We all know that achievement-oriented individuals and companies dominate the auto industry. We all want to win, and we want to win in any market.
Fortunately, good markets and bad markets alike present tremendous opportunities to crush your competition. Some campaigns and tactics work best when your market is up, but not when it’s down or flat. Market domination requires specific data sets and digital strategies that are executed with consistency, discipline and focus.
But no matter what your market looks like, there are some hard-and-fast rules that the top dealerships in the world live by when it comes to setting, meeting and surpassing their digital goals. While some are incredibly complex, others are much simpler than you’d think; they just require discipline, focus and a willingness to stand out from the crowd.
Adhering to these three tips can set you on the right path to winning in your market, and to making smarter decisions with your marketing dollars.
1) Know what winning means to you
Seems simple, right? For just about all of us, winning means improving our bottom line. But within that broader goal, there are lots of secondary benchmarks we want to reach, and which we measure ourselves against every year, quarter, month, week and day.
Maybe your top priority is selling more cars than your closest on-brand competitor. Maybe you define winning as lowering your average cost-per-acquisition. Maybe, just maybe, it’s all about out-selling your ex-wife’s dealership. The first step toward meeting your goals is to clearly define them, then execute on a plan that leads you to your promised land.
Not sure exactly what “winning” means for you? Do what the top dealers do; measure yourself against market share while also working to lower your acquisition costs. Sure, it can feel good to pat yourself on the back if you beat last month’s numbers or outsold your competitor. But if your sales are up because the market as a whole is up, do you really deserve praise?
The top dealers think of market share like their favorite type of pie. The bigger their slice and the lower their acquisition costs, the bigger their profits will be relative to the rest of their markets. The hard truth is that dealerships can’t always control the demand for their brands or vehicles, and while digital strategies like on- and off-brand conquesting can help, they’re not cure-alls. If you worry less about MOM or YOY numbers and more about your market share – while keeping an eye on your advertising costs – your bottom line will thank you.
2) Trim the digital (yes, digital) fat
For years and years, you’ve been encouraged to slash traditional spend. You’ve been told to reallocate your newspaper buy to paid search, to spend some TV money on third-party listings websites, to eliminate direct mailers. And it’s true that in many cases, reallocating your underperforming traditional marketing budget to digital can yield better results.
But cutting all traditional marketing isn’t always the answer, especially if you’re reallocating that money toward underperforming digital campaigns. As such, you should examine your digital campaigns and cut the ones that are least effective. This allows you to put more juice behind your best online strategies.
For most dealerships looking for a leaner digital budget, the best place to start is third-party listing sites. These sites pit you directly against your competitors, and often force you to pay many times over to show the same vehicle to the same person on several different sites. Almost every dealership funnels money into these sites out of a fear of being left out, but there are much smarter ways to get your inventory in front of low-funnel shoppers.
When you pay third-party listings sites, you’re really paying for the privilege of listing your inventory on a site where someone might view it. By skipping the middle man and working with platforms that provide you with access to the same in-market audiences, you gain the ability to target low-funnel shoppers and bring them right to your site without having your inventory listed right next to your competitors’. It’s complicated, but when done right, it’s incredibly cost-effective.
3) Don’t be seduced by co-op
Since you were a child, odds are you’ve been told that anything that’s “free” is too good to be true. Just because something doesn’t have an immediate, up-front cost doesn’t mean it won’t hurt you in the long-term, and oftentimes, things that are free don’t work the way you want them to.
Unfortunately, this also rings true for your OEM’s co-op program. Yes, you can recoup some marketing spend if you check off all the boxes of your co-op program, but what you’re losing is a chance to differentiate yourself from your competition. Think about it; co-op is, at its core, all about leveling the playing field. When you buy into your OEM’s co-op program, you’re getting exactly what your competitor down the street or in the neighboring town is getting.
Remember what we said about market share? How are you supposed to get a bigger slice of pie if you’re letting your OEM control portions? If you really want to stand out and edge your competitors, you need to be willing to walk away from the “free money” that co-op programs offer you and invest in more aggressive, individualized digital campaigns.
Ask yourself this: what is the real price of “free?” Think about your ad budget as a percentage of your gross. Are you spending 5% or 15% of your gross on advertising? Better digital agencies might cost more, but if they boost your bottom line, you could end up paying a much smaller percentage of your gross than rivals who opt for cheaper solutions.
“Free” is for suckers. The top dealerships in the world don’t care about co-op; they know that by spending smartly and aggressively, they’ll more than make up for lack of co-op reimbursement through a marked increase in gross sales.
Success is determined by your strategy, your creativity and your discipline; not your market. Following these three steps will put you in a better position to make smarter decisions and get back to doing what you love most; winning.
Learn more about how to crush your competition in any market during Justin Cook’s session at Digital Dealer 23. Attend this presentation to learn:
- Specific data sets and digital strategies to implement, and how to execute them with consistency, discipline and focus to dominate your market.
- How to make decisions based on market dynamics, not on emotion and misleading pitches.
- How to use the data available to you now to increase your market share and target your competition.
Author: Justin Cook
Justin Cook finds truth in numbers and transforms digital marketing through data-driven innovation at C-4 Analytics, an award-winning digital agency. Blending proven marketing practices with the evolving science of analytics, Justin develops next-generation strategies rooted in the psychology of decision-making, yielding results that turn C-4 Analytics’ clients into leaders in their markets.