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Jared Hamilton
From: Jared Hamilton
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Brian Bowman

Brian Bowman Chief Marketing Officer

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Few things in life bother me more than management teams of various companies conveniently blaming their shortcomings on the macroeconomic environment. Never mind that before the slow-down their company wasn’t in a much better situation.

When was the last time Chevrolet, Ford, or Chrysler produced the best-selling car in the country? Over the last ten years—besides the massive, gas-guzzling SUVs that lacked any significant innovation—what other claims to fame do these companies have?

Is it really that complicated to figure out that the market responds positively to cars like Accord, Camry and Prius? How many millions of these models do Toyota and Honda need to sell in order for the domestic manufacturers notice the trends?

Interestingly enough, I see similarities between the problems plaguing the domestic "big three" and a company in a very different industry, Yahoo. They all try to solve their problems through deal-making, rather than turning to innovation and a long-term, viable, differentiated strategy. Combining Chrysler and GM for the cash is a horrible premise and, for synergies associated with volume and size, is an even worse idea. You get to the right volume by introducing models that consumers want to own, not by combining models that should have been cut long ago and will continue to lose market share.

Here is a 5-point plan that I think will go a long way toward putting the American car makers back on the road:

  1. Own a product-line that’s made up of winners
    Car makers produce cars to make money, period. They should shut down all money-losing models, now. There should be no loyalty to any brand because one of the executives gets nostalgic when he rides in one. Kill the money-losers and cut enough elsewhere to become cash flow positive now—this quarter.
  2. Simplify your plan and, in the short-term, only commit to proven strategies
    Cut the consultants and simply listen to the market. Don’t get too fancy with your products for the short run (the next 2 to 3 years). You need to have your own Camry, Accord, and Prius.
  3. Communicate a killer strategy for the next 10 to 20 years
    As a nation, we like big ideas and big thinkers. Take a big bet and act like a visionary—become a visionary. For heaven’s sake, you guys have been in this industry for over 300 years combined. Where do you think the industry will go in the next 10 to 20 years? Solidify and communicate a differentiated, growth-oriented, and exciting strategy. Not only will your employees get fired up, but your customers will come along for the ride.
  4. Bring in new, driven, motivated leaders
    Bring a CEO from a distant industry and a distant geography. Let’s see, people in what state buy a lot of foreign cars? California? Great, bring a CEO from that state. Steve Jobs would be great. You need a visionary, not an operator. All of you have excellent operators.
  5. Deal with UAW
    The Union needs to wake up and understand that you can no longer be an employer that also produces cars but, rather, you are a car maker that employs qualified, professional, and hard-working people so you can make the cars and always earn a handsome profit. These employees should get paid a wage that represents their fair market value, and should be treated as your most valuable asset. You need to have the right to increase or decrease the size of your employee base as the market changes and opportunities arise or vanish. Any other type of relationship will not allow you to build a sustainable company for any of the parties involved.

To get the above done, you don’t need money from the government. In fact, I suggest that you stop wasting your time in Washington, and instead focus your efforts on fixing your own problems and cut enough to reach sustainability without counting on outside help. Own your problems and seek opportunities in the current market.

We have a nation of 300 million and a planet of over 6 billion screaming for cheaper, smaller, and more fuel-efficient cars. All car makers will be doing exactly that over the next 5 years. How will your approach be different than the simple, generic response we have come to expect form Detroit? Give it a try and surprise us with a response that does not further confirm the depressed nature of the industry but, rather, will uplift us by communicating your visionary strategy for the next decade or two and live up to your own, legendary past.

We’ll all be there to cheer for you and will drop our Toyotas and Hondas so we can once again own a symbol of American ingenuity.

My sincerest wishes for your success.

Payam Zamani, CEO, Reply.com & A founding father of the online automotive industry

Paul Rushing
Other Points to Add: A/B Testing - Both ad text and landing page Real Cost - Are you buying direct from source google,yahoo,msn,7search or are you being charged a markup on your spend. You should be able to make your spend directly with the advertising provider and pay for service only. Quality Score Reporting - Are you being smart priced due to low quality score and how quick can your vendor make adjustments. It is not just landing page equated into quality score Where are your ads appearing - Are you getargeting properly and taking advantage of low cost clicks on the content network(s). Keyword Research - Is your vendor finding and executing on cheap long tail clicks to bring your per click cost down while driving your traffic up
Mike DeCecco
Paul: Great additions! You're absolutely right about billing as well. Be sure you're looking at your invoices in detail and understanding exactly what you're paying for!... very important.
Mike DeCecco
Paul: If you're PPC campaigns are run properly, I have to agree and disagree. Yes, PPC is obviously more expensive than free SEO, however we see many, many dealers experiencing tremendous amounts of targeted leads at an extremely low cost. The national Average is less than $8. It's also important to point out again that a blend is very important. When Google visited us the last time in VT they explained that if you are listed in the paid section, the SEO section and the local business listings you have an 80% greater chance of getting the click. I'll point back to another post I made the other day that the immediacy delivering your message with PPC is important. If you're having a special sale, or you're offering a lower price than your competitor, adding it to your SEO will take ages to show up compared to PPC where you can execute your ideas in real time and measure their results.
Paul Rushing
I never said that PPC did not have it's place, I simply stated it was one of the more high cost ways to deliver traffic. I must ask that you quantify this though: "If you’re having a special sale, or you’re offering a lower price than your competitor, adding it to your SEO will take ages to show up" What do you mean by ages and what type of keywords would you target in that instance? Most money terms can be won quite easily and have almost instant SEO. Broad terms would be more difficult but then again broad match does not help identify customers further into the buying cycle and you better be using negative keywords or watch your quality score tank. I agree that a blend is needed but having multiple well optimized properties can crush your competition in the search results. Heat map studies have shown that having the #1 sponsored listing is equivalent of being below the fold in the natural results. 80% by being in all positions, paid,natural and local but #1 natural is going to get 70-75% on its own. How much is that additional margin of traffic really worth? With pay per click cost being dynamic to market area and terms purchased, using national averages can be misleading. Enough to make people drool in highly competitive markets and is not taking into account the cost of creatives, landing page design, site development and the necessary technologies to handle the lead. Those are all part of "lead cost". At the same time if you are having a tent event over a weekend it would make sense to run PPC in all competitive markets to try to siphon traffic for people searching for what you sell in those areas if you have the supporting assets in place. However if planned properly you can still get in those markets using SEO and probably get more traffic naturally for people further into the decision process. A great case study would be to find which which types of leads, natural vs seo, have a higher closing percentage. It may already be out there and I have not seen it yet. I know that longtail traffic when generating leads to sell is golden and converts well even if they have to be referred to another site for the conversion.
Paul Rushing
I forgot to add this. When google visited you to show you that paid search has it's place would you expect them to tell you any different? That is their revenue model they were there to help you market their advertising platform.

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