5 Questions You Need to Optimize Your Marketing Spend
As I speak to dealers, it is clear that it is becoming increasingly difficult to develop a marketing strategy that stands out from every other company’s marketing strategies, as more and more services and programs are being offered. Innovation from big data has flooded the marketplace with plenty of marketing options. Dealers are left with tough decisions on how to spend their advertising dollars.
1. Are You Getting First-Party Leads?
Not a day goes by that a dealer doesn’t tell me more and more customers are doing their shopping on the internet. And data backs this up.1 Because of this, once the customer gets to the dealership, the profit in the deal is minimal.
Unfortunately, that is a best case scenario – because sometimes the customer doesn’t even get to the dealership.
The key here is to use data to drive your marketing so that you can identify your customer at the front of the buying cycle.5 Questions You Need to Ask to Optimize Your Marketing Spend Click To Tweet
Stop buying leads from third-party companies and competing for those leads with other dealers. Use your marketing to get ahead of the competition and develop your own leads – before they walk onto your lot.
2. Are You Spending Your Marketing Dollars on the Right People?
I would compare this to politics.
The first goal is to rally and excite your base. The second goal is to go after the swing votes.
The further you move from left to right or right to left, the less impact you will have.
The same is true in marketing. You need a solid balance between customer loyalty marketing and conquest marketing.
While it’s necessary to continually reach your customers with offers and incentives that will keep them coming back, conquest marketing has become increasingly cost effective and is proven to be a necessary marketing tactic.2
Make sure your dealership has found a healthy balance between marketing to previous and potential customers to ensure the highest ROI from your marketing strategies.
3. Are You Staying in Front of Customers Who Have Shown Interest?
This has become a point of emphasis as dealers can drive a lot of visitors to their website, but conversions to actual appointments are often low. Retargeting has become a great way to stay in front of these customers. On average, customers spend over 14 hours researching vehicles online before visiting a dealership and most customers are undecided at the start of their shopping process. That’s why it’s vital that your marketing be in front of a potential customer long before they walk into your dealership.
4. Are You Making Your Customers’ Purchase Process Easy?
Great marketing should go beyond a response; it should also make it easier to buy from your dealership.
When you get a customer response, if you don’t make it easy to buy, then it becomes too easy for the consumer to just go to another dealer or website.
Your marketing has to push people down the sales funnel. By engaging your customer intentionally and pushing them through the next step of the buying process, you can take your customer to a deeper level within your dealership and diminish the need for the customer to visit other dealership websites.
Make sure your marketing is generating more dealership appointments, test drives, and sales – not just online leads.
5. Are You Measuring Your Results Correctly?
Every dealer I speak to wants measurable results. I think the question dealers must ask themselves is: “Am I using measurements that correctly gauge how customers buy?”
Measuring customer time frames will help calculate the effectiveness of spending. You should also calculate how much time (on average) it takes to close a sale.
For example, if it takes an average of 62 days from initial contact to close of sale, then you need to figure out how to lower the average number of days to close.
Choose a sales process or marketing tool that will help you better track each customer, expedite the process, and keep the sale in-house.
Look at your budget and ask these five questions, then look at programs for the future. This should give you a great start and (more importantly) a better position for your dealership’s budget. Innovation is coming to the marketplace – make sure you’re positioned to benefit from it.
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