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Defining Your Competitors: OEM Mandated Search Marketing vs Dealership Focus

Let's face it. Websites are becoming a commodity in the automotive world. Most quality website vendors are putting out solutions that are good enough to work well. Few are coming up with innovations that can differentiate them, and those differences are relatively small in the whole scheme of things. The difference between a good and a great website is minimal when translating it to increased sales.

 

The reason for this is that consumers are becoming increasingly impatient when in car shopping mode. It's not that they don't spend as much time doing it as before. It's that they are doing most of their research on websites other than a dealer's site and only visiting when they're ready to look at live vehicles. At that point, they're going straight to inventory or specials and deciding from there whether to consider doing business with a dealership or not. If you have the right inventory items that they're considering, a bad website isn't going to keep them from contacting you. Conversely, if you don't have the vehicles they're seeking, an amazing website isn't going to coax them into doing business with you.

 

Websites are websites. Some are better than others and have strong conversion tools, but the real arena through which dealers can move the needle is in the quality of their digital marketing efforts. One of those efforts, search engine marketing, is arguably the greatest opportunity for advancement because it translates into more visitors, more leads, and potentially more sales when done right.

 

The biggest challenge that dealers with OEM-mandated search marketing products face is in defining competition. From the OEM's perspective, a Ford dealer's competition is the Chevy dealer down the block and the Honda dealer around the corner. They want search exposure that can take sales from the other brands. This is a good and noble cause, but unfortunately it's not the most practical target for individual dealers and dealer groups.

 

From the perspective of the Ford dealership itself, their primary competition isn't the Chevy dealer and the Honda dealer but rather the other Ford dealers in the area. It's how they're graded; we all see reports every month that tell us how we're doing against other dealerships in the area that sell the same brands. It is for this reason that OEM-mandated search marketing, as affordable as it is, simply isn't the best way to improve sales. At the dealership level, the lowest hanging fruit for increased business is by taking sales from the real competition, namely the other Ford store a few miles away.

 

As mentioned, there is one advantage to the OEM-mandated search marketing: it's cheaper. It's often paid for in whole or in part and can act as a check box on your marketing. "Yep, we're doing SEO and PPC. The OEM is taking care of that for us."

 

Unfortunately, that's really the only advantage. It's designed in most cases to keep every dealership inside their own little box. Reaching outside of the direct market area is a no-no for companies that work for the OEMs. In fact, they're goal is to keep the boxes neat and tidy.

 

When the search marketing is focused at the dealership level, it's a completely different strategy. The goals have changed; it's not that a Ford dealer doesn't want to take market share from a Chevy dealer, but that's a heck of a lot harder than taking a deal from the Ford dealer down the road. Let's say there's a dealer in a small town a few miles from you. They're the only Ford dealer in that town. Everyone in town knows them. When they want to do business with that dealership, they'll search for the dealership by name.

 

Consumers who search for the dealership by city are looking for an alternative. They know about Bob Ricky's Toyota in the heart of town. If they do a search for "Somewhereville Toyota Dealers" or "Toyota Dealers Near Somewhereville", you'll want your dealership to pop up. People that do searches like that are trying to find someone else from which to buy their Toyota. If they wanted to buy from Bob Ricky's Toyota, they would have searched for "Bob Ricky's Toyota". They didn't. They want someone else. They want you. If you're ranked for that search, there's a good chance they'll check out your website to see if they can do business with you instead of Bob Ricky.

 

Unfortunately, the OEM-mandated search marketing products aren't designed to help in this regard. In many ways, they're designed to prevent this from happening.

 

If your goal is to beat the competition, your competition, then don't look to the OEM's search marketing company. Don't just check off the search marketing box and call it a day. Explore your options and see if there's a way to improve your search marketing to focus on helping your dealership the best way you can, by being aggressive and getting your dealership in as many relevant searches as possible.

Views: 769

Tags: Dealership, OEM, SEO, Search Engine, Search Engine Advertising, Vendors, car company, search Marketing

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Comment by Adam Barish on December 9, 2012 at 7:05pm

Well summarized and agreed with!

Comment by J.D. Rucker on December 9, 2012 at 3:57pm

Replying in reverse order from the beginning. To all those I don't reply to, thank you for the comments. I'm just going to address a few of the issues that were brought up in this thread...

