Your Marketing Budget: Less Can Be More Effective
Everybody knows the economy has seen better days. In times like these, we tighten our belts and try to make the most of our expenditures. Your marketing budget is one expenditure you can’t do without. However, you can do something about our increased need as a dealer manager to reduce the marketing budget during times like these.
The new length of the sales funnel gives us a good indication of where to put the majority of our marketing money. Ye old sales funnel was marked by well defined steps such as awareness, consideration, familiarity, etc. Each of these steps was fostered by separate advertising entities (TV, radio, newspaper-RIP). Today’s sales funnel incorporates the same steps, but the lines are blurred. Who do we have to blame for this expedited and inclusive funnel? The Internet. The Internet is able to foster each of these steps with increased efficiency and speed… not to mention the fact that some 90% of car buyers start their search online.
In other words, the best place for your marketing spending is online. It has the lowest cost of customer acquisition. Also look at online spend options as having different efficiencies as well. Example: your lowest cost/highest close rate lead is from the dealers’ own website. Make sure it is getting all the organic traffic possible and always be pushing for higher conversion (visitor/lead) ratios. Once you’ve covered your bases and made sure that all your online building blocks (text ads, banner ads, a good website, consumer generated content, video, etc.) are in place, use your surplus budget on specialized components like TV and radio commercials. Be sure to follow the rules of integrated marketing and send all traffic to the same location.
Dealers today are still looking at their marketing budget from the standpoint of first at their Events, Newspaper, Billboards, TV and Radio, then allocating what is left over to fund Internet. Today top performing dealers are looking at making sure the first set of marketing funds (if not all) are allocated to Internet channels, again ranked from most to least cost effective. Then after maxing that, they go to up to the more costly customer acquisition options like Print and do some Branding!
Simple really. You spend money being in front of the people that are raising their hands saying they are actively looking for your product or service (like buying text ads on Google), before putting a direct mail piece out to a zip code radius and hoping for a few people in the bunch to read your postcard.
To sum it up, save on your marketing budget and increase exposure at the same time.
November 4th, 2008 at 3:10 pm
Sounds like a good example of the Pareto principle aka the 80/20 rule. 80% of your customers come from 20% of your marketing budget and the other 20% of your customers come from the remaining 80% of your budget. Enjoying the blog, Dean. Will check back often.