This is Why You Need to Test the Water Before You Dive In
This is the third follow up article in a series of five from a recent article titled These Are the 5 Automotive Tips You’ll Love in the New Year.
Today’s article covers the two critical rules 1) Test everything and 2) See rule #1.
In this article, you’ll learn how to use small, inexpensive tests to generate valuable insights that will lead to significantly better results in multiple areas of your dealership.
Most dealerships consider their Google Adwords account one of their most important marketing channels – testing has never been more important than it is today. The market can change on a dime. You have to be able to recognize with certainty where the best use of your marketing dollars should go – and you have to be able to adjust those dollars instantly.Remember the story about Henry Ford? Before hiring anyone for an important position, Mr. Ford would have lunch with them. If the potential employee salted their food before tasting it, Mr. Ford wouldn’t hire the person. The reason? Salting the food before tasting it indicated the person would implement a plan before testing it.
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You can’t maximize your dealership’s sales and profits unless you know how to make the best use of your time, opportunities, efforts, and investments. The only way to guarantee your store is getting the best results possible is to systematically evaluate all the different approaches you have available in your dealership’s activities. You’ll discover that many times one approach can out produce another by large margins.
The odds are good that you underperform in a lot of areas because you’re depending on the wrong actions or approaches for your success. You can right that wrong and never make those mistakes again.My definition of a great marketer – a real professional – is someone who has the ability to get the maximum result with minimum effort – not the person or company with the most creative imagination. You’re a professional marketer if you understand that one approach to getting clients may produce three times the results of another – so, logically, you stick with the approach that yields the best results.
So a real marketing genius, in my opinion, is someone who is both logical and practical. I gravitate to the person or strategy that produces the highest and best results for the time, money and effort. Anyone can become a marketing genius by doing one simple thing – testing.
When I started J&L Marketing 28 years ago, my marketing knowledge was minimal at best. From the beginning I created a process to track and report all the activity from our campaigns. I didn’t do this because I had some brilliant idea and was smarter than everyone else. I did it as a defense mechanism. Twenty eight years ago, all J&L did was private sale events using direct mail. I was new in the business and I got tired of calling Dealers and GMs on a Monday morning, going back and forth on whether the event was successful or not. I wanted something I could point to, so I could have an intelligent conversation.
I Discovered Hidden Treasure
I was lucky that we always provided a Promotion Coordinator at our events. The Coordinator was able to collect an incredible amount of data from all the event attendees. It was something that separated us from everyone else.
It wasn’t until about a year later when I discovered the hidden treasure I had. I had a very smart friend who created an incredible database that stored, tracked and measured all the data we collected. This database allowed us to isolate down to a single variable. This was critical (and is still required in all testing) because it allowed us to know exactly what the cause and effect was for any changes or decisions we made to the list, headlines, offers, creative, etc.
This allowed us to develop new campaigns and strategies based on real data insights – not market hunches. We were able to avoid quick marketing fads and continuously improve on what was working and more importantly – eliminate what didn’t work.
J&L’s growth exploded because word spread quickly that dealers could count on us for real results – they no longer had to spray and pray. My intention of this article is not to impress you about J&L. It’s to impress upon you the power of testing and the impact it can have on you. I’m the same person I was 28 years ago… but I’m a much better marketer today because of the extensive testing I’ve done. I rely on data for all my decisions. You can do the same.
Always Test and Measure
None of us has the right or the power to predetermine what the marketplace wants. You do not know in advance what the best price, offer or approach will be.
You do have the opportunity to put every important marketing question to a vote by the only people whose ballot counts… clients and prospects. They vote with their time and money.
Your Google Adwords account is a perfect example. You or your agency should be testing different approaches, different headlines, different ad-extensions, hot-button emphases, different display designs, different keywords, and different campaigns within your account structure.
Test different channels such as Google, YouTube, Bing, gmail, Facebook, etc. The same fundamental approach applies to TV, radio commercials and your BDC as well.
Why run five 60-second TV commercials each day saying something only one way, when another pitch of the same message might pull in a lot more clients? If you use TV, wouldn’t you want to know whether showing your vehicles, showroom or service department makes a difference?
