This is a follow-up article to one that I wrote last week.  I go deeper into why I think there is an epidemic in Dealers Marketing Allocation.  There are 4 marketing questions to ask yourself, I show how I would allocate a marketing budget for the average sized dealer, what we do at Woodworth Dodge for effective word of mouth advertising, how much our sales volume has increased over the last 5 years, and a breakdown of our customer acquisition costs.  

Marketing allocation is costing dealers an unnecessary amount of money, and in my opinion, even has a negative effect on company morale which I explain in the article.

There's a better way:

The Epidemic of Marketing Misallocation

Let’s have a look at a hypothetical yet realistic situation:

You’re a dealer and 85% of your advertising budget is geared towards attracting new clients, and 15% towards retaining your clientele. Yet your new clients make up 30% of your business.  So you're spending 85% of your budget on the 30% and only 15% on the 70%.  To top it off, of that 85%, you allocate 75% to traditional marketing and only 25% to digital marketing.

By the way, digital marketing is extremely affordable right now and it’s where the attention of your consumers is.  It’s only going to get more expensive as time goes on.  The automotive industry is known for being slow to change and digital marketing is case in point.

I can’t honestly say that this is how the majority of dealers operate, but I can say with confidence that there are dealers who are still investing in this ineffective approach to marketing.

Here are 4 Marketing Questions that you must ask yourself;

1. How much of your advertising budget is targeted towards drawing in new clients?
2. How much of your advertising budget is targeted towards retaining clients?
3. Which client is more financially valuable to the company?
4. Would you agree that you could lower your advertising budget and maintain your sales volume by targeting repeat/referral clients?

Traditionally, we focus our advertising on the price of our vehicles which influences buyers to think price first when they contact us.  Then, our Managers and Sales Trainers tell us to stay off the price as much as possible.  Not all dealers market this way anymore, but some do, and it’s part of the reason why we have a lack of trust between consumers and dealers.  Price still has to be a part of advertising but we must incorporate our unique value proposition.  Why should they choose you?

This is how I would allocate a marketing budget for the average dealership:

• 15% Traditional
• 35% Digital
• 50% Word of Mouth

Here are some things that we do for word of mouth marketing at our dealership:

- We have random giveaways to thank our previous clients for their business.  We'll announce it on a Tuesday and give it away on Friday.  It's important to know that we do not bribe our clients by saying "If you come in and buy and/or test drive, then we'll enter you in." It's only for those who have already bought from us, a genuine thank you.  Those are the only ones who are entered.

- We send a personalized gift to our client 30 days after they've purchased with a hand-written thank you card.  We note their hobbies and specialize a gift for them based on that information, our budget is $100 per deal.

- We give our Fixed Operations a weekly "allowance" where they can give away an oil change for example at their discretion.  The catch is they have to tell the client why they are getting a free oil change that day.  If we have a client who is always respectful, kind, and courteous, we have our Service Manager tell the client that when they come up to pay their bill, and at that point let them know that we have them covered for today. 

To me, marketing plays an underrated role when it comes to the morale of the dealership.  If you're focused on repeat/referral business, your morale will increase dramatically.  This becomes more challenging when you're focused heavily on attracting new clients.

Our customer acquisition cost for 2017 (total advertising dollars spent / total retail sold, new and used) was $247.  From 2013-2016 we grew our retail sales volume 61% and have since sustained that volume. It is my hope that this will help you invest your marketing dollars more effectively.

If you’re income is tied to the bottom line in any way, consider yourself a business owner or an entrepreneur. When you take this seriously, your perspective and performance improves drastically. 

Personal branding and development, marketing, reading on entrepreneurship and business, networking, and goal-setting all become priorities. 

Sunday’s are great for reflection and planning. I’ve found that short-term goals are more impactful than long-term goals because they allow you to stay hyper focused.

What are your goals for this week and for the month of June? You got this! 

Something to ponder….

You’re a dealer and 85% of your advertising budget is geared towards attracting new clients, and 15% towards retaining your clientele. Yet your new clients make up 30% of your business.  So you're spending 85% of your budget on the 30% and only 15% on the 70%.  To top it off, of that 85%, you allocate 85% of your budget to traditional marketing and 15% to digital marketing.

Confused yet?

I can’t honestly say that this is how the majority of dealers operate, but I can say with confidence that there are dealers who are still investing in this ineffective approach to marketing.

 

4 Marketing Questions that you must ask yourself;

1. How much of your advertising budget is targeted towards drawing in new clients?
2. How much of your advertising budget is targeted towards retaining clients?
3. Which client is more financially valuable to the company?
4. Would you agree that you could lower your advertising budget and maintain your sales volume by targeting repeat/referral clients?

