marketing

Is your Internet Business Prepared for a Recession?

Published May, 2008 by Digital Dealer Magazine

You have heard a lot of rumors circulating about a recession in the United States. Whether it is true or not is a moot point. When I sat down to ponder this question I was hit with the concept that you should always be operating your dealerships as if you were in a recession and make sure every penny is accounted for while trying to squeeze everything you can out of each and every department, including the Internet.

Today I want to focus on your Internet business, which I break down into a couple of sections for ease of analysis.

Web sites and technology
I look at this section of the business as a rock hammer to a master mason. These are the tools you need to shape our business and achieve your desired outcome. What is most important is that you have the right tools in place and you are maximizing the utilization of the tools each and every day. There are great technologies out there that do all sorts of interesting things, but as my fiancé told me when we moved in together, “If you haven’t worn it in a year, throw it out.” I thought that made good sense or maybe she just wanted more closet space; I will never know. But in our business when you are not utilizing a specific technology or tool by 75 percent or more you are not getting the most out of the technology. So maybe it is time to try to live without it or get busy increasing your utilization of the tool. A great dealer friend of mine has always brought up a good point when referencing technology. He comments that 15 years ago we didn’t have any of this stuff, yet now I have all this great technology, but wonder whether it is really helping me sell more cars or just keep pace with the local marketplace.

Marketing
When was the last time you sat down and looked at your entire marketing spend and dissected it? I mean all of it. I walk into stores so often that they tell me they are spending 25k, yet after I go through the dealership doc I find out they are really spending about 40K because things are not being put into the advertising line of the statement correctly. Sometimes I hear that it got charged to this account because of this reason or that one goes there because of that reason etc. Is it advertising? Charge it to the right account. When you can get a complete 360 degree view of your advertising expenditures you can start to really focus what you are spending and where to help you create a more accurate cost per unit retailed figure.

Also, take the time to know what you are marketing and the messages that you are using. Are they in conjunction? Do they conflict? Your business is dependent on your ability to reach people in the marketplace and entice them to take action. Is your marketing doing that for your dealership?

Customer communication processes
This is one of the most overlooked and important areas of the Internet department. I know you set up your follow-up schedules when you first set up your CRM and you don’t think you need to tinker. As consumer buying habits mature online so should how you approach and manage these relationships. I would set up and print every letter in your CRM monthly and make changes. Also, change follow-up schedule length and timing. You would be amazed at how a few key tweaks can open a flood of activity within your existing lead management tool. You would be shocked that I still walk into stores that are using subject lines in their e-mail marketing and customer correspondence that I guarantee will be triggered by spam filters. Yet all you have to do is look online to see what words are triggering your messages to get spam-boxed and make sure none of your e-mails are using any of these keywords. Get involved; roll up your sleeves and dive in. Your business depends on it.

People capital
This area is still the one most dealers, including myself, struggle with almost daily. Finding the right people to execute the vision is another key piece of this puzzle to recession-proof your dealership. People are assets and must be trained and consistently driven to improve the dealership’s bottom line. Which means involving your team with not the typical, “We don’t have enough units out speech” but a much more hands-on approach to how their specific actions or inactions are affecting the operation. When people are genuinely brought into the picture a new level of teamwork happens. It takes a while but is well worth the effort. Take stock of your team and make sure your vision and message is being transferred throughout the dealership.

Today’s dealership challenges are difficult especially in the ever-changing Internet department, but with a little extra effort and some basic analysis you can watch your Internet sales grow: rain or shine, or recession.

Todd Smith is one of the leading authorities on Internet technology and its utilization in the retail automotive industry. For the past year Smith has been the general manager of a Northeast Chevrolet dealership putting into practice all the techniques he teaches. Lear, LLC, Smith’s consulting company, is focused on leveraging technology to enable other dealerships to sell more vehicles at a higher gross profit while reducing customer acquisition costs.

Source:

http://www.digitaldealer-magazine.com/index.asp?article=1906

American Made?

In our increasingly flat world, where the international marketplace is the only marketplace, it’s becoming harder and harder to define exactly what “American Made” means. And nowhere is the issue more confusing than in the automotive business. Is a Ford made in Mexico an American car? How about a Toyota that’s manufactured in America?

Difficult questions, obviously. How are you positioning such things to your customers? Is “American Made” as important to them as it was 20 years ago? Do they even ask?

D. Jones
Marketing Strategist/Creative Consultant
SmackDabble, LLC

Experimenting with the Devil

It’s been said, “the devil is in the details.” Which means, of course, that the difference between success and failure is often something small and seemingly insignificant. This is absolutely true when considering the effectiveness of your dealership’s marketing. Try experimenting with the following little details and you may realize some huge gains in your return on investment.

