Swimming With Digital Sharks: A Complete Guide for Automotive Managers to Succeed in a Digital Age

By Brian F. Pasch

A complete guide for automotive managers to succeed in a digital age. DIGITAL SHARKS ARE EATING UP YOUR BOTTOM LINE! Knowledge is POWER! And this ”light on tech”, ”HEAVY on action” resource is designed to give managers the knowledge they need to defend against painful bites from the Digital Sharks looking to prey on your ad budgets. Use Swimming with Digital Sharks to get connected and engaged with online marketing trends.

• Language: English
• Publisher: BookBaby
• Release date: Dec 22, 2016
• ISBN: 9781483590950

Book preview

Conference

1. Introduction

Is This Book for You?

This book is for automotive managers who want to have more confidence in organizing, prioritizing, and optimizing their local marketing strategy. There are many demands on managers working in automotive retail and those demands continue to increase as the auto industry evolves to better serve the consumer.

Change is inevitable but the pace of change in automotive marketing has been dizzying over the past 15 years. What has not kept up with this change are continuing education programs regarding marketing strategies for franchise dealers. Managers need help integrating offline and online media investments. Are you dodging dozens of calls each week and trying to hide from vendors in the showroom selling new marketing tools?

While managers need to embrace change and new marketing products and services for their dealership, many lack the confidence to properly manage the conversation with sales professionals and Digital Sharks. Have you ever sat in on a product presentation about a new digital marketing strategy and felt uncomfortable with the words, acronyms, and implementation requirements that were discussed? Did you hide your discomfort?

Automotive managers need a safe place to go and tune-up their general marketing knowledge. Managers need a resource to guide them on how to leverage the latest online marketing strategies to increase showroom traffic. This book is designed to be a manager’s trusted resource for all things digital. This book is not a tactical guide for online marketing. Managers looking for specific tactical, step-by-step instructions should read my book Mastering Automotive Digital Marketing.

This book is designed to give managers the knowledge they need to stay connected and engaged with online marketing trends. It will provide benchmarks to compare monthly performance reports. It will become a shield to defend managers against bites from the Digital Sharks that might prey on their ignorance of digital marketing. Knowledge will allow you and your peers to swim in the shark tank without the need of a cage!

Why This Matters Right Now

I understand that there are many demands on your time but how many more months will pass without you knowing which digital marketing investments are working and which are not? How many more digital marketing reports will you accept that have no manageable or actionable data?

Maybe I should appeal to your entrepreneurial instincts for a minute to create a greater sense of urgency. The coming year will not be easy for owners and managers of franchise automotive dealers. I recently participated in a TrueCar Dealer Summit and had the opportunity to hear a gifted speaker, Ed French from AutoProfit LLC.

In his workshop, he challenged dealers in this way:

Interest rates will inevitably rise and you have to be prepared to outswim this looming shark. If you want to know what that looks like, add 3% interest to your floor plan expense. Add it to your rent factor and capital loans too. Now, if you don’t have strong digital engagement processes, where are you going to make up those increased expenses?

After the 2016 U.S. election, interest rates have already started to climb. In addition to Ed’s warning to dealers, let me add a few that you know very well: competition is increasing, warranty pay is decreasing, gross margins are thin, customer loyalty is declining, and soon there will be a tsunami of off-lease used cars flooding the market.

If you are like most managers, the past few years have been good in the car business. Now is the time for you to finally put your digital marketing investments to the test. When you do, you may find that 20-40% of your online marketing investments are misdirected or wasted. What is 25% of your digital marketing budget on an annual basis? Do I have your attention now?

Become a Dolphin

Have you ever thought about what sharks are afraid of? I never did, so I Googled it and found that Reference.com had an answer:

Sharks are afraid of dolphins when outnumbered because they like to eat animals that are much smaller than them, including baby dolphins, but adult dolphins will protect their young by trying to kill a shark any time they see one. Dolphins are usually successful at killing the sharks that they find because they attack in groups, ramming their bodies into the shark until it dies.

Dealership owners and their managers must start acting like dolphins. I hope this book will be a catalyst to educate and unite dealership managers to protect their marketing budgets from Digital Shark attacks. If all the managers in your store can recognize when a shark is swimming in their local waters, you will be able to save time, money, and gain a competitive edge!