JOE - If you're talking about the really, really small dealers selling fewer than 20 cars a month, I agree. If you're talking about the smaller dealers selling 50 cars a month that are in an area where they have an opportunity to sell more cars if more people were aware of them, then I would say that the extra 1-3 thousand dollars a month to run a good marketing campaign is worth a try. It may not prove to be effective. They may not sell more cars as a result. But if they are able to bump their numbers by 4 or 5 units, it's worth it.

BRIAN - Yes, yes, and yes. There are too many dealers large and small that do not want to waste money going to conferences like DD, DSES, AutoCon, and DMSC, yet it makes me ill when I see a blown up gorilla on their roof or a huge billboard along I-95. I'm not saying that every dealer should get additional help with their digital marketing beyond what the OEM supplies. It's not for everyone. I just want them to make the decision based upon data, trends, and best practices rather than take on the mentality of "I'm too small" or "I know in my gut that it's not worth the money."

ADAM - At the dealership level, you're absolutely right. People considering an Accord are possibly considering a Camry as well and the notion should be to sell the value of the product and the dealership once they're in the store. When they're out there searching the web, taking care of the local market should be handled regardless of website provider or search marketing firm. That's the easy stuff. Those who want to expand their business should strive to be the alternative when a competitor 30 minutes away isn't taking care of business. Somebody is the alternative - no dealer owns all 10 spots on Google when people search for their brand and city. Dealers who want to be the alternative in their competitors' local markets need to expand their reach. That's not to say there's any value in grabbing search terms for dealers 2 hours away, or even an hour away in many competitive markets, but being present for anyone searching within a realistic search radius is simply not done properly by OEM search products.

Chip, Tom, Chris, Joe, Martin - excellent points across the board.

Comment by Tom Gorham on December 9, 2012 at 1:14pm

Chip, you are right.  If Honda has 20-25 dealers in Chicagoland and Chevy has 50-60, who are the Honda dealer's competitors and who are the Chevy dealer's competitors?  Not apples to apples.

Comment by Chip Dorman on December 9, 2012 at 9:09am

Don't let the experts ruin our already non-existent profitability because they think more is better?

Hmmmm.

If I was a Honda dealer in this market with non-existent profitabliity, I'd have JD on a plane, Ralph in my office or Brian shooting his next Starbucks coffee video from New Jersey on Monday.

You should be killing it.

Comment by Tom Gorham on December 8, 2012 at 5:53pm

Joe, I appreciate your compliment (blush) and I certainly have no problem with the words OEM endorsed.  I have a problem with mandates that punish dealers who don't use the OEM "endorsed" companies.  This creates a one-size-fits-all situation AND a monopoly that restricts creative competition.  History has shown that monopolies crush innovation and creativity.

Dealers are the lifeblood of creativity and innovation.  Their very lives depend on it.  I'm not a young man, and I have never in my life seen people more focused on finding unique ways to "get them in" than dealers.  You don't do that by being "just like the next" McDonalds.

Comment by Joe Webb on December 8, 2012 at 5:26pm

Tom - Would you say you are the average Internet manager?  I don't think so, and neither will anyone else on the forum.  Great Internet Managers who study, monitor, and engage like yourself have a leg up when choosing, managing, and measuring vendors.  However, the "average" Internet Manager doesn't have the pull to make the decision of vendors OR have the deep understanding of offerings or deliverables to make a qualified choice.  While I know that it is possible to garner better results with less expensive, third-party vendors, it doesn't happen often for the majority of dealerships.  You are an exception to the rule, my friend, so I stick by the fact that OEM-endorsed digital vendors can be a nice shot in the arm for dealers unwilling to dedicate themselves digitally just yet.

Comment by Tom Gorham on December 8, 2012 at 5:19pm

Joe Webb, I appreciate your point of view, but as an Internet Sales & Marketing Manager, I've found I can get better results from an outside company than the OEM mandated company for less money.  The point is, as JD says, "are you marketing for the OEM or for the dealership?"

The OEM mandated service WILL personalize your marketing more IF you buy a higher package and allow you to compete against your same-brand competitors.  Otherwise you are promoted as a bland, same-as-it-ever-was, one-size-fits-all dealer promoting the brand.

Adam, you are right , of course that we need to promote our brand over the brand next door, but if you're area is saturated with same brand competitors, I think you had better differentiate yourself from them.  It's much harder to make a buyer change brands than it is to make them change dealers.

