The growth of technology and particularly the Internet has made it possible for small and medium-sized businesses (SMBs), like car dealers, to accomplish much of their marketing and advertising without outside assistance. For example, every dealer should be able to edit and update their Google Places page all by themselves. The guy who manages the donut shop up the street can do it, why can’t you? There should be no need to pay someone, like me, on a regular basis to manage this very easy, intuitive and infrequent activity.
Google and Facebook (and any company wishing to become a scintilla as successful as these online giants), know that in order to get broad adoption of their services by the majority of businesses, they need to make everything mind-numbingly simple or their market penetration (and their revenues) will suffer.
Great examples of the do-it-yourself digital marketing trends that actually benefit SMBs are Facebook Ads and Google Boost. While dealers may want help setting up these services initially, they really don’t need anyone outside of their organizations to manage the day-to-day requirements.
But, what about more complex digital marketing tasks or actions where a dealer is at the mercy of a third party? Specifically, what about lead acquisition activities that require dealers to use a third-party company’s products? From advertising on major classified websites to buying sales leads, there are some activities that (by their very nature) dealers cannot do for themselves. Having to rely on a third party, for some reason, makes many dealers angry. Whether it is the cost (though this seems strange given the more expensive advertising that digital marketing replaces) or just the fact that they cannot generate this traffic on their own, some dealers flat out hate any vendor they “must use.”
‘Dump all the third parties… except me’
Dealers love to hear that they can do this whole Internet thing without AutoTrader.com, Cars.com or independent Internet leads (AKA: third party leads). To make matters worse, there are popular writers and speakers in the industry that further this passion for self-reliance when they tell dealers that great SEO, SEM and a strong social media strategy is all you need – and dealers eat it up.
Unfortunately, for dealers wishing to become 100% self-sufficient, this advice is not only wrong, it’s irresponsible. Not surprisingly, those who spout this babble have something to sell to dealers. Something, they say, that will help dealers eliminate those pesky third parties (except, of course, the third party selling you the one thing you need to get rid of all the others).
I’ll write this clearly so no one misunderstands my position: Dealers who want to be successful with their Internet sales efforts cannot do so without casting a very wide net. Among other things, this means you cannot generate enough first-party leads to rid yourself of effective outside sources. Some in-market consumers will never visit AutoTrader or Cars.com, but a whole lot more will never visit your web site, regardless of how much you spend on social media, SEO and SEM.
Not buying third-party leads? Your competitors thank you.
Moreover, when a dealer refuses to work with any specific lead source, that dealer is giving his competitors an advantage. For example, if a dealer refuses to advertise on a website that aggregates inventory from many other dealers, that dealer is granting the remaining dealers on the site a competitive advantage by his absence.
Regardless of what some of the “experts” say, dealers cannot spend enough money on Google or write enough SEO content to attract the traffic that flows to certain web sites. Sites like Edmunds.com, KBB.com, Cars.com, Autobytel.com, UsedCars.com and hundreds of others all enjoy traffic that will never, ever visit a dealer’s web site. Additionally, even if all in-market consumers visited every available automotive web site (including yours), there is no guarantee that any one of these sites is going to generate a sales lead from any particular prospect. Only by forgoing your efforts at 100% self-sufficiency and casting the widest net possible can you expect to gain the maximum advantage online.
But, um, you sell first-party leads, don’t you?
Whenever I am in front of a group of dealers and deliver a strategy that advocates they stop the self-reliance kick, I am generally reminded by at least one person in the crowd that my own business is focused on the concept of driving first-party leads for dealers (SEO, SEM, lead-generating website parasites, automated specials, etc.), and I am asked questions like “Why are you advocating against the things you sell?” and “Have you changed your beliefs or your product offerings?”
The short answer is that I’ve changed neither of these – but I do have a mirror and three sons; and I have to look each one in the face every day. In other words, I would prefer to give sound advice based on what really drives success for dealers, rather than change my message to benefit only my offerings. (There are too many vendors in the automotive space doing that already.)
Make no mistake about it, dealers should do everything they can to increase their first-party leads. In fact, this should be a primary goal for the lead acquisition side of your business. But, and here’s the kicker, you cannot stop there if you want to be truly successful. (Regardless of what self-serving message some search engine optimization company is telling you.) This reminds me of two recent examples I encountered in the market recently.