When you finish this book, you will find that some of your marketing partners and OEM mandated programs are not producing acceptable traffic to your website. You will find that you are paying for minimally engaged shoppers and BOT traffic. What can you do alone? Most likely nothing in regards to OEM programs, just like a single dolphin will have a hard time killing a shark.

Yet when hundreds of dealership managers are educated, empowered, and united in protecting their digital real estate, change can occur. OEM marketing directors need to be educated as well. Our industry must start focusing on traffic quality and not only on quantity (Chapter 2). We must move away from last-click attribution reporting and embrace multi-touch sales attribution (Chapter 3).

Do you want to be able to defend your store and its baby dolphins (dollars) against shark attacks? If so, this will be the best reading investment you will make this year!

What Are You Marketing?

This may seem like an odd question to ask, but take a moment to think about your answer. Do you have a clear marketing message that resonates with consumers in your local market? Is your message significantly different from other local franchise dealers? Do you have consistent branding and merchandising online and in your showroom?

There are three key characteristics of the best-in-class automotive marketers:

1) They have a clear sense of identity. Every person and customer that interacts with the store knows this identity because all employees can articulate it clearly. What is yours? Are you the low-price leader? The highest volume dealer? An experienced dealer or deeply rooted in your community? This is essential to know as all your marketing messages need to be consistent with this identity.

2) They execute integrated marketing. All their marketing messages from TV, to showroom stickers, to vehicle comments on classified sites, all relay the same branding and messages. Are you running an end of month special? Are you promoting a specific cause or factory incentive? Are you highlighting how easy it is to buy a car?

3) They take the time to internally market. All your marketing efforts fall apart the moment the consumer enters the showroom and receives a different branding message than the one you promoted. All the employees of your dealership are part of your marketing machine. Your BDC first-responders know there are better answers than ‘Not available’ when a customer asks about a car you don’t have on the lot anymore. They understand the cost of driving that consumer to their phone and the value of great customer service. Your sales team members know (and practice!) the perfect opening word track when they first greet a prospect on the lot.

If you don’t have a clear and valuable value-proposition to local consumers, all your marketing investments will be marginalized. Digital marketing should be an extension of your brand experience that has been built over the years. Online marketing has also forced many of your peers to change their overall marketing strategy because their old marketing messages failed to connect with today’s online shopper. Is your marketing message relevant?

Marketing appeals that used to draw consumers into the showroom like lowest prices anywhere or largest selection on the West Coast can be quickly validated through visiting local dealership websites. Inventory syndication websites like Autotrader.com and Cars.com have made it easy for consumers to shop for the exact vehicle that they want in the comfort of their home or office.

Since the way consumers shop for vehicles has changed, have you taken the time to revisit your local marketing strategy? Have you created consumer focus groups to see which marketing messages are of interest to auto shoppers in all age groups? Are you relying on OEM turnkey digital marketing packages that present the same exact message for all franchise dealers in your market?

Do you want to accelerate your consumer experience? The best-in-class dealerships regularly invite recent customers back to the showroom and ask them what they could have done better. Every manager is present. This is a great opportunity for you to find out what drew a customer into the showroom.

This book will outline the many opportunities and strategies at your disposal to connect with local shoppers. However, your marketing message must be relevant. If you don’t feel that your marketing message is crisp and relevant, get some ideas from agencies that serve franchise dealers. If your agency has not kept up with the times, get a new one. If your advertising philosophy is solely based on price and payment, or the size of your inventory, you will not be able to leverage all the great ideas in this book.

Finally, this book has one important goal: To transform you into a best-in-class marketer. What makes a best-in-class marketer? They are analytical in their decision making and rejoice in both failed and successful marketing tests. In other words, they don’t always get it right the first time, but learn through trial and error how to optimize marketing spend. It is my goal to help shortcut the path while also building your knowledge to create a strong defense against Digital Sharks!

Quick Vocabulary Refresher

This book is designed for dealership managers. I previously mentioned that I will avoid sharing complex vocabulary, acronyms, or assigning you tasks that are the responsibility of a marketing manager. With that said, there are a few terms that we should all agree on before moving ahead with this book.

Digital Shark – A digital technology provider that is adept at convincing dealers to buy their software, advertising etc. Not all Digital Sharks are bad. I’m your mentor to prevent them from taking a bite out of your marketing budget without delivering on their promises.

