Two years ago I wrote an article on the importance of local dealer research, and why “throwing your advertising budget dollars against the wall,” hoping some of it will stick just won’t work anymore. Well, of course it might work, but certainly not with any reasonable return on investment. I asked my friend and associate Faith Logan at Research Partners (www.ResearchPartners.com) for an update on dealer research strategy.
Without a doubt, the most effective tactic remains a personal interview or one-page questionnaire with point-of-purchase shoppers/buyers. Dealers who have consistently employed this process have realized a substantial gain over previous advertising efforts without the research, and a measurable edge over the competition, not employing such procedures in both market share and advertising cost effectiveness.
Interestingly, in a report published by ZenithOptimedia (www.ZenithOptimedia.com) advertising expenditures by medium are not forecasted to dramatically change in 2013 (as compared to the previous five years) with exception of Internet expenditures which continue to trend up by double digits. Overall expenditures are forecasted to increase about 5.5% in 2012 (over 2011) and about the same percentage again in 2013 (over 2012). Zenith forecasts that TV will remain the big gun with over 41% of spend, and Internet spend will top 18% of the budget by 2013.
Of course these are national numbers and vary dramatically from market to market on local dealer retail expenditures. Smaller and medium markets may spend more in cable television and radio, larger markets may shift more money into radio and search engine marketing. Radio remains flat according to nationwide projections for percent of adspend, yet is making dramatic gains in some markets including some of the largest and smallest metro areas.
Simply, without carefully defined local research there is no way in the world any ‘media expert’ can advise on your best possible strategy without taking into consideration the media availability in your marketplace, the average spot cost, the education/affluence sociography of your primary marketplace, the potential ‘pump-out’ factor, the vehicles you sell, the competition and your stated goals.
Effective research is not as easy as asking the folks who come through the door or purchase a vehicle ‘what brought you in to see us today?’ You’ll never get the right answer for two reasons. First, most people really don’t know, and secondly, most people really don’t care about your business. They will answer the ‘What brought you in?’ question with the first thing that comes to mind just to get off the hook.
When I first became involved in the automotive advertising business most dealers spent the lion’s share of ad dollars in the newspaper. The used car manager handled the advertising 90% of the time and newspapers were the only place to advertise a used vehicle. Most used car managers would tell the owner that no one walks thru the door with a radio or TV under their arm, but a large percentage of customers visit with a specific vehicle in a newspaper ad. It was also easy to place a display ad for new vehicles with a price/payment offer and for the most part those were the only ads with any kind of coop assistance. Zenith’s projections suggest newspaper will still get 17.6% of adspend by 2013, but in most of the local research reports I’ve studied, dealer’s adspend intentions are in the low double digits this year, fading to single numbers by 2013.
Why does ‘point of purchase’ local research work so well? Experienced research professionals will tell you there is a limited window of opportunity in obtaining qualitative information. In the automobile business it is generally within 24 hours of delivery, within the period of sustained euphoria which tends to dissipate rather quickly once the ‘joy of taking delivery’ evolves to the reality of obligation. According to Faith Logan, the highest and best collection of quality information is collected within the actual delivery process, somewhere between signing the paperwork and fastening the temporary plates to the vehicle.
What questions to ask? Faith says no more than 40, no less than 20. Most of them multiple choice directly tuned to media habits analysis. Instead of asking ‘What brought you in today?’ ask ‘Which (if any) radio station you listened to this morning?” “Which station do you generally listen to during the day…or on your way home from work?” Don’t ask a customer a broad question on newspaper readership, ask specifically if they read any newspaper just prior to shopping for a vehicle, or, “Do you receive a newspaper at home?” Faith says the field of questions related to Internet usage has broadened to include questions on search engine usage, what is the ‘home page’ your browser is set to. Which websites did you visit just prior to your purchase to obtain information or pricing?
The biggest question I have regarding research is: Why in the name of heaven are you NOT doing some form of local research right now? It is by far the least expensive, most effective means of maximizing advertising efficiency and constantly monitoring trends. It’s also a great way to separate fact from fiction. Often dealers trust ad agencies and managers to make media choices. Sadly, those choices are often based on years of ‘experience,’ personal relationships, (even kickbacks), or, ‘this is the way we’ve always done it and it’s always worked so why change now?’
I recall reviewing research forms with a West Coast dealership, and asking the owner if he knew what a certain publication name was that occurred quite frequently in the reports. He responded “Oh, that’s just some little local rag. They’ve been after me for years. I always show them the door.” I countered that his customers are reading that “little rag” and maybe we should try a page. After all, it was cheap enough and they certainly would do handstands to get our business. Long story short, not only did that “little rag” sell cars for the dealer, it became one of the most effective buys in our advertising and the dealer has had a full page in every issue with no regrets. But, that being said, the day that it stops showing up in our research is the day we will revisit the relationship.
Faith Logan has prepared a one-page local research guide with some tips on how to make your research more effective. It’s free. No strings. Just send an email to Faith@researchpartners.com and mention this article.