Dealership Commercial Truck Departments Are Essentially Left Out of Most Dealership’s Marketing Strategy
Most new vehicle dealerships have a robust marketing plan that commonly exceeds their co-op matching from their manufacturer. They spend aggressively to tell and re-tell consumers in their locale that their dealership sells new vehicles, pre-owned vehicles, service and parts to consumers. This is interesting when you consider that it’s common knowledge to all consumers that every dealership that has been appointed by a given manufacturer offers all of those sales categories without a single exception all across America.
In contrast, not all manufacturers and their dealers sell and service commercial trucks. Most commercial vehicles are sold through self-selected Ford, Chevrolet, GMC, Dodge, Nissan and Mercedes automobile dealerships. Nissan and Mercedes have sold commercial trucks for decades around the globe but are relative newcomers to the U.S. market. With no precedent to overcome, these two companies chose to limit the number of dealerships that can order and market commercial trucks to a select few.
Presumably, if the others had it all to do over again, they would probably have also adopted this “franchise-within-a-franchise” approach. Traditional and past policies make that difficult. Instead, Ford, GM and Chrysler have created optional commercial truck programs that certify select dealerships as specializing in B2B sales (Business Preferred Network, Business Elite, and Business Link). These programs typically provide things like floor plan assistance, and training and advertising co-op support that is not available to non-participating dealers.
The inconsistent behavior is, that most dealers do not miss a chance to promote their retail products and services to consumers in spite of shrinking margins and very high marketing costs. Conversely, they spend amazingly little to get the word out to local businesses that their dealership stocks, up-fits, sells, services and provides commercial financing for the kind of trucks they need to replace. Keep in mind, the margins are much higher and marketing costs are much lower. Some dealers don’t even exhaust the conservative advertising co-op dollars for which their manufacturers provide matching funds that are additionally offered and/or specifically earmarked for commercial trucks.
The Plot Thickens
It is even more lopsided than it first appears. Some of these manufacturers provide dealerships in a given market the opportunity to form an ad group to pool their resources. They agree to have the manufacturer add a line item to each vehicle invoice charging them the agreed upon fee. The fee could be hundreds or more than a thousand. The manufacturer collects the funds and deposits them into the treasury of the dealer ad group as requested. These funds are then spent to promote whatever the group agrees to advertise.
The advertising dollars collected from each commercial truck invoice never seem to make it back to advertising or otherwise promoting the sale of commercial trucks by the ad group. To be fair, the dealer can code the vehicle order as a “fleet” sale, or have it re-invoiced at the time of sale to remove the ad group charge if they so choose. The challenge is when the current retail incentives are more generous than the standard fleet incentive; dealers frequently code the sale as they would with a retail delivery. There is no malice intended toward the commercial truck departments by any of these parties and it may be too complex to merit changing the system: but it should be noted that when you follow this money, the commercial truck department effectively subsidizes retail vehicle marketing.
Commercial Department Managers Must Take Action
First of all, no one is out to undermine the Commercial Truck Department. However, since everyone else seems comfortable with these circumstances, it is up to the Commercial Manager to stand up and be counted. Often times, the Commercial Manager doesn’t ask for marketing funds and operates under the false belief that they would be turned down if they did. The fact is that dealership operators respond well when a legitimate, well-thought-out, business case is presented to them.
In a recent series of commercial truck gatherings, commercial salespeople and commercial department managers were asked to work in groups and brainstorm, how they would spend a fictitious marketing budget increase of $5,000 a month for a fictitious department. The results were underwhelming. After brainstorming together extensively, none of the groups, in any of the cities seemed to be able to think of ways to spend that much money. The number of line items they came up with was lackluster and overlooked a lot of low budget, high yield ideas. Most had not even exhausted the free things they could do to promote their department.
So we’re finding that not only do commercial managers not ask for funds, many do not know what to ask for or how to ask for it. Commercial Managers, even if they are a one-person-department, must learn more about marketing solutions available to them, and put together a well-thought-out business plan to present to the dealer principal and/or General Manager. The managers for new vehicles, used vehicles, parts, finance and service all have a seat at the dealer’s table. It is time for the commercial manager to invite themselves for a seat at the table as well. In this way, they can be a champion for their own department and help support the commercial department with marketing that is specifically designed to promote the commercial side of the business.
Fortunately, it costs comparatively little to do a good job marketing commercial trucks. Commercial Managers must start with no cost and low cost solutions, and then ask the dealer to provide funding for more costly initiatives. How to ask and what to ask for, and data to shore up a solid business case, may be a good theme for future articles. Stay tuned.
Good luck and good selling.