Traditionally, we focus our advertising on the price of our vehicles which influences buyers to think price first when they contact us.  Then, our Managers and Sales Trainers tell us to stay off the price as much as possible.  Not all dealers market this way anymore, but some do, and it’s part of the reason why we have a lack of trust between consumers and dealers.  Price still has to be a part of advertising but we must incorporate our unique value proposition.  Why should they choose you?

I define contradictive marketing as misleading the public with your product or service for your personal gain.  It borders on false advertising and every dealer has been guilty of it at one point or another.  The majority of dealers still operate this way unfortunately, but there are a minority of dealers, including Woodworth Chrysler Dodge Jeep Ram Ltd., that have chosen to take an authentic approach to marketing, and it’s paying far higher dividends than contradictive marketing ever could.

See if your dealer is guilty of contradictive marketing and what you can do to get away from it.

Examples of contradictive marketing:

“Our prices won’t be beat!” – Yes they will

“We are the friendliest dealer in town!” – No you’re not

“We have excellent customer service!” – You have a 3 Star Rating

“Come in for a hassle free buying experience!” – You host a 3rd party private sale monthly

“All on-site vehicles only $77 per month!” – For the first 6 months only (slightly misleading)

“Your relationship is important to us!” – Sends automated emails, letters, and pop-up chat is a person that doesn’t work at the dealership

“Yes we have this advertised vehicle in stock” – No you don’t and you know it

It’s fair to say that some dealers may be oblivious to contradictive marketing as they truly believe they are the friendliest dealer in town.  But the ones who advertise that they have excellent customer service with a 3 star rating are intentionally misleading the potential consumer.

We get caught in this trap as dealers because we’re so focused on the next deal.  The more focused you are on the next customer, the easier it is to forget about taking care of the last one that bought from you.

For those who choose to be in this for the long-term, call it the “Infinite Game”, they understand that marketing the answers to the following questions is a more valuable marketing strategy.  One that is genuine and true to the dealership and its employees, which translates onto the client.  This generates more loyalty and higher repeat/referral business, the most valuable kind of business there is.

• What’s your unique value proposition?
• Why do you do what you do?
• Do you provide thank you prizes to your clients that bought recently or are you part of the majority where they attempt to bribe their next client through extravagant prizes (ex: if you buy now, then you’ll get this)?
• Does your entire team understand and know why you do what you do?
• Are the front-line people aligned with your vision?

If your team doesn’t understand the previous two questions or know the answers to them, then your clients can’t either, no matter how much money you waste on advertising.

I think you would agree that the consumer is far more educated today than they were even 5 years ago, as an industry, it’s time we become smarter with our marketing.

Dealerships can be systemized to the point that it reduces creativity, new ideas, potential, and growth.  This is particularly true in the sales process.  While structure is critical to success, there should be some level of leniency otherwise it becomes counter-productive.

Here are 3 reasons to give your Sales Consultant more independence;

Clients want less interruption during the process

I’ve sold and managed at a decent sized dealership where we sold 800 total retail units annually, and also at a dealership that’s half that size.  Being a part of both allowed me to see first-hand the pros and cons of having strict processes and more independence for the Sales Consultant.  From an Owners perspective, I prefer more independence for the team. 

We’re probably in agreeance that leadership will yield higher returns than micro-management.  If that’s true, then wouldn’t it make sense to give more freedom to your sales team to make decisions with effective guidance of course, versus doing the deciding for them? I’m assuming you hire from within for your Management team if that’s true, then wouldn’t it make sense to have your sales team grow and develop their management skills early with your leadership rather than putting them into the big office unprepared? And I think it’s fair to say that confidence leads to more sales.  If that’s true, wouldn’t your sales team feel more confident in making quick decisions with the client? And when the sales consultant is confident, the client becomes confident in them as well.

Setting up a culture like this requires trust, empathy, and leadership.  Take a step back and let your sales team take more control of the sale. Start slow if that’s what makes you feel most comfortable, but at the very least, start. 

Where could you delegate more during the sales process?

Ask your sales team what they feel could improve the process, implement and lead the way!

Encourages accountability and praise

People want to be held accountable so they can improve, or if they don’t, then you shouldn’t want them in your dealership. And there are multiple benefits to receiving praise.

It can be intimidating for the sales consultant to start making bigger decisions on behalf of the dealership. This is why it’s important to have leadership and a culture that allows for mistakes to happen and as long as the sales consultant is held accountable for the mistake and learns from it.  Allow them to share with you where things went wrong and why then walk them through what they did well and where they could improve.  From here, watch their development unfold and when it does, be sure to praise them.

