February 2013, Auto Dealer Today - WebXclusive
Sometimes, it’s the out of the ordinary things that make the biggest impact in an otherwise conventional world. That certainly holds true for auto retailers when it comes to plying their wares. Just imagine …
The days have grown short, and your dealership’s showroom is decked out for the holidays. It’s December and time for your year-end sale. Your ads have been in front of customers for weeks, playing during football telecasts and radio drive-time, crawling across the top of your website and taking up the entire back page of Sunday’s sports section.
As a further reminder of the annual campaign, just outside your showroom window is a sporty two-seater that you’ve cherry-picked from the lot and adorned with a giant red ribbon. The size and color of the bow along with the large white “0%” painted on the windshield have been catching the attention of nearly every holiday shopper whizzing past en route to the mall, and even generating some leads. On the Saturday before Christmas, a man in his mid-50s whips into the lot and climbs out of an aging sedan. He cautiously makes his way to the “gift-wrapped” roadster as if approaching a sleeping grizzly.
He hasn’t driven anything but a four-door family car since he was 22, so he walks around the sports car to “kick the tires.” When he takes a seat inside, the car wraps around him like the cockpit of a fighter jet. Suddenly, a smile creeps across his face, and he jumps to life. “It’s perfect,” he exclaims. “It’s the perfect gift. I know the wife will just love it!”
Of course, it’s as much for him as for her, but before the sinking winter sun turns afternoon to another early night, the loan is approved, the paperwork is signed and plans are made to deliver the car to the man’s driveway just after dusk on Christmas Eve. It’s sure to upstage everything under the family Christmas tree this year.
But it was neither the Christmas decorations, the ads in the paper nor the 30-second spots on the airwaves, which he has been bombarded with every day since Thanksgiving, that grabbed this man’s attention. Like most consumers, he had simply tuned out these traditional advertising messages as background noise in a hectic life. The $72,000 deal was, in fact, made when the man, stuck in holiday shopping traffic, happened to look over and see your dealership’s courtesy shuttle, which was covered bumper to bumper in a vehicle wrap depicting a straight-on side view of the bright yellow Corvette. At first glance, it almost looked as if the shuttle were the sleek sports car itself. But then, across the windows and above the low-profile image of the ’Vette, the man noticed your store’s logo, and the seed of desire was planted.
That’s all it took. Courtesy of mall traffic and some unconventional thinking, the $3,200 vinyl sticker that envelopes your shuttle just scored the biggest deal of this year’s holiday campaign, reaching a buyer that tens of thousands of traditional advertising dollars didn’t faze.
Advertising: The basics
While this particular story was fiction—though Roy Robinson Chevrolet in Marysville, Wash., did actually cover their courtesy shuttle in the Corvette wrap—it illustrates the benefits of advertising money spent in unexpected ways. While there is no accurate way to measure how many vehicles a mobile billboard might sell, the wisdom behind the concept stands out as much as the shuttle itself. “Our own company’s vehicles are wrapped,” said Chris Cunningham, owner of AutoTize in Mill Creek, Wash., just a few miles away from the Marysville dealership for which the graphics company customized the real “Corvette” shuttle. “People say, ‘I see you all the time.’”
To stand out, companies have tried just about everything, including projecting huge logos onto the sides of city buildings. CBS decorated grocery store eggs with its signature logo and corresponding slogans. KFC painted their logo on fire hydrants topped with buckets replicating their family packs of fried chicken. Some businesses have even paid people to tattoo a slogan on their bodies. “You have to use new and innovative ways to capture people’s attention,” said Aaron Kleinhandler, though his audio and video marketing firm, Spectrio, doesn’t necessarily suggest that auto dealers use tattoos to do so.
Exposure. It is the critical component of any successful retail promotion or campaign. It’s Marketing 101, literally. As the opening paragraph of “Marketing 101” in the U.S. Small Business Administration’s (SBA) online guide, Running a Business, puts it: “In order to successfully grow your business, you’ll need to attractand then work to retaina large base of satisfied customers.” And when it comes to the car trade, dealers have tried everything, from the subtle to the sublime, to do just that. In the fragmented media of the 21st century flooded with appeals made in newsprint, stuffed inside mailboxes and presented via television, radio and the Internet—the so-called traditional media—it can be difficult to make your message stand out above the din of all that background noise.
Jimmy Vee and Travis Miller, founders of the marketing agency Rich Dealers and co-authors of “Gravitational Marketing: The Science of Attracting Customers,” believe conventional use of traditional advertising does a pretty good job of reaching the estimated 2 percent of Americans looking to purchase a car at any given time. But what about the other 98 percent? That’s where Vee and Miller say thinking outside the box with unique ads and sales promotions, the two proposition components of marketing, can pay off.
