August 2011, Auto Dealer Today - WebXclusive
Dealers don’t just wake up one day as digital marketers. Proper implementation of digital marketing in a dealership is a three-phase process that begins with enlightenment and understanding how the new digital marketing economy has changed consumer behavior. Phase two encompasses building a marketing strategy—from hiring the right person to lead the dealership’s digital marketing initiatives to gaining organizational buy-in. Phase three is the actual process of building an online presence that mirrors other great Internet departments and leads to market dominance.
Phase 1: Enlightenment
Start by accepting a few truths about the evolution in consumer behaviors. In “The New Rules of Retail by Lewis and Dart,” it’s referred to as a paradigm shift of power from producers to consumers. “Those who make to those who buy,” says Harvard Business School’s Rosabeth Moss Kanter.
Dealers must understand that consumers have the ability to research and assimilate volumes of information in a matter of minutes. Mobile devices and smart phones allow consumers to do comparative geographical location-based product and service analysis in real time. The Internet provides consumers with infinite choices, and consumers are leveraging that information to make comparison evaluations on quality and experience.
Technological progress is creating affordable mobile connectivity for the masses. It is no longer one consumer influencing 10; one consumer’s immediate circle of influence is now 150.
Consumer satisfaction is no longer driven by things; it is now driven by the experience. How can this be relevant to the dealer? For the last 10 years, dealer profit margins have been getting squeezed from all sides. The manufacturers push production and supply-chain model. Third-party vendors exploit information. Consumers desire to receive the best deal. Information demands to be free. Dealers and manufacturers negotiate multi-tier pricing strategy.
All this places pressure on profit margins. As the automotive industry struggled to avoid becoming the next victim of the Internet revolution, it’s the dealer who has been offered up as the sacrifice in the supply chain. But there is hope if things no longer motivate consumers and if customer satisfaction is driven by the experience. Then, price is no longer the motivating factor in the buying equation. If price is not the centerpiece of the purchase decision, then just as quality of product and experience improves for the consumer, quality of sale (profitability) and consumer loyalty can improve for the dealer.
However, the window of hope is small. If dealers cannot shift the organizational mindset from selling cars and service for profit to selling the experience, they will continue to be squeezed out of the supply chain. Why? Because the Internet isolates inefficiencies, consumers understand the middleman is an added expense, and manufacturers and marketers understand true brand dominance is achieved through consistent representation of “the brand experience.”
Winning Hearts and Minds
Brands like Apple, Coke and Abercrombie are creating dynamic brand energy by maintaining control of the entire consumer experience, then fine-tuning those consumer experiences by leveraging neurological triggers, as Martin Lindstrom outlines in his book, “Buyology: Truth and Lies About Why We Buy.” To better understand references to neurological triggers and the impact of sensory branding, consider how the elements in a Tommy Bahama store create an island-like atmosphere. An Abercrombie store is a club-like atmosphere, and Apple’s use of white and stainless steel in its stores is an attempt to create a subliminal association with a religious or healing experience.
Science is helping us to understand that there is much truth in the saying, “Car buying is an emotional purchase.” Recent studies show the pursuit and discovery process triggers the release of a chemical in our brains called dopamine, the same reaction one might experience as a result of a life-altering experience, an intensely religious experience, gambling, a fond family experience, etc. Dealers who are able to successfully control their environments to deliver dramatically superior consumer experiences will achieve brand dominance in their markets.
Dealers spend exorbitant amounts of money trying to achieve top-of-mind awareness through newspaper, billboard, radio and TV ads. The real secret is they don’t have to. Why? Because delivering a true, powerful, world-class consumer experience creates the neurological reaction (that release of dopamine), which as consumers, we are not even conscious of.
The reaction leaves a marker in the consumers’ subconscious. When the consumer sees an advertisement or needs a related service or product, that subliminal marker is recalled and the consumer is motivated to return to the source. This is pre-emptive marketing—in the same way that some dealers used traditional advertising in the past to saturate print, radio and TV to drown out competitors’ advertising. Pre-emptive marketing trumps all other.
Dealers delivering true, powerful, world-class consumer experiences receive more benefits from a competitor’s interruption-style traditional marketing practices because consumers subliminally recall the positive experiences they had at your store and simultaneously associate a negative feeling towards the dealership running the competitive ad. As traditional advertising and marketers continue to lose credibility, word-of-mouth referral is gaining more and more power as an influence of purchase decisions, thus highlighting the importance of creating the ultimate consumer experience.