The cost is the same whether that 60-second commercial produces 20 clients or 220, isn’t it worth your while to find out answers to questions like these? If you are on TV, test where your commercials run – what stations and what time of day.
For those of you who have limited budgets, modify the testing concept and apply it to your sales teams. Then test different sales processes against whatever it is you or your sales staff currently use. You will find improvements in results, here too, when you test.
After replacing what you were doing with whatever test approach out-performs the original, keep on testing additional factors.
Make specific offers and analyze the number of responses, internet and showroom leads, and resulting sales for each specific ad. Then compute the cost-per-prospect, cost-per-sale, the average sale-per-prospect, average conversion-per-prospect, and the average profit- per-sale against your control. This reveals the obvious winner, the control that you will keep running until a better control beats it.
That TV, newspaper, direct mail and email ad costs you the same amount whether it produces 100 leads, 500 leads or 1,000 leads. So, you should test different approaches and find those that out pull all the others. Then use those approaches to maximize your investment.
Get Maximum Results
If one person in your BDC averages 100 communications per day (either by email, phone, text, etc.), doesn’t it make sense to find the message that gets twice as many responses or appointments with the same amount of effort?
If getting an appointment to show is how you measure your BDC’s closing percentage… instead of closing one sales call out of 15, you could identify a script that closes one out of eight, you’d immediately double the productivity of your BDC.
You can easily achieve immediate increases in sales and profits merely by testing.
You, or your team, should try different approaches, different hot-button focuses, different emails, different specially priced offers, different “bumps” or upgrades or different follow-up offers.
Each day or week review the specific performance of each test approach, then analyze the data. If a specific new twist or experiment on your basic sales approach out-produces the old approach by 25%-50%, doesn’t it make sense for everyone to start using this new approach?
Keep experimenting to come up with even better approaches that outpull your current “control.” Your control is the concept, approach, offer, or sales pitch that is consistently proven, through comparative testing, to be the best performer you’ve been using.
One thing you’ll discover when you start testing variables is that the difference in response or results can be extreme from just a small shift.
Always, Always Test Your Google Adwords Account
Digital is such a fast changing and always evolving marketing channel. What worked yesterday may not work today.
Many dealers to this day still recognize J&L Marketing as a direct mail event company. What they don’t know is that digital makes up the majority of our business today. This all came from testing different marketing channels.
I recently wrote a blog about How Artificial Intelligence Will Make You a Better Digital Marketer. I wrote it after a conversation I had with a 12-rooftop dealer. He mentioned a few of his frustrations with digital marketing and was questioning whether it really increased his sales. Over the last four years he had worked with three different digital agencies and only saw marginal improvements. He didn’t think his campaigns were adjusted according to what the market was doing. The worst part was he had no idea nor did anyone on his team know what changes were being made and the impact those changes had on results.
I asked him if he had ever worked with anyone who utilized artificial intelligence (AI) correctly. I could tell he had heard of AI was but wasn’t exactly sure, so I began to explain a little bit to him about AI and how it works.
AI is what happens when a computer system is able to make decisions that would normally require human intelligence.
It reduces human error, but, more importantly, it allows us to do more, be more specific, and gain better results from processes that would otherwise be more manual and time consuming.
With digital marketing, this means that the optimization that’s so critical for success to marketing campaigns can primarily be done through AI. It allows digital marketers to manage more campaigns and optimize and adjust those campaigns more frequently and in less time.
AI has single handily increased my own dealership’s digital marketing results by almost 200%! That’s not an exaggeration – that’s real data. AI allows us to identify on the fly what works best and what isn’t cutting it. In a nutshell… that is exactly the main goal of all testing. Now, all J&L digital clients benefit from this. We are literally optimizing accounts with almost 400 tweaks or changes per day. Most dealers are lucky if their Google Adwords account is optimized 400 times a week.
Always, Always, Always Test Your Direct Response Marketing
So far we’ve talked mostly about digital marketing. If e-mail or direct mail is your method… read on.
You probably use e-mail or direct mail to inspire people to immediately drive down and visit your showroom. Or… call you. Or… respond to some type of call to action on your website or landing page.