Dealership Website – is your primary franchise website that is compliant with OEM standards and guidelines. Your franchise may be required to use a single website provider or you can select a website from a list of approved companies. Your website is your virtual showroom that connects your products and service to online shoppers.

Website Traffic – is the collection of visits to your website; called sessions in Google Analytics. Website traffic is commonly broken up into these sub-categories:

   Direct – a consumer types in your website address on a browser and skips using a search engine.

   Organic – a consumer uses a keyword in a search engine to find your website.

   Paid – a consumer clicks on an online advertisement to arrive at your website. Paid traffic can come from several sources including Google AdWords, Facebook, Twitter, etc.

   Referral – a consumer clicks on a link from another website that is not part of a paid advertisement. Referral traffic can be further broken down by social, email, etc.

Common Metrics for Websites

Time on Site – is the time that a consumer stays on your website as calculated by Google Analytics. The time counter starts when the consumer arrives but is not calculated until the consumer visits a second page. Consumers who only visit one website page have a calculated time on site of zero seconds.

Bounce Rate – is the percentage of website sessions (visitors) that only visit one page on your website.

Conversions – are discrete channels by which consumers start a two-way engagement with your dealership. Conversion events that we will cover in this book include showroom visits, service visits, phone calls, website form submissions, email messages, chat sessions, social messaging, and text messages.

Landing Page – is the first website page that a consumer sees after clicking on your ads. Landing Pages can be on your website or on a specialized microsite used by your agency to increase conversion rates.

Deep-linking – is the creation of an enticing hyperlink that takes a consumer directly to a Vehicle Detail Page (VDP) on your website from an ad or a third-party website, like Cars.com or LotLinx.com.

Tools and Advertising

Google Analytics – is the up log for your virtual showroom: your website. It is a free software program that shows the activity of consumers on your website. The software can also be configured to track how many lead forms, phone calls, and chat sessions are generated each day. The amount of data that Google Analytics collects, and how it reports that data, is heavily dependent on how you configure the software. You should make sure that Google Analytics is properly installed on your website; call your website provider. You will need it to fully leverage the strategies that I cover in this book.

Google Analytics’ Goals & Events – are actions, configured in Google Analytics, that consumers take on your website which you deem to be valuable. For example, if a consumer submits a lead form, this action could trigger an event or goal in Analytics to increment. By setting up goals and events in Google Analytics, you can see which traffic sources are generating the outcomes that you believe will help you increase sales.

Google Tag Manager – is a free software tool that allows you to track consumer engagement on your website. Tag Manager scripts are added to your website by your website company to trigger Google Analytics’ events for consumer actions, like viewing vehicle photos on a VDP, playing a video, or clicking on a Trade-In tool button. Tag Manager allows you to measure the engagement of the consumers who visit your website.

Google AdWords – is an online advertising platform that allows your dealership to promote its business online. Google provides tools to allow you to advertise on its search engine, on YouTube, in Gmail accounts, and on millions of websites that partner with Google to allow your ads to be shown to consumers. Your dealership most likely uses an agency --often OEM approved -- to operate your AdWords campaigns.

   SEM Ads – Text ads that appear on Google search results that have the green Ad Icon before the listing (See next page for examples).

   Display Ads – Graphic banner ads that are found online.

   Pre-Roll – Short videos that play before your intended video.

   Retargeting – Following consumers with your ads after they have visited your website or conducted business with you.

Attribution and Multi-Touch Attribution – assigning marketing influences to a specific set of consumer actions or conversions. Last-click attribution models give credit to the last source that brought a consumer to your website or showroom. Multi-touch attribution models will spread credit across the multiple marketing influences that a consumer was exposed to, for example Google AdWords, Facebook, and cable television advertising.

Key Performance Indicators (KPIs) – are metrics that are important in measuring the effectiveness of your sales and marketing investments. Think of KPIs as a list of metrics that you should be inspecting on a regular basis to guide your dealership. There are thousands of metrics that you could track, but your KPI list is what you manage from and direct your team to achieve.

Social Media Advertising – in the context of this book, refers to a list of popular social websites that dealers can use to advertise to consumers. The current list includes Facebook, Twitter, Instagram, and YouTube.

Vendors – are companies, also called agency partners, that your dealership uses to operate its business. Vendors can include your CRM platform provider, website provider, and your advertising agency, among others.