There really is no one-size-fits-all strategy for marketing your dealership.  And that is the problem with OEM mandated marketing strategies. 

 

Comment by Chris Hanson on December 8, 2012 at 2:19pm

Nice post JD.  I think the underlying point here is that just because its an OEM program or a strategy from the latest greatest digital company - be involved!  Just because its an OEM program doesn't mean you don't have any say (yes, some are limited).  Ask, ask, ask.  Call, call, call.  Hold them accountable.  Be a part of what is going on.

And OEM's strategies and requirements really vary from one OEM to the next.  We manage lots of campaigns for dealers that qualify for different manufactures co-op.  Each one has different requirements so we just work within them and get the results for the dealers.

Well said Joe.....yes, in many cases it allows for a dealer to afford larger budgets or "a" budget.  And its even great for dealers who spend a lot on digital because some of the percentages that they can get back from the OEM is HUGE.  Try to do your own thing going that doesn't qualify and see how that stacks up.

I agree with everything you said Adam......and I really like "Focus on your market, keep your customers happy, communicate with them, and watch your grosses and customer retention rise".

Comment by Adam Barish on December 8, 2012 at 10:53am

JD, you make some great points. However I still try to get my people to think of the competition as the Toyota dealer next door.  For certain, as a Honda dealerz that is where they are going next. I have to capture the prospect's excitement, sell the product, sell our store and sell the salesperson.  If I miss any of those and the Toyota salesperson does even slightly better on any of those points the prospect will be driving a Camry or Sienna instead of an Accord or Odyssey for sure.  We as dealers do ourselves a disservice when we think of our competitors as our own brand.  When I look at the market share report I often lament if other Honda dealers would just take care of their back yards, we would all have higher grosses, we would all maintain our same volume and customers wouldn't have us competing to give a car away.

When we bid on each others names in adwords we just drive up our own CPC.  Advertising expense rises.  We all know a dollar saved is a dollar earned!  A good website can be good or great as you say.  A bad one might not capture an opportunity, but it's splitting hairs.  The key is of course answering the email lead in a timely manner, answering the phone calls effectively and making the conversion when the ZMOT comes. All the analytics in the world can't help a poor system.

SEO is getting a little crazy.  Have you looked at some of your competitors websites lately? Even your own if it is being managed by someone else...The goblety g*** at the bottom is a huge distraction.  There are other ways to get the meat on the page via lighter text colors, scroll-able boxes, but we are cluttering up our virtual showrooms! WE are getting foolishly greedy in attacking the markets of distant neighbors.  How foolish are we to include counties and competitors far from us just because we wish a customer would come to us from an hour away to beat us up so we give away a unit to a customer who will most certainly NOT return for service. Where is the logic?  It's the SEO specialists and gurus that employ these tactics.  They don't understand our business, the time it takes to get a customer in the door, build rapport, work the deal only for a distant customer to go back to the local dealer and have them beat the deal.  Isn't it the truth?  Don't let the experts ruin our already non-existent profitability because they think more is better. 

My final wordds.  Focus on your market, keep your customers happy, communicate with them, and watch your grosses and customer retention rise.

Comment by Chip Dorman on December 8, 2012 at 9:38am

When it comes to a dealer's website, and evaluating website providers, the biggest mistake is to think of it as "a" website. The truth is, dealers need to think of 5 websites.

1. The website on a desktop computer.

2. The website on a laptop/netbook computer.

3. The website on a cell phone.

4. The website on a tablet.

5. The website on a large flat screen TV.

If a dealer's website doesn't work for customers across all of these devices/screen sizes, it's going to impact sales throughout the entire dealership. Big time.

Dealers need to understand the technology stack required to pull this off and choose wisely.

And that's just to design, build, maintain and deliver their "website". Each of these websites also come with their own little idiosyncrasies that need to be taken into consideration for useability, SEO, PPC, etc.

Any dealer in a competitive market who is relying on traditional marketing is operating inefficinetly and presenting a huge opportunity to their competitors.

Whats worse is what happens at the regional or tier 2 level.

Think of all the money being wasted on traditional marketing at that level that could be put to better use. A bunch of dinosauer dealers, with an insane amount of money they have to spend, voting collectively about how to spend it, is not a recipe for success.

If that money was repurposed to digital marketers who really knew what they were doing it would be a blood bath for any OEM, Dealer Association or Dealer trying to fight it with traditional marketing alone.

 

 

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