Local businesses are outpacing larger big-box retailers by listening to and understanding the individualized needs of the consumer. Niche local brands are creating environments where they can emotionally connect with individuals, giving them sustainable competitive differentiation against mass marketing mega brands. These trends are being accelerated by digital media. No longer is it effective to use shotgun-like interruption-style marketing messages. Dealers can realize a far greater return in personalized needs-based marketing delivered through an array of digital media channels centered on individual consumer preferences and lifestyles. Best of all, it’s measurable.
The Power of the Consumer Experience
The benefit of providing the ultimate consumer experience goes well beyond an improved profit margin. The experience generates buzz from a trusted voice, and it drives peers to seek the same experience. The connectivity (one consumer to another) provided by technology accelerates and amplifies the buzz. However, be forewarned there is no statement truer than, “Your brand is not what you say it is; it’s what your customers say it is.” And under that premise (with or without your participation), buzz can make or break you, and it will definitely break the dealers who do not embrace the fact that consumer satisfaction is driven by experience. In other words, the new marketing economy magnifies everything – the good and the bad – exponentially.
You can’t build a great dealership brand without accepting these truths as reality. Once a dealer embraces these fundamental truths, he is ready to begin building an online presence equally as important as his bricks and mortar physical location.
Phase 2: Develop Marketing Strategy
Setting the Stage
Develop a marketing strategy and plan to reach your target audience. Invest in the best consulting agency or Internet-savvy marketing person you can find. This person is critical to the success of your entire organization. In the past, dealers have placed this position too far down on the organizational chart in terms of compensation and status. The person filling this position wears many hats and is critical to the success of every department and the organization as a whole. Therefore, it can be argued that the position warrants status and compensation equal to the general manager’s position.
Both positions are equally important. Most often, if not always, the general manager is a “car guy” who understands the intricacies of the car business. One thing is for certain. He has a dealership to run and doesn’t have the time to do the required reading, learning, research or testing necessary to become an expert in the evolving new digital marketing economy. The position requires a highly-motivated, highly-educated, savvy individual, not necessarily from the automotive industry.
It’s not the non-producing salesperson you want to find a spot for. The right person is going to drive sales, while simultaneously lowering cost. He or she is going to develop and implement strategy, champion new initiatives, and be instrumental in building organizational culture. Most often, this individual is most qualified to make technology decisions, implement technology, make digital marketing decisions (including negotiating), develop processes that align with marketing strategies, develop e-commerce, and monitor the success of each of these initiatives.
Mapping the Course
Once your champion has been chosen, set short-term and long-term goals. The short-term goals allow for short-term wins along the path to long-term goals. The short-term wins are going to be important motivators for your team to stay continuously focus on the end result.
Gain buy-in from the most influential people within the dealership, those with both informal and formal power. Help them to understand how the new or improved direction could specifically benefit each of them personally. Likewise, have organizational meetings for gaining consensus throughout the dealer organization. Consistently measure and publicize results, and create incentives, bonuses, rewards and recognition opportunities built around the strategic vision and milestones.
Organizational buy-in is the key to success. Technology is not a replacement for human capital. In the new marketing economy, every team member from the groundskeeper to the owner is critical to the overall consumer experience. You can tear down all the silos you want, but in the end it always has been, and always will be, the human connection that is most important.
With that in mind, help key personnel understand that unfortunately not everyone can or will rise to the new elevated standards, therefore a greater emphasis must be placed on best practices in recruiting, training and development. After all, you are only as strong as your weakest link.
Removing Barriers to Progress
Dealers can’t be encouraged enough to seek expert advice from those who discuss investment in terms of delivering quantitative ROI for the products and services. Dealers should also stand united in avoidance of third-party lead providers whose business models rely heavily on leveraging the dealer and franchise brands to gain traffic.
Most third-party lead providers simply capture lead traffic destined for the dealership, while funds diverted from third-party lead providers and then concentrated on the dealerships own branding, SEO and other key digital media efforts would net far superior results.
Furthermore, the dealer body should distance itself from the OEMs efforts to implement one-size-fits-all digital strategies for its dealers. The long-term vendor relationships that are being established throughout the industry are detrimental to innovation; they serve little purpose beyond consistency of message and presentation and are often forged with subpar vendors by decision-makers that make uninformed decisions, merely adding cost to dealers looking for innovative differentiation and competitive edge. The dealer body would be far better served seeking individuals to work on the dealer’s behalf, even if they came at a premium cost.
