Another form of advertising used to market a specific demographic for products and services is mailers. This is another time tested method with well documented probable results. You know exactly what was marketed, who you marketed to and where the market base is located. A one to three percent return on this type of advertising is considered acceptable, while three percent is considered very effective. If you are patient, this works well. You send it out and hope that you targeted the right audience at the right time to get the desired results. There is absolutely nothing else you can do until the customers start calling or arriving at your store to get their “free air pot” with a test drive.
Now let’s address Internet advertising. Most dealerships have their own Web sites that may be accessed by potential customers. This type of advertising is effective only if the customer is looking specifically for your store. You can add visitor counters to determine how many people visit the site and collect metrics from store visitors to determine its effectiveness, but again, we’re getting away from simplifying a process. Hopefully you’ve employed a good host service or Internet Technology expert to operate it for you. This service can be as expensive or frugal as you want, as long as it gives you the results you desire.
The most effective form of advertising for reaching Internet customers, hands down, is contracting with a third party lead provider. They do all the advertising and provide results. Third party Internet providers take the majority of the risks, and you get a list of customers throughout the month that are interested and motivated to purchase the products and services you provide. Normally these leads are finance driven or vehicle specific (depending on what type of leads you desire).
This advertising can be tracked and measured for effectiveness from the first day you start. You know exactly how many leads you received, which allows you to measure customer contacts, appointments, shows, units sold and gross profits. Using an Internet lead provider is very cost effective, and compared to other traditional forms, is as big a bargain as the Louisiana Purchase.
In most cases, the provider sends you leads up front and asks for payment later. Are your other advertising sources doing that for you? Theoretically you don’t need to factor the cost into your budget because by the time you receive your first invoice, you’ve already pocketed enough profit to pay for the next six months of service. One thing to keep in mind is this type of advertising is effective only if your dealership is equipped with appropriate financing, a large selection of vehicles and most importantly, the people and process to maximize profits. If your employees are old “Lot Lizards,” that probably won’t change their selling style, and you’ll be setting them up for failure. But, if your people are good on the phone and know how to put a deal together, this will mean increased profits for your store.
There is one more important form of advertising that doesn’t cost you a dime but can be the most effective or damaging of any we’ve discussed, “word of mouth.” Treat your customers right, and “word of mouth” advertising is a treasure trove. Treat them with indifference and it will damage you business beyond repair. After enough unsatisfied customers or prospects spread the word about their bad experience at your store, you might as well take a full page ad out for the whole world to see how little regard you have for customers.
No one form of advertising will be the savior for your dealership, so diversify your advertising just like you diversify your investments. Treat every advertising form as an investment with anticipated profitable results and you won’t go wrong.
Vol 3, Issue 10