“Same is lame,” said Vee of status quo advertising. He believes it lacks the force and effectiveness to appeal to the masses not actively searching for new transportation. “If you step past merchandising, you can reach them,” Miller continued. “Most dealerships approach traditional media as a place to showcase product and low prices.”Rather than offering the details of your inventory, which is like placing a slice of plain sandwich bread before someone with a satisfied appetite, dealers should be trying to enter the subconscious of the well-nourished buyer to suggest it’s time to eat again. For both independent and franchise dealers, the unconventional approach—either within the traditional media, where nearly 9 of every 10 dollars in the advertising pie are spent, or in the remaining sliver—may distinguish itself and touch just the right nerve in otherwise satisfied consumers, triggering an emotional response and a desire to begin car shopping.
Okay, but how is your dealership going to stand out from competitors and attract people who are already planning to upgrade their transportation? According to J.D. Power and Associates’ 2012 New Autoshopper Study (released in October), 4 in 5 of those prospective buyers are already researching on the Internet. So the Web, naturally, is a good place to start advertising. Following the lead of retailers outside the automobile industry?who embraced the Internet as a sales tool long before their car-selling counterparts—marketing gurus are pointing dealers to technology that profiles Web users and perhaps offers an opportunity to reach online shoppers before their competitors. Not exactly a novel concept in 2012, but neither is it old hat to auto retailers.
As for the other 20 percent of active car shoppers who are not scouting dealers in cyberspace, it may be another vehicle wrap, billboard, man in a chicken suit, restroom stall ad or any number of other unconventional approaches that breaks through the clutter and gets them to your lot first … and last.
“Other” media cost-effective
The automotive industry is king of the hill in the advertising world, spending more money each year than any other category of advertisers. In 2011, according to Kantar Media, one of the world’s largest market researchers, the automotive world—both dealers and manufacturers—outspent the big budget food and candy sector by more than two to one. The auto industry shelled out $13.9 billion to drive almost $700 billion in combined sales last year. But according to NADA Data 2012, an annual publication of the dealership advocacy and resource association, only 9.3 percent of the $6.37 billion new-car dealers dedicated to advertising in 2011 was spent on “other” advertising outside of traditional media. “‘Other’ is an all-other category that has everything from shopping cart advertising and transit ads to racecar sponsorships,” said NADA Chief Economist Paul Taylor.
While the wide-ranging “other” label may be the smallest single portion of promotional expenditures by franchise dealerships, over the last 20 years this category of advertising has sliced into traditional media’s share of the multi-billion-dollar advertising pie. “Dealers are experimenting with new ways to reach their traditional customer base and attract new customers,” Taylor said. “So it is not surprising to see the ‘other’ category growing slowly but steadily over recent years.”
Some forms of traditional media, particularly radio and television, can be very costly and are somewhat hamstrung when it comes to efficiently targeting a specific audience. It’s the “spray-and-pray” method of advertising, as Paul Potratz, owner of Potratz Partners Advertising, likes to say. Perhaps that’s why according to NADA, small dealers with fewer than 150 units sold annually were the only segment of dealers to find “other” advertising more appealing in 2011 than at least one form of traditional media. They spent an estimated $8,600 in the unconventional arena as compared to approximately $7,600 in TV or direct mail categories. Meanwhile, larger franchise dealerships dedicated the smallest fraction of their collective ad budget to “other” methods.
Manufacturers continue to spend less on advertising, and for dealerships, alternative means of advertising can often be the least expensive and most cost-effective. The average vehicle wrap costs $2,500 to $3,200, according to Cunningham of AutoTize. “It’s a low cost and good return,” he said. But new car dealers, so dependent on print, radio and TV advertising over the decades—spending 89 percent of advertising dollars between the three in 1991 and still pouring in more than half of their budget to the trio as of last year, per NADA Data 2012—have been reluctant to step outside the box. “It has been a hurdle to get dealers to come around,” Cunningham added. But those who have cloaked their parts delivery vehicles or courtesy shuttles in vinyl graphics, he said, seem to be impressed with their effectiveness. Vinyl graphics can also be used in larger-than-life displays on showroom windows and even on floors. Additionally, they have been popular attire for mass transit for years.
Drawing them in
Sometimes, it doesn’t take any money to launch a promotion to bring people to your lot. Some time ago, Auto Dealer Monthly asked dealers through multiple online forums what their most unique method of advertising has been. One of the more original responses came from a Michigan dealership and illustrates just how inexpensive advertising can be.
Three or four times a year, Hank Graff Chevrolet stages a “wreck” on the store’s street-front lot in Davison, Mich. While it may not be directly responsible for moving many units, it always grabs the attention of passers-by and generates community “buzz,” a term used on Madison Avenue to aptly describe this form of marketing. The stunt normally involves taking a four-wheel drive truck with oversize tires from inventory and ramping it up on top of one of the dealership’s junkers headed for the scrap yard, explains Tom Kelly, special events coordinator at the store. “(It) always drives traffic when we do this. Folks drop in, take pictures and a conversation starts,” he said. “We don’t often get one of those lifted trucks, so when we do, we try to do this.”
Such visual promotions are considered guerilla marketing, catching people off guard in much the same way as the large ribbons and bows sure to be sitting atop cars on lots across the country this month. Another example of guerilla advertising can be, well, gorilla advertising. Popular during promotions, large inflatables—sometimes in the shape of animals like the great ape—are a visual complement to the sales event. “It grabs people’s attention that pass by your store every day,” said Adam Daniels of Ads4Auto in San Diego. “Differentiating yourself on the roadside is key,” said Daniels. Tons of people may pass by every day that aren’t necessarily paying attention to TV, radio or the Internet, he added.
