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Car Dealers Slow to Adopt Digital Marketing Tools; Not Sure About Social Media

Car Dealers Slow to Adopt Digital Marketing Tools; Not Sure About Social Media

It is not what ADM Professional Community Members want to hear, but we need to be aware of the perception challenges we still face and take every opportunity to overcome them...

Car Dealers and other Small to Medium Sized Businesses (SMB) are using a number of different tactics to draw new business.  This according to [download page] a Forrester Consulting study commissioned by Act-on Software, but digital marketing continues to take a backseat to tried-and-true face-to-face tactics.

 

Asked which techniques they use to acquire new customers, at least half indicated they were using 14 of the 15 identified. Leading the pack are personal relationships and networking (95%), tradeshows and industry events (89%), and in-person events (86%). Content marketing is also popular (83%), as is print advertising (77%) and PR (74%).

 

It is encouraging to see "Content Marketing" as the fourth most popular marketing tactic being used by many businesses (83%), but there is a tremendous amount of room for improvement in efficacy of strategy and tactics around content marketing that we continue to see throughout the automotive vertical.

 

The most popular automotive digital marketing tool is SEO, used by 73% of respondents. Beyond that, Car Dealers and SMBs are using a variety of digital tactics, including email marketing (72%), social media marketing (69%), digital advertising (61%), webinars (58%), and PPC (50%).

 

Social’s Worth Still Hasn’t Been Proven

The relatively low figure for social media marketing strategies and tactical adoption is surprising, and lower than in recent research.

 

Still, there seems to be a perception among Car Dealers that social media has not yet proven to be useful. For example, among the Act-On Software survey respondents using social marketing, 81% are using Facebook – but about 40% of those say they don’t know if it’s working. Similarly, 74% are posting on Twitter – but more than one-third of those are unsure of its usefulness.

 

Getting More Leads A Prime Challenge

The report – “Driving SMB Revenue in a Tough Economy” – also finds that the top marketing challenge for Car Dealers and SMBs is converting more leads into opportunities, cited by 41%, slightly ahead of closing more deals from existing lead flows (39%). What’s interesting is that marketing programs aren't being found to be prime contributors to the sales pipeline. In fact, most respondents said that less than one-quarter of their leads are attributed to a marketing program. The average contribution of marketing programs to that sales pipeline is 35%.

 

The study suggests that Car Dealers and other locally based retailers aren't making enough use of marketing automation – only about 1 in 5 said they had implemented software that automates marketing and lead management processes. That compares to 56% who have implemented CRM technologies, and is despite other findings showing a correlation between use of marketing automation and revenue growth.

 

Source: www.MarketingCharts.com

Views: 648

Tags: About, Adopt, Car, Dealers, Digital, Marketing, Media, Slow, Social, Sure, More…Tools

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Comment by Tarry Shebesta on December 21, 2012 at 7:50am

Hi Keith!

Just wanted to follow up on your previous post to see how the test went.

"I signed up with a trial good until the end of the year with one of your competitors.  Now, if it works as advertised, all I have to do is go to the owner's office near the end of December with a stack of sales generated by this vendor during the trial and he'll sign-up with hardly any questions.  Or, worse case, I pull the plug on the trial and move on.  They weren't my first choice and I'm far less impressed with their product compared to yours but sometimes my hand is forced and I do whatever I have to in order to keep pushing the envelope and getting us more sales."

I noticed you have a default payment calculator on your VDP with a starting rate of 8.2% APR. 

Thanks for the input.

Comment by Alexander Lau on November 20, 2012 at 5:37am

Not to get too far off topic, but I read a great post over at Convince and Convert, entitled:
9 Social Media Hacks I Use Every Day.

  1. Listen to Podcasts
  2. Take and Curate Photographs
  3. Read LinkedIn Today
  4. Buffer Your Links
  5. Use “if this, then that” Recipes
  6. Create a Stalker List
  7. Interact on Google +
  8. Blend Personal and Professional
  9. Quit Obsessing Over Case Studies

Especially, I appreciate their Will The Rise of the Photo Apps Kill the Written Word? article, linked above as well in #2. Looks like the verdict is still out on the question, varying results.

 

:-)

Comment by Alexander Lau on November 20, 2012 at 5:21am

If we're talking Digital Marketing in general, a great plan to follow, R.A.C.E Framework = Reach, Act, Convert and Engage.

  1. Key digital strategies: How do we want to grow our online business?
  2. Marketplace analysis: How well are we using digital media now?
  3. Objective setting: Which goals and KPIs should we use?
  4. Strategy: How can we achieve our goals?
  5. Tactics: Which digital marketing activities do we optimize?

 

As for the BS flying these days, let's face it, there are a ton of groups selling subpar digital marketing services (SEM, SEO, SM, RM, etc.). Unfortunately, a lot of dealerships don't know any better, they hear a buzz word and are convinced of an agency's expertise. Any dealership with its head screwed on straight should take the time (valuable) to do some research before signing the contract. Ralph's method for sniffing out BS is a good one. Sadly, it seems as if there are far too many grifters in this marketplace.

