Paul de Vries will sell 1,200 new cars in 2012. He doesn’t have a new car franchise and he only employs nine employees. He has a limited marketing budget that is heavily focused on digital initiatives that include publishing a library of 150 videos to video sites like Meta Café and Viddler. The videos focus on promoting his company when prospects are conducting searches on Google for any new type of vehicle. An example of a search would be “Nieuwe Kia Rio Kopen.”
The rest of the story is that de Vries operates his business outside of Amsterdam. De Vries was a Chrysler dealer for eight years until his government started to tax units based on fuel mileage. I found an article from Gilbert Kreijger with Reuters that stated, “Cars that exceed a threshold level of carbon dioxide emissions would be taxed by an extra 80 euros to 90 euros ($108 to $121) for each gram above the level according.” Kias are exempt from this fuel tax, but SUV buyers paid an additional $6,000. Since de Vries had been focused on selling SUVs at his Chrysler dealership, the fuel mileage tax forced him out of business. De Vries then became an independent dealer focused on selling new cars across OEM lines.
I was intrigued with some of the advanced video initiatives that de Vries was involved with since only a small percentage of American dealerships are involved with AVSEO (Accelerated Video Search Engine Optimization). I was under the impression that the U.S. was ahead of the European market with digital marketing. De Vries confirmed that he was the first dealer in his country using AVSEO and video with his blog. De Vries had attended a Digital Dealer Conference & Exposition session with Sean Bradley. Sean mentioned Meta Café during his presentation and de Vries found a way to dominate with Google search results in Holland. I asked de Vries what the new car dealers thought of his approaches since Holland is a densely populated dealer community. De Vries indicated that half the dealers respected him and the other half dislikes him. De Vries has been able to build a business of selling new cars when he doesn’t have direct inventory. He accomplished this by attending a Digital Dealer Conference & Exposition session, picking up ideas and taking action.
Taking action is the key point. Testing and validating digital opportunities is limited to a small percentage of early adopters in our industry. Only 23% of the dealers have a chat strategy according to John Hanger, CEO of Contact At Once. How can this be possible? In reference to mobile enabled websites, dealers are getting 25-30% of their total website traffic from mobile devices, but again a number of dealers are not focused on mobile sites. How can any dealer afford to ignore 25% of their business?
In reference to video, video can drive website conversion which means additional leads being pushed down the sales funnel. Video is exploding in non-automotive verticals yet less than 20% of the new car dealers are involved in a video strategy and most consider a VIN specific solution the end all. These concepts have been used by a small percentage of auto dealers for years, but the majority has not engaged. The latest digital opportunity available to dealers is TrueView video, offered by Google. Dealers can promote themselves with pre-roll or sponsored video ads on YouTube, specifically targeting consumers in their market looking for specific brands. For example, you can target consumers that click on a Honda video found through a natural search with Google.
In his bestseller, “Outliers”, by Malcolm Gladwell suggests that successful people are “beneficiaries of hidden advantages and extraordinary opportunities and cultural legacies that allow them to learn and work hard and make sense of the world in ways others cannot.” An outlier is a person “who, for one reason or another, is accomplished and so extraordinary and so outside of ordinary experience that they are puzzling to the rest of us, like a cold day in August.” These people don’t fit into our normal understanding of achievement. Gladwell believes that success is tied to areas like practicing for hours and hours. The Beatles for example, became much better after they went to Hamburg and played in clubs every night of the week.
How did we get to this point where the majority of the dealers are not engaged in exploring new digital concepts? Why is tier three slow to embrace ideas that are adding proven success in non-automotive verticals? Why is such a high percentage of Tier Two dollars tied to television? I believe part of the problem is that the typical dealership has a model that requires a direct return on every person tied to the sales team. The Internet director spends 98% of his/her week focused on selling cars and two percent on new concepts. The owners are quick to eliminate head count that isn’t tied to direct sales. I also believe that the OEMs in some cases are also slow to co-op initiatives that don’t fit the cookie cutter approach and their training is limited to basic and traditional initiatives.
Lonnie Decker is the e-commerce director for a group of nine stores within the Potamkin Automotive Group. Lonnie has increased profits by 400%. His dealerships are also some of the highest performing stores within their brands. This didn’t happen overnight and Lonnie has a team of seven non-revenue producing specialists supporting him.
This allows Lonnie to focus on developing new ways to drive sales. Lonnie doesn’t spend 80 hours each week answering e-mail leads.
Another problem is that many directors are not permitted to make budget decisions. They attend Digital Dealer Conference & Exposition sessions, get fired up about some new concepts and fly home to meet with the skeptical dealer or general manager who quickly explains the reason why those concepts will not work in Des Moines or Chicago or Boston. I have met with a number of directors who are discouraged about their lack of influence at their dealership. Still other dealerships hire unqualified directors that are only good sales people. The director should have sales talent but also have knowledge of the digital world. The Internet director should be encouraged to explore and test new concepts. The director should be spending a percentage of each week researching concepts that are working in both automotive dealerships and non-automotive verticals.
I’m not suggesting that you sign and test every concept that comes through the front door. Each dealership should have a one-year plan that includes new focuses that will be tested and validated. If you are the general manager, push your team to research and implement one new concept each quarter. Strive to become the outlier in your community.