Timing. Sending your email campaign out first thing in the morning? Try mid-afternoon or midnight for different results. Or trying sending the message on a different day of the week or time of the month. All of these things will make the difference.

Personalization. Have you made an effort to make your direct marketing personal? Does that personalization stop at “Dear John” or are you using everything you know about a prospect to make their communications specific to them?

Email Formatting. Not all emails are created equal. You’ve got the full graphic and multimedia capabilities of HTML or the more traditional, potentially more personal, all-text email. They each have their place. Experiment with when and where you use each format to try and maximize results.

Offers. Which drives more traffic? $500 customer cash or 1.9% financing? How about a $50 bill just for test driving? How about $100? These little details can make a huge difference.

Expiration dates. Trying to drive immediate response, toy around with a 24-hour-act-now offer. Or try stretching it out to 3 or 4 weeks. Again, different timing will drive different responses from different customers.

The difference between mild success and rousing, ring-the-bell success can be found in these little devilish details. Experiment with them and you may very well find the results you’ve been looking for.

D. Jones
Marketing Strategist/Creative Consultant
SmackDabble, LLC

Why now is the Time To Step Up Lead Efforts

Published: June 05, 2008, iMedia Connection

With consumers tightening their purse strings, it’s more important than ever for marketers to reach out to potential customers with relevant offers they can’t refuse.

Debate continues in the media as to the fate of the U.S. economy: Are we in a recession, or merely flirting with one?

For brand marketers, it turns out, the effect is the same. Consumers, made wary by gas prices over $4.00 a gallon, the mortgage mess and less-than-stellar employment forecasts, have tightened their purse strings. And when consumers spend less, marketing — traditionally a company’s first budget-cutting line of defense — is in trouble.

Yet there is much evidence, scholarly and anecdotal, that points to the wisdom of maintaining marketing spend during a recession. In fact, a recession is an ideal time to take advantage of consumers’ comfort with familiar brands by creating web-based interactive, direct-response campaigns that offer special promotions and savings.

Why web-based? A recent report by the Pew Internet & American Life Project reveals that 81 percent of internet users research products online — for convenience (78 percent), time savings (68 percent) and the ability to find bargains (ranging from 38 percent of 50-to 64-year-olds to 62 percent of 18- to 29-year-olds).

Tough economic times not only lead consumers to do online research, they lead to more time spent researching and comparing brands and prices. A recent Prospectiv survey, which discovered that 84 percent of those polled had changed their shopping habits due to concerns about recession, gives further clues to consumer behavior in this economic downturn:

66 percent are logging more hours online researching and comparing brands and prices
74 percent would welcome more online offers, coupons and e-newsletters from their favorite brands and products
60 percent are more likely to sign up/join a website or online community that offers recipes, healthy meal ideas, cooking tips and savings they can use at home

As consumers under financial pressure ponder a switch from favored brands to generics, brand marketers must seek out ways to engage consumers online, using direct-response interactive marketing to reinforce the value of brand.

We strongly believe that marketers should consider countering the effects of the downturn by stepping up programs that build strong relationships with consumers who have exhibited interest in your goods and services. Take the opportunity to add to your in-house opt-in email newsletter list and reach out with these tips:

Consumers are eager for special promotions and savings during tough economic periods — now is the time to consider a brand-building campaign.
Consider campaigns designed to generate leads as well as near-term sales. Whether you have a brick-and-mortar store or website, use a well-timed, anti-recession campaign to drive traffic.
Provide information that’s clear, relevant and easy to find online. The Pew study found that 43 percent of searchers were frustrated by a lack of information, or the difficulty of finding information about brands they were interested in. Another 32 percent were confused by the information they were able to locate.
Be selective in your programs. Market only to consumers you identify who have an interest in your product/brand and have requested your offers and promotions.
Be aware that some 70 percent of internet users are still concerned about giving out personal information or credit card information online. Treat your customers with care — many of them are wary.
Monitor campaigns closely for performance and redirect your efforts as needed to improve results.
Consider using pay-for-performance lead-generation programs. You’ll pay only for results, versus clicks or impressions.

Don’t forget the most important metrics of a brand campaign — quality and relevance. In difficult times consumers aren’t shopping for nice-to-haves; they are focused on must-haves. Here, pay-for-performance lead-generation campaigns that build your own opt-in email lists and produce consumers who are interested in your product and brand are particularly useful because they make it easy for marketers to ensure relevance, and simple to measure lead quality at several points in the campaign, before handoff to sales.