Comment by Keith Sponburgh on November 19, 2012 at 10:20pm

Well, now that I have completely derailed Ralph's orginal topic... :) (good top ten list below BTW)

 

Tarry, it's funny, maybe even ironic that you responded to my free trial comment since yours is a product that I am very interested in. I'll start by saying that every dealership I've worked at to date has done things differently so my hurdles may be mine alone but I doubt it.  I run a BDC here in the Chicago area and I have a good deal of control over what I spend my advertising budget on.  Since I get paid when we sell cars it makes sense to give me control over the advertising, I depend on the success of our advertising to earn a living and no amount of free lunches from sales reps will change that.  However, the owners at my dealership are about as old school as any dealer around Chicago so they have an issue where they somehow think the advertising agency they've been using for years is not completely driven by their own income.  in a nutshell, if the ad agency decides to change my advertising or doesn't like something the owner has a tendancy to agree with them.  I find it funny, in a sad way, considering I've doubled internet sales in the short time I've been there when they were stagnant before even though they've used the same ad agency all along.  So even though I can cancel vendors that under perform and sign on new vendors I have to get past the veto power of people that have a vested interest in us advertising through their preferred vendors regardless of how well those vendors perform.  A perfect example is the SEM budget since our SEM is managed 100% by the ad agency and they will fight me to the death over that budget I've had to resort to guerilla tactics and get our SEO to outperform SEM on all of their favorite keywords so we simply no longer spend the full budget on clicks.

 

So, along comes Drive It Now (as Payment Pro through Auto USA) which is a no brainer to me since I like running a department that relies on Internet sales and holds gross at the same time focusing on payments over sales prices should be the only way to go.  The problem I face is that my budget is maxed and after a lot of initial adjustments when I first started and constant monitoring since then it's very solid, we spend money on what works for us and nothing else.  If I had an underperformer to trim it would be easy, well if I had an underperformer to trim that was not affiliated with our ad agency it would be easy.

 

I did try, I put together a list of our competitors that use either Drive It Now or Payment Pro and narrowed it down to only those in our zone that either match or beat our new and CPO Ford sales regularly.  I brought examples from their web sites, examples from our sites and a healthy stack of chat transcripts where the customers were asking for payments.

 

I was shot down in less than five minutes once he looked at the price because, to him, it wasn't worth that price on something that he wasn't convinced would work.  Would a money back guarantee work?  I can't say 100% but generally, no.  To the old school car guys a money back guarantee is a gimic, something that you'll only honor if they fight you tooth and nail for it. Years of dealing with companies like Reynolds & Reynolds who will only let you out of a contract if the world ends and they don't have a way to collect it anymore have made your road a rough one to travel.

 

Today, oops.... yesterday, I signed up with a trial good until the end of the year with one of your competitors.  Now, if it works as advertised, all I have to do is go to the owner's office near the end of December with a stack of sales generated by this vendor during the trial and he'll sign-up with hardly any questions.  Or, worse case, I pull the plug on the trial and move on.  They weren't my first choice and I'm far less impressed with their product compared to yours but sometimes my hand is forced and I do whatever I have to in order to keep pushing the envelope and getting us more sales.

 

There's always a risk involved with signing on a new customer.  Some of us are more trouble than we're worth.  I guess you just have to decide if the potential loss for fixed expenses is worth the chance at gaining a new customer, it's not much different than any other way of advertising in that aspect.

 

In your case, I probably could have gotten a trial period approved with the only cost being for the credit inquiries rather than a money back guarantee, even if you added a little extra to the cost to help recuperate some expenses it's always easier with smaller numbers, you know, like a monthly payment instead of a total price :)

Comment by Ralph Paglia on November 19, 2012 at 9:29pm

With all these comments, I wanted to take a moment and identify at least ten fundamental digital marketing tools and services that SHOULD be part of most dealership overall digital marketing strategies:

  1. Dealer owned and controlled websites (more than one)
  2. Lead Management Tool or CRM application that can function as an LMT
  3. Multiple lead sources that include 3rd party lead providers (properly managed)
  4. Inventory Marketing and Listing Services (Autotrader, Cars.com, EveryCarListed, etc.)
  5. Search Engine Advertising (Dealership owned Google Adwords account)
  6. Vehicle Photography and Inventory Description Data enhancement and push sytems/services
  7. Consolidated Online Directory dealership listing and publishing (UBL.org, Localeze.com, etc.)
  8. Online Display Advertising (ODA) - But only if you want good search engine results!
  9. Social and UGC Network profile and user name secured for the dealer's brand (Knowem.com)
  10. Reputation Management; review and rating site profiles claimed and monitored

Comment by Ralph Paglia on November 19, 2012 at 9:19pm

Tarry, I owe you an apology... I am familiar with your product via Phil at AutoUSA who spoke to me at length about it prior to you partnering up with them... Also, a quick check on your website reminded me about the payment marketing aspect of DriveItNow, which as anybody knows who has ever sold cars for any length of time, payments are a HUGE issue in the car buying decision process... Like my first mentor told me many years ago "every car buyer is a payment shopper, some of them are in denial!". 