There are multiple studies* that prove the positive impact praise and recognition has not only on the sales consultant but on the business as a whole.  When sales consultants are praised and recognized for their development, they become more productive, engaged, and more loyal.  For your business, this means you’ll have less turnover, achieve better results, and have a culture that encourages trust and communication.

It’s easy to think we’re doing enough in this category, but more often than not, we aren’t.  Don’t wait for a sales meeting to give praise and recognition to someone.  Do it the moment you find out or witness the event happen.  You know how good it feels to receive recognition for your efforts, it has a direct impact on your confidence, and confident people sell cars. So do that for your team!

Promotes respect for your management team

By letting them make more decisions, you’re giving them insight to what it’s like to make decisions at a management level which will lead to more respect from your sales team to the management team.  I’m not talking about the fake respect that tends to happen between an inferior and their superior, but a true, genuine respect because they are living it. They will have more appreciation for the pressure you face on the multiple decisions you have to make in a day.

The respect that’s developed, because it’s genuine, promotes a healthy culture which has a positive impact on the entire dealership.  This translates into more repeat and referral clientele which we all know is the most valuable kind.  It all starts by simply giving more control to your sales consultant over the deal.  And by leading more and micro-managing less.  Often times, it’s the seemingly subtle improvements you implement in the business that makes the biggest difference.

*https://www.trainingjournal.com/articles/feature/power-praise-and-recognition

The plan originally was to introduce this when my new book comes out in the coming weeks, but I thought I’d give you a brief on it early.

So what is synergized compounding?

Synergized Compounding is a collection of the long-term benefits you receive from contributing to your team’s success.

Here is a short summary of its 5 benefits;

1. Attracts More Clients for You and the Dealership

When you work well together in every department and avoid the impenetrable walls that seem to be put up at some dealers, you create a trusting culture that becomes noticeable to the public. Potential clients are more likely to buy and stay loyal to a dealership that provides a culture that’s genuinely built on trust, honesty, integrity, teamwork, and healthy relationships in the dealership. This is why it’s important to start your day at the dealership by staying connected to your teammates.

2. Improves Morale

It’s a gratifying feeling knowing your positive attitude has a direct impact on the morale of all those around you. There are multiple effective strategies that are mentioned throughout this book that will help you sustain a positive energy, but I want to talk about the benefits that giving has on you and your support team. 

The benefits of giving are well known and documented. Benefits include happiness, improved health, team camaraderie, gratitude, increased income, and reciprocation. Plus, it’s contagious. When you give without the expectation of receiving, it’s an empowering feeling.

3. Creates Synergy

When I think of synergy, I think of the 1980 United States Men’s Olympic Hockey Team. You may know them as “The Miracle on Ice.” Perhaps it’s because the US Networks are playing it on repeat since the US Team defeated our Canadian Women’s team during the 2018 Winter Olympics. Much like the Russians in the 1960’s and 70’s, our Canadian Woman’s Hockey Team has dominated over the years so naturally this was a historical moment in the US Team’s History.

But what was it about the 1980 Miracle on Ice team that made them special? If you remember the story, the average age was 21, and the team was comprised of rival schools. How is it that rivals can make up one of the greatest Olympic Teams in history? Because Herb Brooks wasn’t looking for the best players, he was looking for the right players. Players who had heart, work ethic, proper attitude, and a willingness to play for something greater than themselves. When a group of people come together for a greater cause than themselves, that’s synergy.

4. Generates a Higher Repeat/Referral Rate

There is no argument that the most valuable form of marketing is word of mouth. When you start to view your clients as walking billboards, your perception on how they are treated within every department completely changes. Building your own repeat and referral database requires time, but you can start working on it immediately. Acknowledging and helping clients in the waiting room for service and offering support and help to your teammates requires no experience, only effort. You do need patience to go along with this effort. But, over time, it will compound into business that will keep your sales funnel full at all-times.  Talk to any successful Sales Consultant, past or present, and they will tell you that life becomes far less stressful when you’re dealing with repeat and referral clients.

5. It’s a Win-Win-Win

Synergized Compounding is a win for you, win for your teammates, and a win for the client. It’s a win for you because you are receiving leads from your team on a regular basis. Their friends and family are likely to buy from the dealership they work at, so they’ll be referring them to someone. It’s your job as an entrepreneur to give yourself the best opportunity to attract those leads to your business. How many teammates do you have outside of the Sales Department? How close would you rate your relationship with them on a scale of 1-10?