Finally, in a down market brand marketers must maintain a laser focus on lead-generation best practices to ensure high quality leads and maintain a respectful relationship with consumers to build trust and discourage abuse of consumer privacy.

Opportunity for brand marketers comes in many forms. In these unstable economic times, it is incumbent on marketers to reach out to consumers with offers, promotions and information that reinforce brand preference, provide much-needed purchase information, and offer advice, tips and ideas for living well while saving.

http://www.imediaconnection.com/content/19521.asp

What is the future of e-mail?

From eMarketer, May 27, 2008

An old digital format still has plenty of life left

Compared with today’s virtual worlds, e-mail is solidly Web 1.0—an almost archaic communication channel.Yet e-mail works, and marketers and advertisers keep putting it to new uses. Moreover, consumers—whose opinions are the ones that matter—genuinely like e-mail. Nearly three-quarters of adult e-mail users in North America said they used it every day, according to an April survey conducted by Ipsos for Habeas.

Two-thirds of adult respondents said they preferred e-mail for communicating with businesses. Just as many—and this is the important part—said they expected to still prefer e-mail five years from now.

Mode of Communication Preferred by Adult Internet Users in North America When Dealing with Businesses, April 2008 (% of respondents)

“Far from being eclipsed by Web 2.0 and other emerging communications methods, consumer expectations suggest that e-mail will be the workhorse channel around which future online communications will revolve,” said Des Cahill, CEO of Habeas, in a statement.

That is not to say that consumers are ready for random, untargeted e-mail. Opt-in is still key. Consumers are even willing to help marketers custom-tailor their messages. More than 88% of respondents said they would like more choices in e-mail content and frequency, including options on advertisements and special offers.

So if e-mail is set to remain a consumer favorite for the next several years, that must mean e-mail ad spending will grow during that time, right?

Yes and no.

eMarketer predicts that e-mail ad spending in the US will hit $492 million this year, then increase by 55% to $765 million by 2012.

And while e-mail accounts for only about 2% of all online ad spending, eMarketer predicts that percentage will actually drop to only 1.5% of online ad spending in 2012, despite the growth in dollars spent. The amount spent on other formats will dwarf what is spent on e-mail, thanks to its low cost.

E-mail is cheap marketing. The pricing scales well, too: The cost of sending a million e-mails is little more than the cost of sending a thousand. However, this can also cause problems.

“E-mail is so inexpensive that it lulls many marketers into underestimating its influence on entire campaigns and a company’s brand,” said David Hallerman, senior analyst at eMarketer.

http://www.emarketer.com/Article.aspx?id=1006334&src=article1_newsltr

Weekly ISM Checklist

from drivingsales.com, posted 6/3/08

Now for the weekly check list. ISMs need to be completelting these items on a weekly basis and reporting to their management on their progress of each of these items. Following this task list regularly will greatly increase your success:

Weekly Check List

Date _______

1. __ Visit dealership website. Call toll free and other phone numbers to ensure they’re working and being answered properly.

2. __ Check AutoTrader, Cars.com, UsedCars.com, and/or other third party website photos, pricing information, and phone numbers.

3. __ Blind shop competitors selling both similar and different makes and models.

4. __ Post any upcoming Events and Specials on website. Be careful about posting any future discounts or pricing – those should be only posted once they are on, or when they are about to end to instill urgency.

5. __ Schedule broadcast email once per month, at the beginning of the third week of the month. Preferably, send on Tuesday or Thursday afternoon. Always have something for the customer first and foremost â€“ give them a compelling reason to open your email.

6. __ Schedule automated targeted email campaigns to existing customers, including interests, specials, birthdays, etc.

7. __ Check with vendors to see if there are duplicate addresses they are sending leads to, to former employees, etc..

8. __ Test templated emails to see how they are arriving to customers.

9. __ Check your site for manufacturers compliance or non-compliances issues.

10. __ If you find any issues, send an email to your vendor (so you have it in writing), cc-ing your GM or ID, and immediately follow up with a phone call. If the issue is not resolved in 24 hours, re-send the email, and cc you GM or ID. They should take it from there.

Following these processes and checklists will help you maximize you efforts and success! Good luck.

http://drivingsales.com/blog/rafi/2008/06/03/weekly-ism-checklist/

What’s With the Yelling?

I’m not sure why it took so long for me to notice, but it finally occurred to me that the preponderance of dealership radio and television spots feature aggressive, excitable spokespeople ranting at 180 mph about the great deals available at their store. Each dealership seems to be trying to out-yell the next. It’s like all dealership spots are written by a roid-raging Dick Vitale.

Why is this the prevailing tone of dealership ads? Has anyone out there tried something different and been successful? Is this the prevailing tone simply because everyone’s afraid to do something different? Or is it truly the best and most surefire way to sell cars?