Before you mail to 50,000 untested people over the next 6 to 12-months… and spend good money on postage and costs, do some A/B testing of one version of your mailing piece against another. Or… one list vs another. Remember the key to all A/B testing is that they are identical except for one change. You must isolate down to a single variable or the test is not worth much.
You can test the same direct mail piece with two different headlines. Or… you can try different body copy with the same headlines. Try different offers. Try different creative or graphic design elements. Test as many things as possible in the smallest possible arena before you risk a big part of your advertising budget on one expensive marketing approach to a large audience.
Why guess what the market wants, what price they’re willing to pay or what proposition they’ll respond to when the marketplace is willing and eager to tell you the answer?
If you use email and direct mail, absolutely get your data right with testing – know who you should target. Data is the most important. Your offer is the next priority.
If you want people to read your ad you have to have a strong headline. It’s your “ad” for the “ad”. Most headlines don’t communicate a “What’s in it for me?” result that the prospect or client can expect to receive. If you want a high response… it must do so. If you want to see some of our most successful headlines you can go to my LinkedIn article – How to Make People Pay More Attention to Your Ads – 5 Sure Fire Headlines.
What you can test with email and direct mail is unlimited. You can have much higher open rates, click through rates, calls, form fills, responses and showroom traffic for the same money just by testing alternatives against each other.
- By testing one list vs another.
- By trying different copy.
- By trying one offer vs another.
- One price against another.
- One guarantee against another.
- One graphic design vs another.
- One mail piece vs another.
Remember the Two Rules of Marketing: 1) Test Everything & 2) See Rule #1
A large BMW dealer used two digital marketing approaches. In one, they relied solely on online data and research; in the other, the strategy incorporated offline data and research as well as online. The strategy that utilized both online and offline data doubled results with significantly less ad spend. You can view the case study here.
A 14-rooftop dealer who consistently runs email and direct mail campaigns ran the exact same offer, same date, same list… everything was the same except they split everything in two for an A/B split. They wanted to test two headlines:
- How to Upgrade Your Vehicle & Lower Your Payment with No Money Down!
- President’s Day Savings Event
The first headline trounced the second headline by 87 percent.
In all these cases, these companies would not have known the best results without testing. The results are often surprising. You can have far more sales, leads and showroom traffic for the same money just by testing alternatives against each other.
Don’t Forget About Controlled Group Testing
Let’s talk about control group testing.
One of our publicly traded auto group clients requests that we do control group testing on every campaign we run. A control group is where we would run all the data analytics to identify who should be targeted for a marketing campaign. Once that is decided we randomly remove ten percent of the target group and exclude them from the marketing the other ninety percent will receive.
After the campaign is over we then go back and measure the response, leads and sales generated from the people we marketed to and compare it to the people who should have been marketed to – but were excluded.
This provides a very clear picture of the actual “uplift” the marketing campaign generated. This particular auto group was testing very specific service marketing event campaigns. The average uplift is 120 percent. This allows them to know with absolute certainty that the program is worth it because the average sales increase is significantly higher then their initial investment.
Control group testing is one of the easiest and most cost effective ways to test. Attribution is a key buzzword. In the end, you want to know, is it worth my investment? Did I sell more vehicles, parts or service because of the marketing or not? Control group testing is a quick way to answer that.
It can be done on anything you do that involves a list.
Where to Begin
I’d start simple. First, start doing control group testing.
Then make a list of the activities or marketing you do in your dealership that produces measurable results. Include all processes where persuasion or influence are important to your success. For example; Google Adwords, sales pitches, setting phone appointments, advertising, direct mail, e-mail, etc.
Next, identify the key transitional elements in each of those activities (example: landing pages, headlines, phone scripts, lists, Dynamic Marketing Differentiators, etc.).
Then come up with at least two alternative ways or approaches to those activities. Then conservatively test these different approaches against your current “control” approach.
You’ll be surprised at how many of your new tests outperform your old standards. Or even better… how many new “great ideas” you would have normally just launched – and discovered they tested worse – allowing you to stick with the more successful standard you already have in place.
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