine!
Listing presentation
In most dealerships this is often not an additional investment….but maybe it should be. Consider the merits of employing an internet savvy specialist to handle the photography and listing of your vehicles online. Not only are you likely to be able to source someone for a reasonable salary, but you also free up sales people to focus on doing what they do best – selling!
One caveat is that the person listing your vehicles must know enough about cars to effectively list them. If such a person can be found, investing in a digital specialist may well be the smartest digital decision a dealer can make.
3rd party channels
Most dealerships receive the majority of their enquiry from 3rd party channels, and you have to fish where the fish are. Unfortunately, it can be expensive to list your vehicles on these sites – particularly if you have 70-100 cars. If budgets are tight it could be more sensible to list few vehicles well, than all your vehicle half ass.
Too often dealers will list 100 vehicles with little features or comments on 3rd party sites when they would be better off ensuring 30 vehicles are presented in the best possible light.
It’s also important to take advantage of new low cost (or free) options which are relatively easy to set up and are worth the time if they generate even one enquiry!
Email response and lead management
It’s not unusual for dealers to spend thousands on their own website or advertising on 3rd party sites, but have no process or technology to handle the leads when they get to the dealership. There is a school of thought in the industry that most dealerships convert only 1 out of the 10 leads they receive. If we assume this to be true – what is happening to the other 9? This is where CRM and ‘lead management systems’ come in to play.
An investment in this area of digital can help dealerships manage and – more importantly – convert their email enquiry. If the budget does not stretch to this area then it’s critical that time is invested instead in processes and training to ensure you are not wasting the money spent generating enquiry.
The purpose of this article is not to discourage digital spend – far from it! In fact the old saying “you have to spend money to make money” still rings true in the digital space.
Successful dealers are those that don’t just sit on their hands when it comes time to advertising and marketing. The most successful dealers are prepared to spend money to make money. For those not blessed with endless budgets or the advantages of scale, it is still possible to achieve great results in the digital space.
Just ask yourself the questions outlined above, prioritise your spending and keep paying attention to what is out there.
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