Men Flipping Burgers in Parking Lot

Considering that advertising is one of a dealer’s top three expenses, dealerships should carefully assess how they spend their advertising funds, and examine new ways to market their dealership to customers.

Rethinking Advertising Drives Traffic to Your Dealership

  • 8/30/2013

Advertising is one of a dealer’s top three expenses (along with rent and personnel) but advertising isn't getting the same level of scrutiny it did when dealers were struggling a few years ago. In fact, most dealers don't think about their advertising plan, they just renew the contract when the salesperson from the TV station comes into the office. She'll say, "Here's what you did last month — let's do that again." The dealer says, "Okay — let's do it," and they renew it on the spot.

I have one client who spent $30,000 a month on advertising, and had no idea. At first he didn't believe it. "I don't think we do that,” he said. But it's true. And after the sales rep comes to the dealer, the invoice gets paid as an automated bill every month and the expense is more or less forgotten. And a year later it is renewed without even thinking about it. We'd like to stop that mentality.

A few years ago, dealerships were examining every expense. I have said it before: if you were scrutinizing advertising dollars then, you should be doing it now, even as the industry thrives and it feels like a less important task. A radical way to rethink TV advertising would be cut it in half — even for one month, and then see if auto sales take a corresponding drop in that month.

Change advertising lanes

But people change slowly, so it's understandable that dealers are wary of discontinuing TV ads when it's the way it's always been done in the industry. They say, "We don't know if our TV ads work, but we're afraid not to do it." And an abrupt stoppage of advertising without a new advertising plan doesn't make sense.

However with so many more media outlets available (e.g., Google ads, text messaging, etc.) it's the right time to evolve dealer advertising. Dividing TV ad dollars across different media outlets will help dealers reach different buying audiences based on that audience's media preference. So let's talk about the audience segments.

Generational purchasing

Most people consult the internet when they are buying a car, but generally people don't buy a car straight from the web. The majority will still go to the dealership and bargain for a price, using the internet as an information source. So yes, dealer websites need to be good, but generally people won't buy a car off it. The goal here is to get them to come into the store. And the way people get into the store is changing and can be generally put into three buckets.

  • The over 55 buyer — He may start his search on the internet, but he wants to meet face-to-face and look someone in the eye when buying a car. He's used to the purchase being a drawn-out process, and is willing to spend half a day in the dealership before purchasing. For this buyer, relationships are important.
  • The 30 – 55 buyer — This shopper is just so darn busy. They are still willing to go to dealership and sit in a car to check it out, but they will have spent more of their pre-buying research on the internet, and are looking for a more efficient, professional relationship with a shorter transaction cycle.
  • The 30 and younger buyer — This one will seek online pictures, thoroughly read car reviews, and then try one or two. They'd prefer a texted picture or an email that delivers the information to them, and they generally don't want to interact with a showroom sales person until the very end.

A brand new way

Another way to view advertising is to see the dealership as a community hub for your town or city. A scenario where no sales pitch is involved. Think about these weekend promotional ideas:

  • Offer a free car seat review to showroom visitors to make sure the child safety seat is properly installed in vehicles.
  • Offer a fall carnival, with rides and games for the kids.
  • Try a happy hour special: beers and burgers to anyone who hasn't bought a car in the last five years.

These aren't ploys or sales pitches. When done right, community outreach sends the message that families are important. And once every six years, these families will naturally turn to these dealers when it's time to buy a new car. Times are very good in the auto industry, and it's time to rethink the way dealers advertise.