When Logic Says Cut

Whenever business hits a down-swing, most dealers cut expenses. Typically, marketing is the first to go. The challenge is to find and cut the fat, and invest more aggressively in the muscle. Marketing at least some programs is unquestionably muscle. But, which programs? Where do customers come from? Most of us don't know, simply because we don't ask or investigate. Finding the Muscle Learning what

Whenever business hits a down-swing, most dealers cut expenses. Typically, marketing is the first to go.

The challenge is to find and cut the fat, and invest more aggressively in the muscle. Marketing — at least some programs — is unquestionably muscle. But, which programs? Where do customers come from? Most of us don't know, simply because we don't ask or investigate.

Finding the Muscle

Learning what brings customers to the dealership is a fundamental part of any sales process. It doesn't require costly surveys or programs, but simple questions and a bit of sleuthing.

Questions every salesperson — cars, service, and parts — should ask each customer:

  1. What brought you to us today?
  2. Did a friend refer you?
  3. Did you hear about someone who bought from us? Who? We'd like to thank him.
  4. Did you see our ads, mailers, etc.? Which ones?

Service advisors should pay attention and investigate vehicles for clues: What radio program was on when the car was brought in — drive time news, sports talk radio, etc.? What stations are pre-programmed?

Collect information over time to monitor changes in customer preferences, and identify new methods that may prove successful. It will help you know where to effectively spend your money. Figure out what works, enhance it and eliminate what doesn't.

Increasing Effectiveness

Effective marketing uses the right vehicles to deliver the right messages to the right audience — every time. Dealers have a plethora of marketing tools available today from multi-media to traditional print and networking. In APB's experience, different vehicles reach different customers, requiring dealerships to create programs that blend a mix of tools based on what they learn from customers.

Try out-of-the box tools — billboards (provide 24/7 visibility for less than the cost of one full-page Sunday ad), relationship builders such as customer clinics (how to maintain your car to maximize fuel efficiency) or appreciation days (Thank you parties to thank customers and showcase new features at the dealership); sponsorships (community involvement, celebrations, fundraisers).

Messages

Messages should tell customers why a dealership is unique, rather than simply piggybacking on current issues or selling on price. resonate and drive action. For example, a family of eight might need rugged and roominess more than image. A retiree on a fixed income may want fuel efficiency over size. A business executive might desire status over practicality.

Audiences

Most customers live within a five to seven mile radius of their metro dealership, and within 30 miles of rural dealerships. Others limit their shopping territories by convenience or natural boundaries (crossing a river). Media today offer target marketing programs that allow advertisers to select specific regions, neighborhoods, or locations, typically at lower costs than full-reach ads. This is true for newspapers, Internet advertising, TV/radio and other tools. Knowing the customer and targeting communication within their territories maximizes a dealership's value and return.

Arbitrarily cutting marketing simply because a market is down may contribute to declining sales.

With some simple questions (sometimes all we have to do is ask) and a bit of sleuthing, dealers can make wise decisions that reduce expenses while aggressively investing in programs that drive traffic, differentiate the dealership, and add to the bottom line.

Richard F. Libin is president of APB-Automotive Profit Builders, Inc., and can be reached at [email protected] or 508-626-9200.

Questions or comments about this column? Send us an e-mail at [email protected].

TAGS: Dealers Retail
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