nada marketing class presentation 3 25 10

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Auto Dealer Marketing Dennis Galbraith

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This presentation is being used for the NADA Academy. A related workbook is available to class participants,

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Page 1: NADA Marketing Class Presentation 3 25 10

Auto Dealer Marketing

Dennis Galbraith

Page 2: NADA Marketing Class Presentation 3 25 10

Agenda1. What Is Marketing?2. Setting Advertising Budgets3. The Two Objectives of Dealer Advertising4. Why Measurement is Difficult and What to Do About It5. Marketing Strategy6. Identify the Dependencies within the Elements of Your

Marketing Mix7. Is Your Marketing Mix in Sync?8. Using the Preference-Engagement Matrix to Evaluate

Advertising Alternatives and Direct Creative9. Using the Information Wheel to Justify or Reject Advertising

Alternatives10. Is Your Advertising Mix in Sync?11. Merchandising Online Inventory (a budget allocation

perspective)12. Coop Eligibility

Page 3: NADA Marketing Class Presentation 3 25 10

1. What Is Marketing

Page 4: NADA Marketing Class Presentation 3 25 10

MarketingProduct

PromotionsPrice

Place

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InterruptionAdvertising

InterruptionAdvertising

Listen MatchMake

Demonstrate Close

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InterruptionAdvertising

Listen MatchMake

Demonstrate Close

Sales Integration

Online Sales ProcessOffline Sales

Process

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2. Setting Advertising Budgets

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Dep

en

den

t

IndependentSa

les

AdvertisingA

dve

rtis

ing

Bu

dge

t

Sales

The advertising budget should be determined by what it takesto make next month’s sales numbers in the most cost-effective way.Last month’s sales are irrelevant.

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BrandingUSP

Traffic-NowWhat kind of vehicle should I buy?What brand should I buy?What model should I buy?Who has the right vehicle for me?Who has the lowest price on the vehicle I want?Who has the best overall deal for me?Who can finance me?What vehicles does my preferred dealer have?

Push

Pull

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96%

4%

Community

Not In-Market In-Market Shoppers

Branding

Traffic-Now

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Objective Based Budgeting

1st Cut – Fit Objective

2nd Cut – Cost Effective

4th Cut – Most Cost Effective

3rd Cut – Creative Fit

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4. Why Measurement Is Difficult and What to Do About It

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“Half my advertising is wasted…”

- John Wanamaker

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Advertising Investment

Advert

isin

g R

etu

rn

Underinvestment

Overinvestment

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Measuring Traffic-Now Advertising

Cost per ____________________

Does the medium work?Cost / lowest-funnel traffic metric the source can be held accountable for (quantity)

unit of traffic

Cost per VDP Cost / VDP

Cost per Contact Cost / (Phone + Email + Chat + Walk-in)

Walk-in Contacts 1. (Phone + Email + Chat)/22. Map Views + Ad PrintsBoth are conservative estimates

Page 17: NADA Marketing Class Presentation 3 25 10

Do we work it?Cost / (best metric available for sales or sales process)

1. Cost per Sale = Cost / SalesFair to vendor? NoImportant consideration? Yes, if sourcing is good enough to do it.

2. Cost per Appointment = (Cost – (value of walk-in traffic)) / Appointment

a. value of walk-in traffic = amount of traffic * individual customer value

(compare to kept appointments)

If you can’t close the traffic to the point that it is cost effective,a. Stop the advertising until you can fix your operations, orb. Lose money on the advertising in order to keep your best people while

you weed out the problems

Page 18: NADA Marketing Class Presentation 3 25 10

Reach

Freq

uen

cy

CPM = Cost Per Thousand

ECPM = Effective Cost Per Thousand

Measuring Branding Advertising

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Page 22: NADA Marketing Class Presentation 3 25 10

Product

Price

Promotions

Store Operations

Highest possible gross

Buy for a high cost to market gap

May not be competitive on listings if not buying right

May use price leaders in newspaper display

Branding message: service or some other non-price criteria

No branding if skimming

Negotiations training

Objections handling relative to price

Page 23: NADA Marketing Class Presentation 3 25 10

Product

Price

Promotions

Store Operations

Fastest possible turn

In demand with acceptable margin when priced below market

Low market days supply

Larger store may be able to carry some vehicles with low demand

Branding message: price compared to a baseline

Traffic-Now advertising with great merchandising

F&I

Demonstration of value with documentation

Use of internet to show market comparisons

Internet on the window

Page 24: NADA Marketing Class Presentation 3 25 10

Product

Price

Promotions

Store Operations

Best total, long-term profit

Metro, large

Cost to market is favorable

Low market days supply, beyond core inventory

Not afraid to carry vehicles with low demand

Branding related to competitive price, or

Traffic-Now advertising with great merchandising

Demonstration of value with documentation

Use of internet to show market comparisons within 100 miles +

Internet on the window

Carry used luxury vehicles if value is right

Competitive for 50 miles+

Rapid process for getting vehicles merchandised and online

Branding related to pricing policy

Consider one-price policy

Page 25: NADA Marketing Class Presentation 3 25 10
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Product

Price

Promotions

Store Operations

___________________________________________

______________________________________________

______________________________________

_______________________________________

_____________________________________

____________________________________________

_________________________________________________

_______________________________________

________________________________

___________________________________

________________________________________________

_________________________________

___________________________________

_______________

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8. Using the Preference-Engagement Matrix to Evaluate Advertising Alternatives and Direct Creative

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Page 29: NADA Marketing Class Presentation 3 25 10

9. Using the Information Wheel to Justify or Reject Advertising Alternatives

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TV http://www.youtube.com/watch?v=2I_cFrkr1QE

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Page 36: NADA Marketing Class Presentation 3 25 10

Skimming strategy. (no branding, price for gross)Franchise attracts older shoppers (Buick, Mercury, Cadillac, etc.)No chat. No consistent email handling process.

Online Classified

Vehicle Merchandising

Print

Leads

Website

Search and/or BTDirect Mail

Television

Radio

Outdoor

Online display (not in-market exclusive)

Newspaper classified

Page 37: NADA Marketing Class Presentation 3 25 10

Service strategy. (branding related to extraordinary service, price for gross)Highline Franchise

Online Classified

Vehicle Merchandising

Print

Leads

Website

Search and/or BTDirect Mail

Television

Radio

Outdoor

Online display (not in-market exclusive)

Must reflect both the luxury status of the brand and serviceImage of the store.

Aimed at shoppers considering the brand.

Focused on USP related to customer service

Focused on USP related to customer service

Focused on USP related to customer service if 4 words or less

Reflective of brand and image for customer service

Only if there is a dedication to merchandising and rapid lead response

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How many contacts from the services requiring merchandising _________

Contacts are:Phone callsEmailsChatsWalk-insWebsite Transfers

Cost of the service _________

Cost per contact _________

Can my operations handle more contacts? Yes__ No __

Cost of improved merchandising _____

Cost of improved merchandising/highest acceptable cost per additional contact _______

Result is the breakeven amount of additional contacts necessary to achieve the cost-per-contact benchmark. Is this a reasonable expectation?

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Existing Options NewOpportunity

Co

st p

er C

on

tact

Average

Margin

Break-even

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Page 42: NADA Marketing Class Presentation 3 25 10

Existing Options NewOpportunity

Co

st p

er C

on

tact

Covered by Co-op