The ‘drop third parties and use the savings to advertise with us’ sales pitch
I saw presentation provided to a client from a never-before-heard-of pay-per-click company (that will remain nameless) detailing why you should spend $6,000 per month with them instead of AutoTrader or Cars.com. While their desire to capture the dealers’ dollars is understandable, and the results they claim are admirable, their approach is maddening. Why must everything be an “either/or” proposition? Why must every new digital marketing source try to poach existing digital marketing dollars? (Especially when the new vendor has absolutely no idea whether the older sources provide ROI or not.)
In the study David Kain and I released in April, we detailed how the most successful Internet dealers cast a very wide net by employing the maximum number of digital marketing sources. The bottom line is that you cannot reach the pinnacle of your Internet sales potential by generating 100% of your sales leads by yourself (or even with the help of this brand new PPC company).
My advice to the client who received this pitch and anyone sitting in front of a new digital marketing source who tells you to dump Cars.com, AutoTrader or other third-party provider in favor of their product (before they even know if these existing sources are providing critical branding and/or driving sales for you) is to keep them out of your wallet and show them the door.
The “what dealers don’t know won’t hurt them” approach
In the second example, I was contacted by a company providing SEO services to a single-point dealer for – brace yourself – $7,000 per month. This company bragged to me that the customer was so happy with their services that they even took them golfing when they visited with the dealer. Ouch! I took this to mean that the dealer is paying more than I could ever imagine for SEO and also paying for golf? Wow, that must be some great SEO.
I won’t comment on the quality of the services this company is providing, because SEO can be quite subjective, but I will say that there is a price for “perfect SEO,” and for virtually every dealer out there, that price is too high. Even if you could be on the top for all relevant keywords, this does not mean you will get all of the clicks. In fact, in a 2010 study from the data analytics company Chitika, being in the top spot on Google only got you about a third of all clicks. That’s a big number, of course, but it’s not 100%.
Using that $7,000 a little creatively – like paying a content writer to place SEO text on your website and using the rest for pay-per-click and Google Boost ads – could probably drive more in-market visitors for this dealer and deliver long-term SEO benefits. (You see, when you control the SEO, you keep the content, and your SEO goodwill does not go away when you fire your SEO company or change website providers.)
Okay, but let’s agree that my marketing dollars should be spent 100% online…
Along with the desire for self-sufficiency, there is a growing belief among many dealers that all they need is digital marketing to make connections with consumers today. In this regard, many of them are completely abandoning traditional offline channels like newspaper, television and radio in lieu of spending more money online.
about the fallacy of this move for dealers who operate in areas served by community newspapers (you can read that post at: http://bit.ly/jalr9z). Suffice it to say that so much of your online success is driven by the offline branding you’ve been delivering over the years that to completely abandon this largely un-measureable activity will likely harm your brand in the long term.
If you still believe that all you need is online marketing consider the case of Dave Smith Motors, the largest Internet dealer in the world. Dave Smith Motors of tiny Kellogg, Idaho advertises on Sirius Satellite Radio. While radio was once just a local medium, Dave Smith Motors is going national with these ads. Clearly, they understand that offline marketing is a critical part of an overall marketing strategy (and a strategy that you cannot execute without outside help).
Additionally, local coupon giants Groupon and LivingSocial are regular buyers of television advertising, even though their services are 100% Internet-based and their go-to-market strategies are founded on social media and referrals. This begs the question: If these online titans (who owe their very existence to social media and viral marketing) are buyers of television advertising, what do they know that you don’t? It’s time to bring in some third parties to help you sort all of this out, and it’s time to stop trying to do it all yourself.
And the moral of this story is…?
The idea that even aided by technology and employing a large, intelligent and technically proficient staff you can eliminate third parties is ludicrous. (The industry’s largest dealer groups use plenty of third parties to help them grow their Internet sales, despite employing very large ecommerce teams in some cases.)
Sure, there are plenty of digital and offline marketing activities that you can control internally – and many of these make perfect sense to keep in house – but the fact remains that the most successful dealers use an extremely wide variety of sources. Moreover, for successful dealers, all of these sources are valuable and provide a great return on investment. The secret these dealers know above all else is clear: Control what you can control (like process and the customer experience), measure everything you can measure (dumping ineffective sources quickly), and treat your third-party vendors like the subject matter experts they are (instead of the pariahs you or that SEO vendor have made them out to be).