One of the prevailing tenets of marketing is to set yourself apart and find a voice and position that you can own. So is there anyone out there who is whispering and being effective? Anyone?

D. Jones
Marketing Strategist/Creative Consultant
SmackDabble, LLC

7 Strategies for Marketing in a Downturn

Published: May 22, 2008, from iMedia Connection, by: Guy Maser

The following tips will carry your company through the lean times and beyond.

In a challenging economy, you must find new ways to make marketing work more effectively, get more out of marketing investments, and measure and account for marketing decisions. In short, you must make changes. Doing the same things in an uncertain economic environment and expecting the same results is, at worst, a definition of marketing insanity. At best it is a flawed strategy.

How can your company be one of those success stories that market and grow their businesses during challenging economic times? The following strategies will help you allocate marketing investments to better performing programs that will carry your company through the economic downturn and beyond.

Get targeted
A fundamental but sometimes overlooked marketing tenet is to “fish where the fish are.” In other words, invest in those specific, targeted media where you know your customers and prospects will be exposed to your message.

Research shows that virtually all engineering, technical and industrial professionals now use the internet throughout their work process. The same holds true in most B2B markets. But the internet is vast, and the fish you are looking for may be using specific websites where the content is directly related to their information needs. Work with your media partners to identify and target those sites.

Measure performance
While it’s always the right time to purge marketing programs that don’t perform, it may be time to scale back any marketing plans whose results you can’t measure or are unsure about. In other words, re-allocate and “right-size” marketing budgets to measurable programs. Online programs — which are built around delivering visibility, impressions, clicks, leads and customers — are easy to measure.

Think integration
Integrated marketing means your marketing strategy takes advantage of multiple media, resources and customer touchpoints to create a whole that’s greater and more effective than the sum of its parts. The more that marketing efforts are integrated and comprehensive, the greater impact you can achieve in gaining visibility in your market, qualified leads and sales.

Maintain frequency and consistency
The benefits of regular visibility in the market tend to compound over time as more prospects recognize your company. This improves your opportunity to get on a prospect’s short list of potential vendors and also shortens the sales cycle. A consistent online presence where your customers and prospects are looking for information — including websites, directories, search engines and e-newsletters — will help your company stay visible as well as provide measurable lead generation benefits via online contact.

Push and pull your way to success
Most marketing can be classified as either push or pull: companies push their message out through tactics such as direct mail, advertisements and e-newsletters; and they also establish a presence in online directories, websites and search engines to pull customers in real-time when prospects are searching for information, products and services like those your company offers. Rather than struggling over whether to allocate resources to push marketing or pull marketing, seek out a media partner that has your target audience captive and can offer both push and pull programs under an integrated program.

Focus on quality over quantity
If marketing efforts focus solely on quantity over quality, fewer leads will convert, more sales resources will be wasted, and sales people will begin to distrust marketing’s lead generation programs. Commit to programs in which quality is a key attribute: programs that can deliver interested prospects, provide prospect contact information and offer reports of program performance.

Seek assistance from media partners
The economy is likely forcing you to make harder and smarter decisions about allocating budgets. While you may be facing challenges, you don’t have to face them alone. Ask media partners to demonstrate how their marketing solutions help your company achieve the strategies mentioned above.

Ask them:

Do they have your target audience’s attention?
Can they keep your company visible to prospects and customers at all times?
Do they offer a variety of integrated marketing solutions aligned with your goals?
Can they provide both visibility and lead generation?
Do they deliver targeted, quality leads with full contact information?
Do they provide reports you can use to measure the performance of your marketing and justify your marketing investments?

During challenging times or when things are going well, marketers need to clarify goals and create tailored, integrated marketing solutions that complement the current media mix and extend their companies’ ability to compete and win business in the market. Utilize a wide range of digital media advertising and marketing solutions. Consider keyword ads, email marketing, searchable product catalogs, banner ad networks and industry-leading e-newsletter advertisements. Figure out the right combination and you will deliver the right message at the right time to the right audience and integrate with your traditional marketing efforts.

http://www.imediaconnection.com/content/19318.asp

Watch for Personal Bias

As marketers, we’re constantly building, tweaking and adapting our marketing plans in an effort to maximize the return on our marketing investment. In doing so, we have to make judgments about which tactics will be most effective. And that’s where, if you’re not careful, mistakes can be made.

One of the most common mistakes I see marketers make is to forget a simple truth that should be obvious. That truth is this: You are not your audience. It’s the same mistake that causes us to buy birthday gifts for our friends that are actually something we’d like, rather than something he or she would enjoy.

