With the slow Economy, sluggish car sales, gas prices going up and down, what is a dealer to do?

Do you need a hatchet or a scalpel to fix things? Will the market come around and if so, when?

Tough questions, tough times.

These times are when a dealer and their automotive marketing partner needs to get into the Waste Management business. No, not the Sopranos “dump the body” waste management, but identifying the waste in your advertising and making hard decisions.

We have recently begin re-coining ourselves as Automotive Waste Management specialists, and it is a big part of what we do (and we looove doing it)

It’s simple really-

We look at your budget for all of your advertising (nothing held back) including phone calls, emails, CRM, walk-in traffic logs.

We identify the cost per action (call, email, walk in, etc)

We turn everything into a formula that shows us the true cost of your automotive marketing budget.

Then, we back up the dumpster and dump in the all of the advertising that is costing you way too much money. It may feel at times like you are getting rid of some “old friends” and in many cases that is what happens. If the old friends are costing you $300 per call from that newspaper ad, or your radio spot on that expensive station is creating a cost per sale of $3000, then it’s time to say goodbye to old friends.Parting is such sweet sorrow.

You have to know what advertising is creating true and measurable action. You have no more choice to wait around watching your sales reps play solitaire because that direct mail piece will “hit any time now” even though you know it hit a few days ago. You need to know which online sources are the best and which are not, and you cannot depend on your "gut feeling" to tell you what is working.

Hold your agency, your media, even your message accountable for every single dollar and believe me you will see drastic reduction in budget and fast shifts to areas that are successful. Put a tracking number on everything and track all calls, emails, walkins. Be vigilant about it and accept no excuses from any staff member or agency (internet or traditional). Toll free numbers are cheap (purecalling.com offers single numbers or packages as low as $10) and tracking can begin nearly immediately. A few dollars for tracking numbers can save literally hundreds of thousands of dollars in waste.

If you do not start really analyzing your results, you can just fuggetabout it and continue to throw your automotive marketing budget right in the dumpster. Which would you rather have? All of your money in random unnacountable advertising, or your money in trackable results-driven marketing?

Two recent examples came from “domestic” dealers in the Northeast.

One of them spent nearly $1000 per phone call on a direct mail piece (no walkins were verified)

Another spent $800 per contact from their postyourvehiclesforsaleonourwebsite.com advertising.

One received a large amount of calls from a print campaign which was a “special buy” and it worked out to be around $30 per call. This we deemed as a “keeper” and recommended that the dealer try this again when the opportunity arose. However, at “regular price” this would ad would have worked out to be over $120 per call.

Another dealer was getting tremendous ROI with their email blasts, selling cars every month with no cost other than the time to create the offer.

The biggest kicker of them all, was the dealers websites, which were producing phone calls under $2.00 per call (yes, two American dollars) Weight the options then- free sales from email blasts and two dollar website leads, or one thousand dollar direct mail leads, two dollars leads, one thousand dollar leads…hmm not much of a choice there. Ooh I hear the truck backing up with the dumpster- what goes in first?

Of course closing ratios account for something and cheap leads are not always good, right? Again, track it all to a sale. A good CRM will allow you to know the exact cost per sale on all of your advertising.

We can do it wrong all day long; doing it right takes a little bit more work, but it is well worth it. Put on you Automotive Waste Management hat and let’s get started. If anyone needs a little help reviewing these various reports, leads, and analytics, just let us know (or any other qualified waste management specialist on this forum) and we can give you a report on your wasted budget.

Read more about recording your metrics here

This is the first of a series of posts about what to do, what to buy, how to prosper (as best we all can) in a slowing economy. Feel free to add comments and contribute any other ideas and strategies, so that we can all help each other in these tough times. Here are some thoughts in n particular order:

Buy more results-oriented and track able opportunities

• Internet Pay Per Click Advertising: Typically this is Google adwords but also includes Yahoo and MSN “paid” advertising. The reason why this is on the top of the list is because month after month our clients view their website results and state that the lowest “cost per opportunity” comes from the Internet. Plus, you pay per click. If they do not click you do not pay. Simple enough. With the right words, ad, and destination or landing page, this can add up quickly to a success story. Alternatively, if purchased the wrong way, this can end up eating up an incredible amount of budget very quickly. This is a very trackable expense. You set a budget and will know how many people saw your ad, clicked on it, visited your site, and took an action such as a phone call or email. Sometimes, you do have to sift through some deceiving reports on things such as “web events” and understand that a visit to a credit app does not mean that a credit app was filled out.

• Search Optimization Services: Again, back on the Internet focus, but there is a reason this will be a recurring theme. Most customers are online and if a good automotive search optimization expert can help you get top results online, they usually last a good amount of time. Over the long run, this will help your business even when you need to trim costs and cut expenses. If done right, it becomes the “gift that keeps on giving”. This is typically an ongoing effort but not one you can ignore since it takes time to build good results and they should be maintained once established. This can be a great return on investment.

• eMail blasts: These can be inexpensive ways to replace your expensive direct mail marketing. For under a nickel a piece, you can send out offers to people in your DMA that match your criteria including household income, demographics, age, sex, etc. Plus the turnaround time is quick and the results are trackable. Take the dollars spent divide by the clicks/visits/calls and there you have your cost per conversion. For the cost of a full or half page newspaper ad, just imagine how many people you could target that perfectly match your desired audience.

Buy less non-trackable “feel good” opportunities

• Advertising on specific media just because you listen/read/view them: OK, we all have certain patterns, habits, and tendencies to watch, view, listen to or read certain media. It is just human nature. However, just because you do it, that does not mean that everyone is just like you. There are still dealer principals out there that will buy a certain radio station because that is what they listen to on the way to work and they feel other people are just like them. It is human nature (take it from a psych major) to want to assume the world is filled with people that share your viewpoint. However, if you put some accountability in place to track the conversions, the truth comes out. It may make you “feel good” that you hear your spot every afternoon on the way home, but you may not be getting the best bang for your buck.
   
• Buying media just because you always have: This ties in with the previous idea of acting based on old habits. “I’ve been buying the “Big City Post” ever since my Dad taught me to sell cars.” Well, the Big City Post is down to 20,000 readers and you are paying out the wazoo to buy an ad still. In the words of Bob Newhart, STOP IT: http://www.youtube.com/watch?v=BYLMTvxOaeE Again, just because you always have and because the other dealer is buying it, doesn’t make it right.
   
• Buying opportunities because they are such a good “deal”. What is a good deal any more? With the bottom dropping out of the economy it is time to renegotiate all of your traditional advertising to start and your online as well. You may think they are a good deal, but if you track your calls or emails from each source and figure out a conversaion ratio, you will know which is the best and which needs to be cut. Sometimes you end up in a “contract” but even those can be renegotiated if you ask. Most media outlets are in the same situation so they are losing ad revenue and would rather get something than nothing…

Part 2 will focus on:

Get more Accountability in place

• Call tracking Services
• CRM and Lead Management
• Internet tracking

• New Vendors
• Existing media that you have or have not tried 

Testing, testing, testing: New Concepts, marketing ideas, and advertising:

• New Media ideas, concepts, and methods
• New Marketing ideas such as new strategies on this blog