Tiers – a phrase used to describe the advertising channels in the U.S. automotive franchise model. Tier One is advertising by the manufacturer. Tier Two is advertising conducted by Local Marketing Associations (LMA) to promote dealers in a geographical region. Tier Three is advertising conducted by franchise dealers to promote their own location.

Return on Investment (ROI) – is the ratio of the profit vs. cost of a marketing spend. For example, if a $3,000 advertising campaign yielded 15 car sales, at a gross profit of $30,000, the ROI would be 10x.

Getting Organized

Welcome Managers. Digital Sharks are sales professionals that will take advantage of your ignorance in digital marketing and technology. Before you mark your calendar for another shark presentation, you must be prepared.

I invite you to sail the shark infested waters on the deck of my ship the S.S. Confidence. Enjoy a better view while some of your peers are swimming for their lives in the rough ocean currents. You might not feel confident speaking about digital marketing right now, but by the end of this book you will develop the confidence you need to lead your team in this digital age.

The marketing waters are not completely filled with sharks. It goes without saying that there are many reputable digital marketing sales’ professionals that have the dealer’s best interests in mind. However, I have seen good intentions turn against dealers when large commission checks are promised for monthly or quarterly sales goals.

Step #1 – Organize Your Vendor Data

To build a strong defense against Digital Sharks, create a spreadsheet of all your current marketing and technology investments. You may already have much of this work done in the form of a budgeting spreadsheet, but it will not have all the information I am asking you to have in hand.

Your spreadsheet should list each vendor that is part of your online/offline strategy, and have the following data on each line:

   Vendor Name & Website

   First date of contract

   Contract expiration date

   Cancellation Policy

   Monthly Recurring Cost & Co-Op Eligibility

   Associated Costs

   Account Login & Password

   Account Manager Name & Contact Information

   Report Delivery & Frequency

   Key Performance Indicators (KPIs)

   Guarantees/Promises

By creating this spreadsheet, you will be forced to review what you have in place. You may also realize that your vendor information was never cleanly organized in one place.

Step #2 – Download My Spreadsheet Template

You can download a template of this spreadsheet using this link: http://bit.ly/DigShark1. When you complete the spreadsheet, I hope you realize how important it will be to keep this spreadsheet up to date. You may want to create a process that when new vendor contracts are approved and added to your budget, someone from accounting must add that data to this spreadsheet.

Store this spreadsheet in a Dropbox folder or Google Drive that you control. This will allow you to access the spreadsheet at your 20-Group meetings or when you are working from home.

Most of the fields on my spreadsheet are self-explanatory; a few may be unclear, so let me highlight them:

Associated Costs – Sometime products you purchase will have a requirement that another product must be purchased through a separate company. For example, your SEO consultant may suggest that you purchase your own www.Yext.com account. If you decide to cancel the SEO consultant’s services, you should have some note on file that allows you to decide if you want to keep the Yext.com service to synchronize all your online business directory listings.

Key Performance Indicators (KPIs) – These are the metrics that your vendors tell you are important to measure the success of their product. For example, a new chat vendor might claim that 1.5% of all traffic will engage with their proactive chat service.

The chat conversion metric is a KPI that you should record in the spreadsheet and inspect each month. If after 3 months, only 0.5% of the traffic is converting, you can make the case to get a refund or demand that the chat service delivers on its promises.

Guarantees/Promises – Record the promises that were made when you signed the contract. Of course, you should also include guaranteed performance claims in the official contract. If your website vendor claimed to be able to increase your organic leads by 50%, or you could get your money back, write that promise here.

With the spreadsheet completed, you are now better prepared to discuss new products, services, or contract extensions. Keep in mind that as you approach a contract renewal period, it is often a good time to schedule a meeting with your vendor and review the account performance reports.

Don’t wait till the last minute, because if you decide to change vendors, it can take up to 90 days to get a suitable replacement. This is especially true when you decide to change website vendors.

Step #3 – Collect and File Monthly Reports

I recommend that you work with your marketing manager or directly with your vendor partners to create an online directory for your monthly marketing reports. Ask to get the reports as a PDF or Excel report. Do not use your email box as your organization tool.

Create a Dropbox or Google Drive with a main folder called Vendor-Reports. Under this main folder create a sub-directory for each vendor, and place the reports in a folder for each year.

