Essential Basics: for Your Dealership’s Future
Have you listened to yourself recently? You’re likely talking about how important it is to conquest new customers, followed by a common phrase such as: “Time to put your money where your mouth is.” Too often, when I talk to dealers, they want to win more new customers, but face a big obstacle – their own budget. These two ideas – Conquesting new customers and inefciency – do not have to be synonymous. Must dealers continue to accept inefciency from their conquest vendors? Or, could a dealer significantly cut ad waste and invest in other innovative ways to conquest new customers? I work with hundreds of dealers who say it is the latter.
Unpacking The 4 Most Common Ways to Conquest New Customers:
1. Mass Media Marketing
Mass media has the longest lifespan in automotive and is the most common approach to conquest marketing. It is a helpful way to gain brand awareness with conquest shoppers and it’s not a bad place to spend some of your marketing budget. However, it can quickly absorb a huge portion of your ad budget and become inefficient if you’re not careful. The average cost per local airing in the U.S. is $5,0001. At that price point and with no way to attribute sales to a specific mass media push, it can feel like you are throwing money down the drain. It’s been fascinating to see how many clients who have cut mass media and gone 100% digital have seen huge growth. There is often a balanced approach, but if you have a strong brand, it might be time to re-evaluate your need for mass media.
Also, consumers are spending less time shopping for a vehicle, but the same amount of time online. Meaning, the online experience makes up a larger percentage of their overall shopping experience – making it more important to re-evaluate spending within your marketing mix to follow shoppers into the online/digital space and not necessarily buying local airtime.
2. 3rd Party Websites
3rd-party websites are usually where dealers turn when they are trying to increase the digital footprint of their conquest marketing mix. Many dealers use these sites effectively to attract eyes from people they’ve never worked with. They are a legitimate conquest strategy that can be used in an efficient manner as long as you aren’t investing too heavily in 3rd party sites. Because leads tend to occur right before purchase, relying on lead providers as the main form of conquest marketing often causes duplication of your marketing effort, creating inefficiency. It’s a great safety net to ensure you are in the mix if a consumer ends up on one of these sites, but with only 10% of prospects submitting leads, you’re likely to spend money 2X and 3X over on the same small pool of people. Similarly, it’s easy to overspend on the end of a buyer’s journey and miss an opportunity to get in front of new customers earlier in their shopping journey.
The other conquest marketing dealers turn to when they are investing in the digital space is SEO/PPC. Dealers invest a large portion of their ad dollars to drive shoppers to their website. Once there, they count on their website to drive consumers to submit leads through specials, pricing, customer service, etc. In theory, this is a fantastic allocation of marketing funds. Who doesn’t want more website traffic? The inefficiency within SEO/PPC is not found in its concept, it’s found in its execution. The truth of the matter is, 37.9% of internet traffic is made by bots2. Meaning, more than a third of all internet traffic is not a real person surfing the web or engaging with your website. If you can’t identify the shopper on the other end of the computer, there’s no way to know if you are wasting money on fake conversions. You’re paying for clicks (averaging $1.43/click in 2019) every time. Unfortunately, this creates some inefficiencies in the SEO/PPC channel.
4. Predictive Analytics
Last, but certainly not least, is an approach gaining momentum with automotive vendors for conquest marketing, predictive analytics. Predictive analytics is a form of audience targeting utilizing historical data – often from a dealer’s database or purchased online behavior data – to predict future buying behavior. It’s a great way to make a guess at who is in market for a vehicle. Consumerism is cyclical, so learning from the past is a valuable strategy for dealers. The inefficiency here is in the name, it’s built on predictions. Predictive analytics will never be 100% accurate because it is not leveraging real-time data or data that indicates real purchasing intent. This means your marketing spend will never be close to 100% efficient. It’s a good gauge of the market and can point you in the right direction – but putting a significant amount of your ad spend in an educated guess has inherent risks.
We’ve discussed the four most common ways dealers attempt to target conquest shoppers and the
ine ciency associated with each budget line item. The good news is awareness is the first step to taking
progressive steps towards innovation in your conquest strategy. The better news is you can now take a
realistic view at your budget to determine where you might be overspending to market to new customers.
The best news is these four are common, but not the only or best options. Today’s data and tech introduces
data-driven marketing solutions that bring new levels of e ciency to dealers. In my next blog, we will
discuss what to look for in these innovative solutions. Until then, look at your marketing mix and see what
ine ciencies you can find that are causing you to be ine ective in bringing in conquest customers to your
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