I have a distinct feeling that some dealers believe achieving online success may be a flash in the pan. These dealers (owners) must have a chemical imbalance passed onto them from their fathers and family members before them to believe e-commerce is a trend. Many struggling owners learned from an older generation that didn’t have to adapt as quickly to newfound technologies and, therefore, lived well by sticking to tried and true advertising mediums. There is a major problem facing many of today’s owners that has a greater affect on their long-term goals than the economy does. It is their judgment. I can only assume this problem is genetic.
I hear from ISM after ISM across the country that buy-in from ownership continues to be difficult. Dealers just won’t know what they don’t want to learn. Many dealerships have one person handling incoming leads. They buy a few third party leads, place some inventory on an AutoTrader or Cars.com, and have a mediocre website. These dealers achieve their same old 12-14 cars sold off the internet each month – reaching a 10% closing ratio – and feel that they are in the game. Those of you reading this know that they aren’t even in the ballpark. There is so much more that can be gained from dedicating a significant portion of ad dollars to online initiatives and e-commerce training and the proof is in the profits, process, and testimonials of the top dealers.
I write for Digital Dealer magazine and recently left a dealership to start my own digital marketing consulting firm, DealerKnows LLC. The documented numbers I (and my team/department) had achieved there put the dealership in the upper echelon of successful Internet dealers. When I write, it is usually a rant like this where I am trying to accomplish/win an argument or struggle I was having. Through my meandering writing, I’ll find my answer. In this case, I know what the answer is. Genetics.
I was speaking to a close friend and internet professional whose dealer sent out a 60,000 piece mailer. Yes, you heard me correct. A 60,000 piece mailer. $30,000 or so in cost. During my friend’s time there, he constantly warned them that their dedication to paper (consistently spending 70% or so on newspapers, direct mail, etc.) was going to have a negative impact on their bottom line and they didn’t listen. On my few run-ins with this dealer during consulting, I too stressed their need to dedicate more money only. Time and again, they’d spend their money on paper products only to prove my friend and I right. They would have their tri-weekly full-page newspaper ads and their 10,000 piece “customer appreciation” mailers where past customers were told to come in and pick up their free set of steak knives or whatever. They expected their sales crew could convert the type of people that drive 10 minutes for a $3 set of knives – they were consistently incorrect. This $10,000 cost would equal one sale at best. (My friend’s department was responsible for tracking this monthly futility as all quality ISMs and IDs carefully looked at ROI. – $10g spent on direct mail a month would = $1g in profit. Where is the sense in that?)
Very recently, my friend left this dealer – support issue if you can believe it – and, just because this valued employee and his “team” that brought online success to the dealership had left, it doesn’t mean one must give up hope and go back to old tendencies. Direct mail may have always been in their blood, but a 60,000 piecer?! It’s gotta be a problem with the DNA that makes you choose to do this. So I learned the result of their massive mailer was, wait for it, 2 cars sold. That is correct. Two cars. $30g = $3g… maybe. I’d call up and shout out an “I told you so” or a “You still aren’t listening to us?!”, but it’s not their fault. It’s genetics.
Does losing the majority of an internet team (others left once my buddy had chosen to take a leap) mean you must go back to the ways of the wild, wild west? No. Processes were in place. Websites could have been updated. Leads were still coming in. However, this unnamed dealer had reverted back to what they knew. What their family and their family’s family before them knew. They went back to paper.
This, my first blog, is not meant to be a rant against dealer ownership. After all, I still would like to think I have good relationships at my former dealer (though I was recently just denied from filming any more of my car sales-comedy sketches in their place of business – no reason given) This also isn’t a blog to rip direct mail or newspaper – which may have its time and place – (in my opinion – newspaper ads can be printed during big holiday days and direct mail sent once a year). No, I hope this writing alerts dealers to the fact that unwise thinking never benefits them, no matter what their condition. Before I left, my department received 25% of the ad budget toward internet initiatives and would consistently yield over 60% of store sales (and up to 85% one month). Even without us, an upheaval in staff can be survived. Sure, dealerships are selling half of the cars per month they did in their heyday. You’d think they’d want to dedicate their ad money to something able to be tracked. The economy will turn around and consumers will once again walk through your door.
Turning their back to what works in today’s time and gravitating back toward the paper-type advertising in play when their ancestors were alive will not their store survive. (Wow! That sounded like a sentence written by Cormac McCarthy. I’m proud of myself. Written just how I wanted it.)
I don’t like taking an article like this to “the streets”, but I believe, during these difficult economic times, dealers must look in the mirror. They must look at what is within themselves and decide if their decisions (be it caused by faulty wiring or the wrong synapses firing) are what’s really the root of the problem. I think poor judgment (similar to what was described above) has to play a significant part. (60,000 pieces! $30,000?! It serves a dealer right to have a $3,000 or so return on that poisonous investment. You give an internet professional $30g and they’ll turn it into $300g.) It doesn’t take a genius to figure that out. Just someone with good genetics.