Article

Do I Really Need to Advertise on the Internet, too?

August 2006, Auto Dealer Today - WebXclusive

by Todd Swickard - Also by this author

“Money for the Internet” is a phrase that can make dealer principals and marketing managers cringe. There are a thousand places on the Internet that want your money. Among the many are third party lead providers, classified listings and banner advertisements on local media sites. Some work well; others don’t. We have seen these companies come and go. As it gets a little rougher in the car business, savvy dealers are evaluating the effectiveness of their advertising dollars.
Advertising on the Internet is one of the most effective forms of advertising that you can buy. A lead directly from your Web site is the most qualified lead that you can get. The consumer knows where they are, what they're looking for and that you are going to contact them. It is like someone coming into your showroom and asking a question about a vehicle, service or parts.

Each time you read an article about Internet consumer buying habits, you'll see that it is always increasing. The Internet is a first stop for many buyers. Your site is the best way to get them to start a relationship with you. The Internet is the most convenient way for them to contact you while they are at work or home. They don’t have to wait until you open in the morning and find someone to answer their questions. They don't have to subject themselves to the initial eye-to-eye selling process they dislike so much until they're ready. When they're ready, that lead is hotter than a first time UP.
Your Web site should not be its own little division. It should be integrated into your marketing plan. You should actively work with the person that is in charge of all the creative media to make sure that your Web site is on every TV commercial, radio spot and print ad, and not just as a tagline but as a feature. You can show your principal and upper management all the visits to your site at the end of every month. Those visits equate to inquiries, additional phone calls and actual visits to your store. You can account for the ad dollars invested in your Internet operation with full track ability. Print and media is a shout into the crowd; there are few ways to measure how many buyers they bring in unless there is a source to track, such as a dedicated phone number or coupon to cut out.
 
When dealers finally get serious about marketing their Web site as an equal to their print and other media efforts, the big question is always: "How much should I put toward marketing our site monthly?" A good rule of thumb is 10 percent of your monthly ad budget. That 10 percent is going to roughly help find 65 percent of the shoppers in your area on the Internet. Not a bad way to work the numbers. Remember, shoppers aren't always looking for another vehicle to buy. They're looking for service, parts, and collision repair, too, or even accessories and extended warranties.

So how do you convince a dealer principal or marketing manager to invest in advertising their Web site? This is not an easy job and should not be taken lightly. You have to present your game plan in a way that gets their attention and speaks their language. The language is simple. It only contains three words—cost, sales, ROI (return on investment).

These three simple words all work together. They should be in the same conversation. Showing them a simple formula of why it is important to buy a service usually works. For example, if you want to hire a service to help increase traffic to your Web site, give them a simple one-page summary of why you think this will benefit Internet sales. It's obvious that you should mention their expertise in the field, their commitment to cutting edge technology, years servicing clients in the industry, etc. Then use the following template as an example of the revenue stream.
 
Hopefully, presenting it to them in their language will help them understand that this is a traceable, profitable, and successful way to advertise. Major manufacturers are redirecting huge amounts of their advertising dollars to this medium for one reason—it produces sales. Their armies of marketing researchers and studies have shown that people are starting the process on the Internet. Not being there is a mistake that will cost your dealership money for years to come.
 

Sample
A) Cost of the Service ................................................................................ $3500

B) Expected Sales from Service Use your current close ratio
.................. 32 vehicles

C) Cost per Sale ....................................................................................... $109.38

D) Compare to sample 20 Dealer group average*.............................. $287

E) Savings per Sale ................................................................................. $177.62

F) Average Vehicle Gross UWorkross Profit ................................................ $1500

G) ROI: Expected Sales x Average Gross – cost of program .................... . $44,500

Worksheet For Your Store

A) Cost of the Service _____

B) Expected Sales from Service
(Use your current close ratio ) _____

C) Cost per Sale _____
(A/B)

D) Compare to Leedom & Associates 20 Independent $287
Dealer group average*

E) Savings per Sale
_____

F) Average Vehicle Gross _____ (D-C)
Use your average Internet Sale Gross Profit

 
Vol 2, Issue 5

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