On top of all that, you have the endorsement of Mr. Kevin Frye of the Jeff Wyler Auto Group, and Kevin does not endorse ANYTHING unless it just about walks on water! So, I would suggest that the only smell I get from DriveItNow is the smell of currency, money, Benjamins... and the smell of a sold unit burning gas as it roll off the lot!

Comment by Ralph Paglia on November 19, 2012 at 9:06pm

Tarry, the first thing I look for from any supplier is whether or not they take their own medicine; for example, there is a certain CRM provider to dealers out there that uses "Salesforce.com" for their own internal CRM needs... Now, I happen to like Salesforce.com, but believe that as an exercise of confidence in your own products, you should use them whenever possible. 

A classic example was a few years ago when we launched the Ford Digital Marketing Consultant team for Ford Motor Company... At the time, there were many people on my team that wanted to license all sorts of different CRM and lead management systems.. Any of which may have been better for our purposes, but i insisted that we use "BuzzTrack" which was our in-house lead management (semi-CRM) tool at the time... Many colleagues fought me on it... Within 6 months our DMC's were experts at using the BuzzTrack software and as it turns out it was easy to adapt and worked very well for our team's needs.

If a supplier does not use the software, services or systems they are pitching to your business, in their own business, then I have a problem wit that.  It smells like BS when they come up with all their excuses why they do not use their own product!

Also, I have spoken with so-called "Social Media" gurus that do not have accounts or profiles in many of the many social networks and UGC sites that are quite effective, but not as well known as Facebook, Twitter and Google+... To me, that is a red flag, and starts to smell like BS... When I look at their profiles and see they have 4 friends on Facebook, 18 followers on Twitter and 1 subscriber on YouTube, the smell of BS gets stronger... When I look at their Twitter account and see their last update was 3 months ago, the aroma is palpable.

If somebody is truly a wizard with Google Search Engine Advertising, they will most certainly have a personal Adwords account with several years of history... When they explain that they do not have an Adwords account, because they use the "company's" super top secret bid optimization middle ware that makes Google look like a bunch of idiots, then I smell BS...

You get the picture... I have been doing digital marketing for more years than most people think it has existed, I know BS when I see it!

Comment by Tarry Shebesta on November 19, 2012 at 8:10pm

Ralph-

Agree with all your processes of weeding out bad services. I do the same for stuff that we use. :)

OK - I want to know what your BS sniff test is for our product? 

 

Comment by Tarry Shebesta on November 19, 2012 at 8:07pm

Keith-

Great comment and can definitely appreciate it. We were a user of our own product and then created a version of it for dealers and now are learning the vendor side. Let me tell you, it's much easier to market to consumers than it is dealers. :)

After trying to sell our product to dealers over time, the most spoken word we hear after they try it is "I wish I hadn't waited so long". True story and we hear it almost every time.

You ask for a free "test drive". How about a money back guarantee? There are some hard costs for a dealer to use our service, like credit pulls, and we think if a dealer wants to try it for free, how much effort will they really put into working the unique leads it produces. These are not template type leads so some extra work is needed on the dealer side. The results are dramatic though.

The other thing we have is lots of dealer testimonials (that you can actually talk to about the results they are seeing).

It is definitely hard out there to filter through all the "snake oil". 

Thanks for your candid feedback.

  

Comment by Ralph Paglia on November 19, 2012 at 7:34pm

Keith, I know what you are referring to... I have several dealer clients who pay me to review supplier proposals for all manner of digital marketing and social media products that promise to cure what ails you... Many times i am stunned that the sales rep has made it far enough to be considered.  Part of what i try to do is teach dealers and GM's how to give digital products the BS sniff test.  For example, if a company sells SEO services and you cannot find that company using Google Search... BS! If a company sells dealer websites and shows you how they can automatically generate 200,000+ pages to be indexed by Google based on every town in your state, and every vehicle you have in stock, and they want you to believe that this tricks Google into anything positive... BS!

However, there would not be so much snake oil out there for dealers to buy if as an industry we would simply stop the madness and stop buying all that crap of questionable value... For example, every website i know generates at LEAST 5 phone calls to each lead form... some are more like 7 or 8 phone calls... Yet, a dealer will refuse to dedicate resources to answering the phone while asking me about an SEO service provider from Mumbai, India at $1,500 a month... Doh!

The long and short of it is that dealers need to hire at least one qualified digital marketing professional per dealership and then authorize that person to make decisions!  There are plenty of very smart and rational people working in the car business that are highly digitally savvy, but have not been empowered.  The best dealers are putting the right people in charge and taking market share as a result.

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