Ben Misra, general manager of the used car division of Plano, Ill.’s Dempsey Dodge/Chrysler/Jeep, said a man in a bird costume standing in the median and pointing to the dealership was the most unique advertising he’s seen. “The chicken suit was actually worn by the GM at the time at Watson Motorsports in 1994,” Misra posted on Auto Dealer People. “This dealer became one of most successful free standing used car dealers in the United States.”
Outrageousness, say marketing experts Vee and Miller, is commonly the missing component to an otherwise good sales promotion. Dealers may be pushing a big sale, but when the shoppers get to the lot, there may be no sign of anything special occurring, illustrates Miller. That can build mistrust. “(Sometimes) we just miss that mark at dealerships,” he said. The gimmicks need to complement the promotion, running congruently, Vee added. The pair said off-the-wall promotions may be hard to measure in terms of sales, but offered an explanation of how whimsical promotions breed success. “The dealership is excited. The customer gets excited. And the excited customer buys,” Vee concluded. “We’ve got to be authentic, but bigger than life at the same time.” However, that can be a fine line to tread, he admits.
Getting people to the store isn’t everything. Once there, shoppers aren’t necessarily sold on buying a car. Dealers must offer everything they can to make the customer feel welcome, whether through balloons for kids, snacks for adults or, more professionally, quality customer service. Many dealers have taken things a step further, going digital inside the showroom to give customers more of the information they seek. This is done through kiosks and e-tablets with access to information that can’t be found on the Internet or the dealer’s website. “Customers are very comfortable using things like (our) kiosks,” said Spectrio CEO Kleinhandler. “Some people even prefer that over talking to (sales staff).”
He added that his Oldsmar, Fla. company’s information stations are not intended to replace a salesperson, but simply enhance the sales process. “You can’t replace salespeople,” he said. In fact, the sales staff can use the tablets or kiosks just as effectively to inform themselves or walk the customer through information on a particular model or financing plan.
The digital kiosks can even be placed off-site in places like nearby shopping centers. Peters Auto Mall in Highpoint, N.C. recently installed kiosks in just such a place about 10 miles down the road, said Rich Moore of Marketing and Moore, the dealership’s marketing consultant. “It got the name out there, and (they) saw an increase in traffic.”
Back inside the store, dealers may make a television available in waiting areas to help customers pass time. But Tracy Tingue says that can be a big mistake for dealers. The vice president of marketing at Media Made for You, a Tempe, Ariz.-based marketing company, said what’s airing is usually cable or satellite television with spots from competitors filling ad time. “If (your biggest competition) walked through your front door and asked to advertise to your clients, you would tell him to beat it,” he explained. “Yet every day he sells your clients, within your walls, an average of 12 times an hour!” The answer to that is changing the programming to controlled content, he added.
Tingue’s company already has controlled content systems set up in dozens of dealerships west of the Rocky Mountains. Video is designed to look similar to ordinary programming, offering the viewer a constant diet of news, weather, sports, etc., while information on your dealership’s services and accessories crawls across the bottom of the screen or appears via in-screen boxes. Tingue said the system is relatively inexpensive and can even pay for itself if dealers wisely sell advertising to businesses they are not in competition with. The content can be controlled in real-time by the dealership, and operating the system requires minimal training.
Creative use of traditional formats
The realm of digital signage is offering dealers a 21st century advertising weapon, but there will always be a place for the unconventional use of traditional media. Dan Creamer, retired from the auto retail industry and living in South Jordan, Utah, said the best piece of advertising he was involved with was sending personalized letters to the local government employees of every town within 25 miles. He would thank them for their public service and offer special prices. “Our local police department of 120-some officers bought over 60 vehicles in the next two years and referred me more than that.”
Keith McKinzie, dealer principal of Sonju Superstore in Two Harbors, Minn. has also placed ads for Buicks, traditionally a car for more mature customers, on the obituary page of papers. “All my people said, ‘Oh, Keith ...’, but it worked. Older people scour the obit page, so focusing on models appealing to them helped to sell cars.”
“Advertising is about the right ad at the right time,” said McKinzie. And if done right, it can do wonders for sales, which means more revenue and success for your business. But, as SBA’s Running a Business puts it, “be warned: it is not a panacea.” Advertising may not be a remedy for all ills, but a few quirky, out-of-the-ordinary methods can help sell cars to people normally immune to ads, create an invaluable branding image and serve as a shot in the arm to a lackluster sales staff. And at the very least, it gives people something to buzz about.
Advertising expenditures by franchise dealers in 2011, by medium
Direct mail...................... 9.9%
SOURCE: NADA Data 2012
TABLE OR OTHER CHART
Advertising media used by independent dealers in 2011*
Specialty publications......... 26.0%
*Percentages do not add to 100 because dealers advertise multiple ways
SOURCE: 2012 NIADA Used Car Industry Report