Make the Most of your Marketing Dollars in 2020
With the end of the year fast approaching, you’re probably thinking about finalizing your marketing budget for 2020. According to NADA, the average marketing dollars spent per vehicle is around $628. To make the most of those marketing dollars, we’ve compiled some key trends and tactics for you to consider as you develop your budget for 2020.
1. Review your 2019 Budget and Performance
The first thing you should consider when budgeting for 2020 is to dive into your financial performance to plan from the previous year. Examine where you have received the best return on your investment from expenses such as ad spend, vendor partnerships, and more. But don’t be too quick to ditch vendors without careful consideration.
Ask yourself, “What did I hire this vendor to do?” and take the functionally of the product into consideration. For example, bounce rate. A bounce is generally considered a negative when it comes to Google Analytics, but this is not always the case. If a vendor sends a dynamic communication to a consumer, that consumer clicks on the communication, is directed to CONTACT US, then is immediately directed to the Google Maps app, this path would populate as a bounce. However, the vendor has met the expectation the dealer requested, to drive more traffic to the store. See the difference?
2. Evaluate your Dealership’s Ad Spend
Annual advertising budgets can be hundreds of thousands of dollars. That’s a huge chunk of your budget. Start asking tough questions and dive deeper into reviewing attribution. For instance, has your paid search budget reached the point of diminishing returns? Is it focused on the geography where people buy and where you already dominate market share?
63% of dealers spend their budget on online advertising. However, consumers are often annoyed by ads popping up while they’re surfing the web. The answer isn’t to eliminate ads but to utilize a marketing partner who creates dynamic, personalized content for each individual. Once an ad is relevant to a person’s needs, it stops being white noise.
3. Growth is Slowing for 2020, Plan Accordingly
According to eMarketer, the growth rate of vehicle sales and auto part sales will decline by 0.3% in 2020. While that might not seem like a large number, given many dealers have already been seeing a downturn, this additional slowdown may require adjustments for dealership marketing budgets.
There is a “Holy Grail” of missed opportunity that lives within the dealership’s database, and the key to unlocking those opportunities is creating a 1 to 1 relationship using personalized content. If 6 out of every 10 car shoppers enter the market unsure of which car to buy, and we know that car buyers spend nearly 60% of their time online researching, then it is imperative to create a unique brand experience for each individual in order to drive interest to the dealership.
4. Understand Trends for 2020
Having a grasp of where 2020 is going – how people will be buying and behaving and what vendors and solutions will help you meet those trends – is critical when you are creating your budget. For example, take this insight from Walker – “customer experience will supersede price and product as they key brand differentiator in 2020” – in other words, a well-connected personalized communication experience will no longer be an option but a strategic necessity for automotive dealers in 2020.
Outsell/Polk/IHS data shows that the average sales cycle has grown since 2000 from 6 years to almost 7.5. And more than HALF of owners defect from their previous dealer for their next purchase. Understanding trends like these will help guide your decision process as you create your budget.
5. Prioritize with Intention
What are your dealership’s priorities this year? Is it market share? Better retention? What are your marketing priorities this year? Sometimes too many priorities means no focus on any at all. Pinpoint the things that matter the most and create your budget around them.
Over 55% of dealers say that their highest priority is improving conversion. If that’s also true for you, then it isn’t about quantity of leads but quality. The truth is consumers expect to be listened to, known, helped, and connected with, not only at purchase, but throughout their lifecycle. Everyone walking through your door, everyone in your CRM and DMS, and all the potential prospects in your primary market area want and deserve that same personalized experience. How do you do it? Regardless of your plans for 2020, the first priority should always be to the customer.
6. Review your Lead Handling Processes
We know that “not interested” doesn’t mean “never” and CRM blasts with every lease special won’t cut it. Consistent brand awareness, relevant messaging, and allowing the consumer to take the driver’s seat when doing their research need to be at the forefront. With your current process, does it still work, and if it does, how do you know?
Whether you have a BDC or not, you need to review how well you’re handling your internet leads, your phone opportunities, your service department. Are you being reactive and only handling those who come into the store or are you being proactive? And don’t forget to review how well your team is doing with initial unsold showroom follow up.
There’s no silver bullet you can employ when developing your budget. What you can do is take the time to really understand what is going to provide the most return on your investment, and ultimately help your dealership succeed in 2020.
Contact us to learn more.