You are not your audience. It seems obvious, but forgetting it can have profound implications. Just because you personally don’t respond to direct mail, watch Channel 8 News or like the color red doesn’t mean that’s not the right solution to your marketing challenges. Learning what personal biases you may have is important when designed a campaign meant to influence other people.

So, trust your audience, trust past results and trust the numbers… they won’t lead you astray nearly as often as your hidden, personal biases.

D. Jones
Marketing Strategist/Creative Consultant
SmackDabble, LLC

Dealing with the Big ‘R’ — Recession doesn’t have to be what it’s feared to be

by : Jim Richter
From: Dealer Fixed Operations Magazine April 2008

A recession is kind of like the common cold; it’s a natural phenomenon, it happens every so often, it’s usually not life threatening, and if you’ve taken reasonable precautions it usually is just an inconvenience. Those who don’t take care of themselves can get pretty sick, but the ones who are in good health to begin with usually ride it out with a minimum of pain and suffering.

Get past the fear!
A recession is a normally occurring correction in our economic cycles. We’d all like to think that our market will continue to climb forever, but that’s not the way things work. When the economy is too good to be true it slows itself down until it levels out and gets ready for the next charge forward again. Dealers who have not prepared for this get hurt; those that have will simply have a downturn for a short time period. If the core profit centers of your fixed operations are sound and fixed absorption is high, then the worst scenario will be fewer profits coming from the variable-based profit centers. Many of my clients have learned this lesson from previous cycles and are better prepared for this one. Others with short memories, who focused their efforts on the quick money from sales are not prepared, and will end up suffering losses again as a result.

Putting basics in place
The first thing to do, if you haven’t already, is to get your parts house in order. Service and collision both feed from your inventory and the more you are counting on them to provide needed revenue, the more important the levels of service from parts become.

Clean up obsolescence: Remember your parts inventory is all net working capital. At a time when cash becomes a critical factor make sure it’s all usable. Factory based opportunities must be utilized effectively. This means sending back everything you can and applying purchase discounts to scrapping rather than gross profit, which saves tax payments. You’re only kidding yourself if you hang onto this stuff; junk today does not turn into gold tomorrow, it’s only Fools Gold at best.
Control the backflow of unsold service special orders and police returns from wholesale accounts and your collision center. Review your special order policies and procedures. I often find that these are not being enforced or have never been communicated to new employees. Don’t assume that they are working, Check it out! Contact me if you need to know how to do this.
Review the DMS settings for stocking levels. Many manufacturers have changed their terms and conditions since the last recession and many managers have not adjusted accordingly. If you’re on multiple weekly orders, or better yet a daily stock order, be sure that you are not stocking more pieces than you need. If they have it and you can replace what you sold today tomorrow, how many do you really need to stock? Frequently it’s only one.
Cut down on sheetmetal, especially if you can replace it quickly and reliably. This kind of “comfort stock” can tie up a lot of cash.
Make sure that you are aggressively developing a broad selection of valid stocking numbers through proper use of the lost sales function. Every job that gets finished today is one less special order, and you get paid today, not days or weeks later. It also reduces unapplied time in the shop and reduces work in process, all of which impacts your retained profits.

Review marketing strategies
Recessionary markets become very competitive. Just like the big box retailers are now experiencing, customers are looking for more cost effective ways to get what they need. Price becomes more of an issue than it had been before.

Review your matrix formulae and price levels. If the revenue levels are dropping and the gross profit percent is still high, you may be pushing business to competitors. Shop yourself on specific parts that are down in sales to see if you are still competitive. When that’s done, adjust your DMS price settings to bring yourselves back in line with the market. Revenue flow is the critical issue now and it’s OK to give up some margin to pick up increased dollars. When the economy comes back you can readjust it then.
Update your maintenance menus. The dollar has been taking a dive recently and most importers have been adjusting their prices accordingly. The market shopping exercise you did should also lead you to where you need to re-price parts used for scheduled maintenance. Once this is done get it to service so they can do their update and get competitive prices in effect in the service drive.
Get more aggressive in communicating with your customers, especially the wholesale ones. Just like your prices, the aftermarket has gone up substantially too. Much of what they stock has offshore origins so their prices have gone up as well.

Get ready for the ride
Once you’ve got your basics in place you have to watch the business flow very closely and adjust accordingly. If you have the basics in place, then you should be able to ride out the storm. It’s very much like the person who takes vitamins and extra precautions during the flu season; hopefully he or she won’t get sick, but if they do it’s usually a lot less serious for them than the ones who are not prepared. Get going now!

http://www.dfo-magazine.com/index.asp?article=1897