nada marketing class presentation 3 25 10
DESCRIPTION
This presentation is being used for the NADA Academy. A related workbook is available to class participants,TRANSCRIPT
Auto Dealer Marketing
Dennis Galbraith
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
1. What Is Marketing
MarketingProduct
PromotionsPrice
Place
InterruptionAdvertising
InterruptionAdvertising
Listen MatchMake
Demonstrate Close
InterruptionAdvertising
Listen MatchMake
Demonstrate Close
Sales Integration
Online Sales ProcessOffline Sales
Process
2. Setting Advertising Budgets
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.
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
96%
4%
Community
Not In-Market In-Market Shoppers
Branding
Traffic-Now
Objective Based Budgeting
1st Cut – Fit Objective
2nd Cut – Cost Effective
4th Cut – Most Cost Effective
3rd Cut – Creative Fit
4. Why Measurement Is Difficult and What to Do About It
“Half my advertising is wasted…”
- John Wanamaker
Advertising Investment
Advert
isin
g R
etu
rn
Underinvestment
Overinvestment
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
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
Reach
Freq
uen
cy
CPM = Cost Per Thousand
ECPM = Effective Cost Per Thousand
Measuring Branding Advertising
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
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
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
Product
Price
Promotions
Store Operations
___________________________________________
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8. Using the Preference-Engagement Matrix to Evaluate Advertising Alternatives and Direct Creative
9. Using the Information Wheel to Justify or Reject Advertising Alternatives
TV http://www.youtube.com/watch?v=2I_cFrkr1QE
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
Leads
Website
Search and/or BTDirect Mail
Television
Radio
Outdoor
Online display (not in-market exclusive)
Newspaper classified
Service strategy. (branding related to extraordinary service, price for gross)Highline Franchise
Online Classified
Vehicle Merchandising
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
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?
Existing Options NewOpportunity
Co
st p
er C
on
tact
Average
Margin
Break-even
Existing Options NewOpportunity
Co
st p
er C
on
tact
Covered by Co-op