Article

Your Ecommerce Director: In-House vs. Outsource

Who is in charge of your digital campaigns? Building an online presence requires real leadership, and the choice between hiring an in-store ecommerce director or outsourcing those duties depends upon the wants and needs of the individual dealer.

April 2016, Auto Dealer Today - Cover Story

by Matt Childers

Among other duties, a dedicated ecommerce director builds and maintains their dealership’s presence online, on social media and on third-party review sites.
Among other duties, a dedicated ecommerce director builds and maintains their dealership’s presence online, on social media and on third-party review sites.

Automotive digital advertising is one of the most competitive marketplaces on earth. Millions of dollars are being spent annually, all in an effort to keep you and your competitors in the hearts and minds of in-market car buyers. You have to be a dedicated student of Google, social media platforms, industry publications and new products and services just to stay in the race.

Keeping up to date on digital marketing trends is an often-laborious process of tuning in to endless webinars, reading lengthy articles and attending expensive conferences. And just when you think you have it all figured out, it all changes.

In smaller-size and single-point dealerships, the ecommerce director position is a relatively new concept. In large dealer groups, the position has been around for a while. The ecommerce director’s purpose is to maximize the dealer’s digital advertising dollars, increase the number of email, chat and social media leads and set the tone for the store’s digital efforts. Those duties can be performed by an in-house employee or outsourced to a digital marketing provider.

As advertising budgets continue to shift toward more digital spending and away from traditional media, the ecommerce director position will become increasingly important. So how do you know when it’s time to hire one, how do you choose between in-house and outsource, and what should they be expected to do?

Understand the Role

It’s no secret that many dealers still do not understand exactly what an ecommerce director does or why they need one. They haphazardly approach their digital marketing with a “set it and let go” approach. They may be happy to rely on the individual efforts of their salespeople and whatever OEM campaigns happen to be running at the moment. They may even continually invest in the latest and greatest products or services, whether or not they provide a return for the store.

This is a significant waste of dollars. The task of determining the digital ad spend is passed around from one employee to another like a hot potato. No one really seems to understand or want to invest the time necessary to make informed decisions, and no one appears willing to step up and take charge.

If any of this sounds familiar, then you probably are not yielding the results that you desire for your dealership. That’s where an ecommerce director steps in.

A dedicated ecommerce director can increase your exposure and multiply your sales opportunities by building, managing and constantly monitoring your presence online, on social media platforms and on third-party review sites. They will frequently collaborate and coordinate with upper management, sales managers and, if present, the business development center.

If you think this sounds like a highly skilled and well-paid position, you’re right, and that can be a problem for smaller stores. The National Automobile Dealers Association (NADA) reports that, as recently as 2014, the average dealership employee makes $55,000 a year. On top of this, a dealer has to fund employee benefits such as healthcare, payroll taxes and 401(k). The idea of hiring yet another person, possibly at a higher-than-average salary, can be tough to justify.

As a result, an increasing number of smaller stores and groups have outsourced the tasks of an ecommerce director to digital marketing providers. Having served as the in-house ecommerce director for an auto group and, now, for a provider, I can tell you that the choice between creating an in-house position or outsourcing that work really comes down to the individual dealer.

Would moving your digital efforts outside the physical walls of your dealership pay huge dividends to the store and free up time and resources, or is that work too important and personal to be left to a third party? I’m not here to advocate for either choice, but to help you decide, let’s break down some of the pros and cons of outsourcing.

Outsourcing the duties of an ecommerce director can allow staff to focus on sales, but some dealers may prefer to keep that position in-house.
Outsourcing the duties of an ecommerce director can allow staff to focus on sales, but some dealers may prefer to keep that position in-house.

The Pros:

1. Reduce training time and turnover: Outsourcing the responsibilities of an ecommerce director means a dealer is not saddled with the downtime and expense it takes to train a new employee. They also enjoy zero turnover in a key position, because a team of experts is always prepared to continue the work.

2. Sharpen the Internet sales team’s focus: Dealers who maintain a separate Internet sales team often charge those staffers with managing vendors, dealer website and OEM requirements. That can take their focus away from selling vehicles. Digital marketing providers can take on those duties so your team can spend their time focusing on selling cars instead of managing vendors.

3. Gain access to new products and ideas sooner: Outsourcing companies are constantly learning and going to digital conventions to keep up on new topics and products. They also can eliminate the expense of sending people to industry conferences and advanced training to stay on top of what is happening.

4. Be part of a group: Most providers manage dealerships across multiple brands and, often, multiple states and regions. We have a clear idea of what is working for certain OEMs and what can be applied to other dealers. Following the recall scandal at Volkswagen, for example, we were able to make adjustments for some clients based on what was working for other stores. Outsourced ecommerce gives single-point stores the feeling of being united as a group and having access to additional resources. We also offer benchmarking to help determine whether leads, website traffic and sales are in line with standards established by our entire clientele. Finally, we provide another level of expense checks to make sure the dealer is getting the best price possible through negotiated group pricing or knowing what the vendors should be charging.

5. Have access to real experts: Most rural dealers find it difficult to find talented staff who have automotive sales and digital marketing knowledge. Outsourcing the work can help dealers who might be unable to attract or recruit this specialized position. It allows the dealers to hire staff with years of industry experience that might not be readily available otherwise.

The Cons:

1. Remote collaboration: Some dealers may not like the idea that a lot of work must be done over phone and email. Occasional in-store visits are possible, but the brunt of the work is done remotely.

2. Confidentiality of customer data: Outsourcing firms need to have access to the customer relationship management (CRM) system to track and monitor the dealership’s performance and progress in a number of areas. Although confidentiality agreements can be put in place, some dealers might not be comfortable with this arrangement.

3. Lack of individuality: Most digital marketing providers have a proven process that they will want to use. If a dealership wishes to create their own websites and messaging, then it may not be a good fit.

4. Outsourcing does not control the sales process: Outsourcing can help to increase lead count and make better budget decisions, but is still up to individual salespeople at the dealership to convert leads into appointments and sales. If sales associates are unable to handle the additional call and lead volume, the results will suffer. We recently worked with a dealership that saw a 60% increase in high-quality email and phone call leads, which quickly exposed the weaknesses in their Internet sales process. We are able to offer advice targeted to a dealer’s online sales process, such as follow-up and BDC structure, but we can’t sell their vehicles.

5. One size does not fit all: Because most outsourcing firms charge by the rooftop, it may not be advantageous for a large group to outsource. At some point, a dealer group might be better off hiring someone to handle the position internally, particularly if that will cost less than what an outsourcing firm would charge.

Today’s world is highly connected, and that connectivity allows you to engage customers and build your business in ways that were not even possible five or 10 years ago. In my experience, too many dealers live by the mantra that “It’s the way it has always been.” I disagree. Technology is flooding our industry and creating new opportunities for those who are willing to embrace it. Whether in-house or outsourced, your ecommerce campaigns need a leader to develop, implement and stand behind them.

Matt Childers is a digital marketing strategist with Kirin Automotive and the former general manager and ecommerce director for the Fremont Motor Company group. [email protected]

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