Chris Martin, Senior Vice President, Business Development, Client Command
Conquesting new customers and inefficiency do not have to be synonymous. Rather than accepting inefficiency from vendors, dealers can significantly cut ad waste by rethinking and innovating how they conquest new customers.
Below are the four most common ways to market to new customers and how to spot inefficiencies with each one.
1) Mass Media Marketing. Mass media has the longest lifespan in automotive and is the most common approach to conquest marketing. It is a helpful way to gain brand awareness with shoppers, but if you’re not careful, it can quickly absorb a huge portion of your ad budget and become inefficient. The average cost per local airing in the U.S. is $5,000 – at that price point, and with no way to attribute sales to a specific mass media push, it can feel like you are throwing money down the drain. It has been fascinating to see how many dealerships have cut mass media to go 100% digital and seen huge growth.
There is often a balanced approach, but if you have a strong brand, it may be time to re-evaluate your need for mass media.
Also, consumers are spending less time shopping for a vehicle but the same amount of time online. What this means is, online experience makes up a larger percentage of their overall shopping journey, so it’s important to re-evaluate spend within your marketing mix to follow shoppers into the online/digital space and not necessarily buying local airtime.
2) Third-Party Websites. Third-party websites are usually where dealers turn when they are trying to increase the digital footprint of their conquest marketing mix. Many dealers use these sites effectively to attract eyes from people they’ve never worked with. They are a legitimate conquest strategy that can be used efficiently as long as you aren’t investing too heavily in third-party sites.
It’s a great safety net to ensure you are in the mix if a consumer ends up on one of these sites, but with only 10 percent of prospects submitting leads, you’re likely to spend money two to three times over on the same small pool of people. Similarly, it’s easy to overspend on the end of a buyer’s journey and miss an opportunity to get in front of new customers earlier in their shopping journey.
3) SEO/PPC. The other conquest marketing dealers turn to when they are investing in the digital space is SEO/PPC. Dealers invest a large portion of their ad dollars to drive shoppers to their website. Once there, they count on their website to drive consumers to submit leads through specials, pricing, customer service, etc.
In theory, this is a fantastic allocation of marketing funds. Who doesn’t want more website traffic? The inefficiency within SEO/PPC is not found in its concept, it’s found in its execution. The truth of the matter is, 37.9 percent of internet traffic is made by bots. Meaning, more than one-third of all internet traffic is not a real person surfing the web or engaging with your website. If you can’t identify the shopper on the other end of the computer, there’s no way to know if you are wasting money on fake conversions. You’re paying for clicks (averaging $1.43/click in 2019) every time. Unfortunately, this creates some inefficiencies in the SEO/PPC channel.
4) Predictive Analytics. Last, but certainly not least, is an approach gaining momentum with automotive vendors for conquest marketing, predictive analytics. Predictive analytics is a form of audience targeting utilizing historical data – often from a dealer’s database or purchased online behavior data – to predict future buying behavior. It’s a great way to guess at who is in market for a vehicle. Consumerism is cyclical, so learning from the past is a valuable strategy for dealers.
The inefficiency here is in the name, it’s built on predictions. Predictive analytics will never be 100 percent accurate because it is not leveraging real-time data or data that indicates real purchasing intent. This means your marketing spend will never be close to 100 percent efficient. It’s a good gauge of the market and can point you in the right direction – but putting a significant amount of your ad spend in an educated guess has inherent risks.
Now what?
We’ve discussed the four most common ways dealers attempt to target conquest shoppers and the inefficiency associated with each budget line item. Awareness is the first step to taking progressive steps towards innovation in your conquest strategy. Once you have a realistic view of your budget you can identify areas where you’re overspending when marketing to new customers.
About the Author
Chris Martin is SVP of Customer Development for Client Command, the industry leader in identifying the Active Shopper. He’s spent 15 years partnering with dealers to leverage marketing and technology that gains competitive advantage conquesting new and retaining existing customers.
