Twenty years ago ‘Blue Sky’ was what a dealer received over and above the asset value of his or her dealership when it was sold. ‘Blue Sky’ was based on an algorithm of earnings, franchise, location, reputation, and likelihood of future business continuity. ‘Blue Sky’ offers were usually calculated as a multiple of trailing EBITDA (net profit) up to six or seven times that number, and substantially more when the public companies stepped up to the plate. Today’s ‘Blue Sky’ is different. In many cases, it’s non-existent. In the past few years, numerous deals have sold for assets/real estate as dealers retire. In some cases, factories have assisted purchase and consolidation of points with both cash and pressure. So how can a dealer preserve and enhance any potential ‘Blue Sky’ return on investment and sweat equity? It all comes down to brand perception. And I’m not talking about the brand of vehicle sold. The customers’ brand perception of dealership trust and overall value.
SHARE OF MARKET/SHARE OF MIND
Over 25 years ago the ad agency I founded coined the expression ‘Share of market/Share of mind,’ defined simply as a balance of advertising dollars spent on ‘Share of market’…how many vehicles can we sell this weekend. Which for the most part is not really even advertising, but mostly promotional in nature. Hawking goods at a price or payment largely benefitting the maker. Today, 90% of America’s dealers spend 90% of their marketing resources on ‘Share of market.’ ‘Share of mind,’ on the other hand, the true expression of actual advertising gets left in the dust most of the time. Reason being that we struggle to measure return on investment nailed down to how much we spent per vehicle as generated by a specific communication entity this weekend. Nothing wrong with knowing where our money is best spent, but trying to nail down the actual return from every single print ad, radio or TV ad, Internet ad, text or email is one of the most frustrating tasks imaginable.
WHERE THERE IS A ‘MARKET’ THERE IS A ‘MIND’
When we achieve an effective mix of media and then fine tune by adding and subtracting mediums/channels, we eventually reach a level of consistency and reasonable return on investment of total marketing dollars. Simply, we know if we advertise certain vehicles on that mix of media, we can expect somewhat of a predictable return on traffic/sales. So, it stands to reason that if that media mix is moving the market based on a sale theme, it is also reaching the ears, eyes and minds of not only those buyers, but a lot more folks who might be in the market sometime beyond this weekend. Maybe next week. Next month. Sometime this year. This is where ‘Share of Mind’ does its work. Reasons to at least consider your dealership when you reach the stage of action.
REACH, FREQUENCY AND RECENCY
Some years ago, I spoke about the work of a brilliant media strategist by the name of Erwin Ephron who penned a paper on the concept of ‘Recency’ as being more important than the traditional media measurements of Reach and Frequency. In 1998 Ephron wrote that being in the right place, in the right medium, at the right time was much more of a critical factor than how many times you actually repeated an ad or even how many people you reached with that ad. Ephron wrote: “When a person is ready to buy a product the hard work is done. If you happen to reach that person with a message that appeals to that current need, you get an immediate reaction.” So, if we believe that 20% of the folks we are talking to are quite possibly in the market this week, that ‘Share of Market’ message might be just the nudge they need. But what about the other 80%? What can we say to them that will cause the mind to tuck away a little piece of info on our product or service for future use? That is ‘Share of Mind.’ And by the way, if you’d like a free copy of that article on Erwin Ehpron’s Receny paper, please email me and I’ll send it along. Please refer to this article for reference.
SHARE OF MIND IS NOT GENERIC BLATHER
The biggest reason/excuse I’ve heard over the years from dealers about why they don’t want to waste their money on ‘Share of Mind’ advertising is that it is ‘generic blather.’ “I want every dime of my money to sell cars dammit!” Done right, ‘Share of Mind’ is not generic nor is it a waste. It’s an investment. In fact, arguably a better investment than selling a Chevy for five dollars less a month than your competitor. ‘Share of Mind’ is a proposition to the listening, watching public that even if you are not in the market for a car this weekend, we are the absolute best place to consider shopping when you ARE in the market.
SHARE OF MIND INGREDIENTS
Inventory. Talking about a big inventory or the ‘right’ inventory is a powerful element for future consideration. We are an ‘off the shelf’ society and probably always will be. We want to shake hands with the door handles. If you don’t have as much total inventory as a larger competitor, you might have a larger inventory of specific makes/models.
Service. One successful dealer friend takes the independents on with in-your-face price/value comparisons. He has large signs posted in the service area with prices of services compared to competitors like Midas, Sears, Manny Moe, etc. His service ads talk about competitive prices with guaranteed work and factory authorized parts.
Years in business. People love consistency. There is a major trust factor in doing business with a company that has had a long, successful operation in the same location. “We’ve been here for 34 years. We plan to be here for years to come.”
Trust. There is nothing more powerful to embed in a potential shopper’s mind as the power of trust you’ve created with your present and previous customers. It’s word of mouth on steroids. Almost everyone I know asks team members, fellow employees, neighbors and friends for recommendations for purchase and repairs. One of the best ways to convey a legacy of ‘trust’ is through testimonial ads from satisfied customers.
The little extras. You make points in ‘Share of Mind’ marketing with things you do that no one in your market does…or things that you do much better. You might offer a restaurant, or no charge rental cars, or special ambassador/loyalty programs. If your ongoing research reveals mentions of specific reasons beyond price and selection that customers say are important to them, these are the little extras you should talk about.
There is no ‘Blue Sky’ in the concept of lower price or lower payment. The only ‘Blue Sky’ today, other than great real estate, is the embedded ‘brand perception’ of your dealership. A ‘brand perception’ that a buyer for your deal can take to the bank as long as they intend to continue down the path you’ve created.
Author: Jim Boldebook
JIM BOLDEBOOK is Founder of CBC Automotive Marketing, an advertising/marketing agency working with some of America’s most successful dealerships. He has been in the broadcasting, advertising and marketing fields for almost 50 years. EMAIL: firstname.lastname@example.org