Monday, 9 January 2012

Same Planet...Different World

We all live on the same planet, but there are two different worlds. In one world, automobiles and online transactions are so plentiful a consumer can choose from hundreds of automobile dealerships within a few hundred square miles from their home. On the side of the screen there are also two types or groups of dealerships that also exist in two very different worlds.  Let's take a closer look.

Group A - Traditional Dealership
Built on Tradition
- deep history in the community, often family owned and run with solid hiercharchy
- relies on referrals from local community and past customers
- has advertised in traditional media outlets and allocates all marketing dollars to such
- resisted online initiatives, dabbles in social media, 
- has very little focus on merchandising properly for internet sales to occur.
- very little effort or resources are allocated to a focused effort to grow online strategies due to reliance and skeptic view of the explosion of the online business environment

Group B - Dealership that embraces Online Initiatives

Built on Innovation
-involved in the community, ownership group embraces technology, duties are specific to skill set of employees rather than hierarchy
- cultivate all types of leads, referrals, past customers, third party websites, Virtual brochures, QR codes, text campaigns and all social media platforms are included in customer cultivation plans
- traditional media is complimentary to the online marketing, very congruent and fluid plan.
- focuses on Step #1 Merchandising all vehicles with 30 to 50 photos, Video, Text descriptions and accurate vehicle data. 

photo from CIADA INSIDER Magazine January/February 2012 

Traditional dealerships have yet to embrace that consumers are no longer traditional customers. The way in which consumers acquire new products has evolved.  Walking through shopping malls visiting multiple stores, driving from dealership to dealership, scouring local papers, sorting through flyers, reading billboards, watching TV ads and even phoning friends for advice is trending away from the marketing strategies of traditional retailers to the favor of retailers that have embraced the new methods of advertising online.

The question I ask of most dealerships is where do you allocate your marketing budget?

Nearly 80% of the time the response is a clear - Radio, print and TV.

And 80% of the time I have to wonder what is it that holds most dealerships back from making the transition to the new era - the new age  of transactions that start online.  New age dealers have adjusted their old habits of spending the regular $30k,$30k and $50k per month on Radio/Print/TV and allocated this money to online and full BDC teams.

The internet is not losing marketshare or slowing down in favor of R-P-T is it?
The explosion of mobile devices, use of commercial satellite radio, free organic video streaming sites, popular uprising of social media sites, the surge of on-the-pulse webmedia site  and Generation Y-Zer's online appetites can't be forecasted to crash like the housing market and stock markets? I personally know some dealerships that spend over $125K per month on R-P-T (Radio/Print/TV) and have no way to tell what the return on investment was, other than if we don't do it we see a drop in traffic to our store.

Are Big R-P-T budgets really necessary? 

 They are if S.M.A.R.T e-Marketing budgets are not in place.  Budgets that may seem unacceptable in size ($25K per month) are worth their weight in leads, conversions and true trackable ROIs if well thought out and executed properly.  I am not saying grass roots marketing should be completely abandoned, but more effort is needed to become a core pillar of dealership business.  R-P-T budgets are no longer than driving factor in building credibility and trust with consumers.  Consumers now do more research online than they do in the store.

The NEW PERIODIC Table - a product of the Innovation/Invention of the Internet 

Check out this link to understand the new periodic table that Generation Y is now consuming and building careers around.

The maturation of the Internet has created some permanent side effects.
The Internet has created eternal consumer skeptisms in retailers.  Fine print, misleading advertisements, bait & switch tactics, loss leader ads and TV commercials are no longer the Primary stimulus of consumerism. Online advertising has taken that position away and can be very successful if a merchandising strategy is executed well.

The Internet has given consumers a shield to hide behind while they search for transparency.  Consumers can uses junk email addresses to fish for deals, use the power of the "CLICK" to move on to the next item and read more text, watch more video and view unlimited images to avoid a live salesperson and their perceived antics.

The Internet has killed the need for endorsements and attaching brands to celebrities, athletes and even owners of businesses.  Gone are the days for the need of Studio quality photos, $50 million dollar commercials, celebrity appearances and huge endorsement deals attaching the world's greatest athlete with products in favor of raw, organic and transparent home-built presentations.  Gen Y'ers will tell you these old tactics actually deter them from doing business with you.  Think about it like Jeff  Jarvis states in his book "What Would Google Do?" that Small is the new BIG.

The Internet has created double sided tsunami that has change the retail sales funnel forever. Combine the amount of consumer research being done online with the demographic shift of consumers from Generation Baby Boomer to Generation Y and you will find a couple of common denominators within in your customer data.  The first commonality of is store traffic is down no matter how much R-P-T your spend. Secondly the average age of your highest grossing deals front and back are now 22-30 years.  This chart may help fill in the blanks.

The choice is yours - Innovation or Tradition?  No one is a better decision maker than you, but to be an innovative organization you need to embrace mobile innovation, devices and technology. A common and often overlooked core competency that makes the shift from traditional to innovative strategies easy is a Merchandising Strategy that works for both sides of this debate. You need to implement a process to capture the data required to merchandise your cars online. The use of Apps to gather photos, videos and text descriptor will motivate your employees to produce better content that will in turn motivate shoppers to initiate contact with your dealership. Mobile Apps that standardize the data collection processes make a merchandising strategy easy to manage and sign off on by the entire sales team from your merchandising specialists right up to the Dealer Principal . Transparency establishes accountability and accountability established credibility, both internally with your team and externally with the online consumer.

written by Jay Radke – cDemo Director of Business Development can be reached by email, on Twitter as @JayRadke or by phone at (780)977-5341

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