“You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something – your gut, destiny, life, karma, whatever. Because believing that the dots will connect down the road will give you the confidence to follow your heart even when it leads you off the well worn path; and that will make all the difference.” - Steve Jobs

2003 - 2007:

Barely graduated from high school (52% on final exam)

Struggled to find my way Lived off soup crackers and tap water for weeks

Worked multiple jobs

2007 - 2013:

Accidentally stumbled into the auto industry on a gut instinct

Married my wife and had our first child

Sales Consultant to Sales Manager to General Manager

Lost 6 years of clientele info after being thrown under the bus by a trusted colleague

Left the GM dealership, went to a Chrysler one for a fresh start

Partnered with the dealership

2013 - 2018:

My wife and I had our second child

Grew the sales volume 61% at the dealership

Became majority shareholder then moved from Manitoba to BC

Started ReThink Selling

Wrote a book

Got BidzAuto going which will disrupt the auto industry 

We can all feel lost at times, especially during the difficult situations we find ourselves in from time to time.  Follow your instincts, trust yourself, know that everything happens for a reason, discover and go all-in on your strengths, and develop an unbreakable momentum. 

I put up an introductory video the other day where I shared that I truly enjoy sharing and learning from others.

With that said, here are my notes from the book “As a Man Thinketh” by James Allen. One of my favorite books of all-time. We don't have to limit ourselves to the automotive industry for training and development, we can use outside resources and based on experience, they can often be more useful than some of the traditional automotive sales training that's available today.

All my best, 

Brandin

I don't need a LinkedIn profile nor do I need to be active on it because I am not leaving my position and I own the dealership.  
 

This was my naive thought towards LinkedIn only a few short years ago.  This is because I didn't understand how to leverage it to my advantage and I underestimated its educational power.  Since coming to the realization that LinkedIn is far more than a resume platform, I've elevated my network far beyond a level I could have ever hoped for.  

Richard Branson is quoted as saying "succeeding in business is all about connections." This has proven true not only for my example but many others as well.  It's a platform where you have the opportunity to build your online reputation which is becoming more relevant and valuable as time goes on, it allows you to reach out and connect with thought leaders in your industry, and if you use it properly, allows you to create your own content based on past and current experiences.

When I first joined LinkedIn, I had no intentions of writing books, getting a startup going that will disrupt the automotive industry, or being a Sales Coach.  But you never know where life is going to take you and I'm thankful that I started the LinkedIn journey before pursuing these unexpected ventures because it has amplified the awareness for these companies as well as our dealership, Woodworth Chrysler Dodge Jeep Ram Ltd.  

Yakov Savitskiy is the thought leader for LinkedIn and provides invaluable content that is sure to improve your outlook on LinkedIn and its underrated ability to generate more sales no matter what your title is.

Almost anyone could be a Manager, but few are effective Leaders.  Often times, it’s one of the top performing Sales Consultants who gets promoted to Sales Manager.  They put their time in, usually 2 or 3 years (right when their repeat/referral business picks up), they show signs of responsibility, teamwork, discipline, strong work ethic, and other qualities you’d want in a Manager.  It’s not that this is the wrong move necessarily, it’s the lack of training prior to taking on the role of Manager that’s the problem.

Based on experience and conversations with other Sales Managers in the Automotive Industry, rarely is there a structure in place that provides an appropriate amount of training prior to taking on the position and the necessary ongoing training that must ensue in order to have your sales team reach their potential.  By putting a top-performing Sales Consultant into a Management role inadequately prepared, you’re sending someone to that office that isn’t yet qualified for the position. This negatively affects their performance for an undetermined amount of time, plus it slows down sales because you take your best performer off the floor.

Sure, the Sales Manager could effectively close deals, provide numbers, set targets with the team, follow up with the team to make sure they are doing their follow up calls, and have meetings, but that’s not leading, that’s managing.  And this is what I mean when I say anyone could be a Manager. Leading is different.  Leading requires sustaining motivation, providing a positive culture, developing intrinsic motivation, creating a purpose within your department and organization, and arguably most important, self-leadership.  If you can’t lead yourself, then you’re not in a position to lead others. 

If you’re in a Management position, it’s important to be aware of the amount of influence you have on your team.  For many of them, you are their mentor, someone they look up to.  Your actions play a role in their behavior and management style when it’s their turn. There isn’t a one and done course for leadership, it’s an everyday commitment.  If you’re a Sales Consultant waiting to get the nod to the big office but aren’t prepared or ready to make the commitment, then I’d encourage you to hold off until you are.  You’re not doing yourself or your team any favors by jumping into the role too early.  It’s difficult to find the time to learn and progress every day so you must make the time like you would if it was a doctor’s appointment.  Make the commitment or don’t.  Choose to lead more and manage less.

My 84-year-old grandfather who could still outwork me always says “there’s a right way and a wrong way to do things son, and there ain’t no in-between.”

I’ve written extensively and even dedicated an entire chapter to this in my new book where I lay out questions to ask before sitting in the big chair.  You can also check out my 5 Rules on Effective Leadership here as well. 

Make it a great day!

Brandin