The importance of controlling the brand is obviously critical to the success of the manufacturer, so it’s understandable that the OEM would like to be involved at all points of consumer distribution. However, like the inefficiencies of big government and the unintended consequences of not allowing free markets to compete, the same holds true for manufacturers. Manufacturers should establish clear expectations and guidelines for both dealers and vendors. They might even go as far as to endorse “best-in-class” vendors, but not enter into agreements on behalf of the entire dealer body.
Phase 3: Building an Online Presence
Based upon the strategic planning previously outlined, identify which best practices and processes will align the entire organization with its online presence. Match those needs to real best-in-class technologies within and outside of the industry.
Great dealer websites include various different elements, including:
• Architectures that are naturally favorable to search engines
• Sensory branding elements
• Subliminal consumer hotspots
• Strong calls to action/clear points of contact
• Self-service and full-service features
• Strong brand value messaging
• Readily available pricing with inclusion of manufacturer rebates and incentives
• Active specials for all departments
• Inclusion of real-time social media elements and engagement opportunities
• Inclusion of fresh relative content
• Ratings and reviews
• Live chat
• Inventory and build-your-own vehicle features
• Real-time inventory posting
• Intelligent reports and tracking
• Access to helpful widgets and mobile apps
• Strong manufacturer branding relationship
• Multimedia engagement
Beyond the Website
Great Internet departments actively manage online engagement. Using intelligent reporting analytics, they consistently measure SEO, SEM, VSEO, landing pages and content marketing initiatives, ensuring conversion lead goals and other goals are being met.
Great Internet departments integrate email marketing, mobile text marketing and mobile smart phone apps into their arsenal of consumer interaction. They effectively mine both internal and external data and use state-of-the-art CRM tools to efficiently deliver engaging multi-media messaging to their target audience.
Great Internet departments create visibility for the entire dealership by helping individual team members maximize social capital by leveraging online relationships via social media channels.
Great Internet departments serve as public relations departments—blogging, monitoring the dealership’s reputation, responding to ratings and reviews, publicizing unique and fulfilling consumer experiences, and posting relative informative content.
Great Internet departments maximize the tools available today by building best practices and implementing effective processes to maximize ROI, while researching emerging technologies for the cutting-edge differentiators.
Great Internet departments engage the entire organization with training and development to improve customer interactions and ensure the team understands the dealership’s marketing strategies.
Great Internet departments analyze a wide array of data points to determine effectiveness of organization, individuals, marketing channels and processes. Close ratios, response times, and website- and channel-conversion ratios over various time periods are only a fraction of data analysis.
What elements will Internet departments of the near future possess? Internet sales departments will merge with traditional sales departments, and there will be no differentiation. All personnel will be required to develop the necessary skills to communicate effectively and professionally through online channels.
Tech-toys like the iPad will take mobile computing and marketing to the next level with integrated payment and RFID functionalities. Mobile apps, text messaging and mobile marketing will become primary focuses. Email will fade much like traditional direct mail, as marketers inundate email inboxes with irrelevant marketing messages, and real-time 24-7-365 connectivity will become increasingly important.
Dealers will shift the heavy lifting of communications to professional call center teams and virtual BDCs with professionally trained and incentivized teams to cultivate ultimate consumer experiences on behalf of the dealer, including appointment setting, confirmation, lost sale follow-up, service reminders, customer service follow-up and targeted marketing initiatives. This allows in-store personnel to manage relationships and create environments and ultimate consumer experiences.
Becoming a Market Force
A few years ago, the best way to be a competitive dealer and improve bottom-line profitability was to cut non-effective traditional media expenditures then funnel a portion of those savings into lower cost, trackable, more effective digital media channels.
Today, that’s not enough. As digital media marketing channels continue to create added value, demand increases and dealers flood the space. The price of those products and services will increase until we are again at unsustainable pricing levels. Additionally, market trends and technological innovation will continue to challenge and stretch the conceptual understanding of how to best capitalize on opportunities by marketers and dealers, as is currently seen in the social media space.
There will be other trends like Facebook, Twitter and YouTube. Search providers like Google are constantly changing the rules of the game with complex ever-evolving SEO and SEM algorithms and other structural modifications in an effort to deter individuals bent on gaming the system.
Therefore, there truly is only one path to market domination, and it’s through dynamic brand energy and sustainable profitability. It’s a path that requires leveraging innovative technologies, solid processes, best practices, transparency, a sense of community, cultivating relationships, and establishing the ultimate individualized needs-based consumer experiences. By doing so, dealers will no longer be at the mercy of today’s latest trend because the consumer will be the driving marketing force. That’s an investment worth making with an ROI like no other!
David Pritchard is the director of marketing and public relations for Gentilini Motors in Woodbine, N.J.
Vol. 8, Issue 6