Vendor-Reports

>Cars.com

>2015

>2016

>2017

>Google AdWords

>2015

>2016

>2017

>Facebook Advertising

>2016

>2017

>CarChat24

>2016

>2017

>Conversica

>2016

>2017

If you have never used a cloud based file storage system like Dropbox, ask for help. Having immediate access to critical business files is important.

File Naming Conventions

Name your vendor reports in a consistent way so that you can easily find them in a folder or by searching your online storage system. One example of a naming convention is year-month-vendor.pdf. Your Facebook PDF reports would look like this:

•   2016-Nov-Facebook.pdf

•   2016-Dec-Facebook.pdf

•   2017-Jan-Facebook.pdf

Identify the Critical Metrics: KPIs

When you organize your monthly reports, take the time to review the data and metrics contained in the latest report with your vendor account manager. Highlight the metrics that they claim are actionable on the document, and add the metric(s) to your KPI column in the Vendor-Reports.xlsx spreadsheet. If you don’t know how to electronically highlight in yellow a section of a PDF document, ask your account manager to show you.

If you don’t identify the critical elements of each report you might as well never look at the report. Do not waste your time reading every detail on your reports. It will not help you get better at managing your marketing investments and you will have less time to get your work done.

Most of the data contained on vendor monthly reports is not actionable. Prioritize your time by inspecting and highlighting the areas of the report that contain metrics that you understand and can adjust.

For example, focusing on the number of impressions in your Google AdWords campaign is a waste of your time. Focus your review of Google AdWords investments by seeking out metrics that indicate the quality of your campaigns. After reading a few chapters of this book you will likely find that all your AdWords reports were incomplete; they never provided you metrics to measure traffic quality.

You Can Now Measure Engagement

In the upcoming chapter entitled Focusing on Engagement, I will make my case for upgrading your marketing discussions to focus on website visitor engagement. In the summer of 2016, I started the PCG Engagement Project at the urging of a large dealer group who asked me to create a set of standards to inspect the ROI of their online advertising strategies, managed by multiple agency partners.

What I discovered was that the current metrics you see on your marketing report do not enable you to inspect website traffic quality. Most marketing reports detail the quantity of ad clicks, page views, lead form submissions, and dollars spent. I realized that you need new tools, a digital compass, to direct your sales strategy in an ocean filled with Digital Sharks.

Recently a Dealer Principal said to me:

In the past, when my website traffic increased, so did our sales. Today, I am spending more to increase my website traffic, but I’m not selling more cars. Why?

Have you ever asked yourself that same question? Have you come to any conclusions why an increase in traffic to your website is not related to a proportional increase in showroom traffic and sales? I have answers for you in this book. One answer is that dealers are purchasing products based on slick marketing presentations from digital sharks that have poor quality.

The PCG Engagement Project has created new metrics that will make inspecting the quality of your marketing investments easier: Cost per Engagement (CPE), Engagement per Session (EPS), and Zero Engagements per Page (ZEP). Learn more by visiting: http://vistadash.com/pcg-engagement-project/

Wouldn’t you agree that the cost of the click is less important than what actions each consumer who clicked on your ad takes on your website? If you don’t understand why I am asking that question, be patient. My upcoming discussion on engagement will make you wonder why measuring website engagement wasn’t part of your marketing analysis in the past.

I challenge you to accept my offer to implement a Cost per Engagement¹ (CPE) calculation for all your paid marketing channels. I believe CPE, EPS, and ZEP data will revolutionize how you will inspect your marketing investments. The good news is that many industry leaders have agreed to embrace the PCG Engagement Project metrics that would help you build more effective marketing campaigns.

Step #4 – Collect Feedback

Managers often inherit marketing tools and agency partners when they take on a new role in the dealership. The most common knee-jerk reaction for a new manager is to fire all the existing vendors and pick new ones. Please never do this! There are serious repercussions when you fire vendors that control historical data or who have products that are working.

Once you have organized your vendor data and marketing reports, and have narrowed down the Key Performance Indicators (KPIs) that you will inspect each month, start asking your staff for vendor product feedback. Ask them about the value of the products you have in place and if they are helping the team achieve their business goals.

If there are issues with customer service, address them with your team and the vendor in the same room or via a conference call.