Dealers Taking Advantage of Vacated Broadcast Media Markets
As the calendar turns to March, good news seems to be abounding in the special finance world. E-mails and phone conversations with dealers and their managers indicate that business is indeed returning to that of the old days (late ‘90s) when SF was solid and deals were reasonable. Another good sign: the lion’s share of the messages in my inbox and voicemail are centering around marketing questions again rather than finance companies. With dealers wanting to know what is working or what is hot on the marketing front it means that they are once again engaged in SF and now are trying to figure out how to garner more than their fair share of the market.
I am excited to hear that what I will call “old-school media” is still working, and in some cases, working very well. It has been nearly two years since dealers aggressively went after the market in broadcast media. With the majority of discussion today being centered on digital and social media, traditional special finance advertising in broadcast media is certainly not new-wave.
How can it be that old-school could possibly be cost-effective in today’s market, and how are dealers implementing it? It’s not rocket science, and in candor, this run may not last forever, but it certainly is working right now. Marketing – advertising messages in particular – must stand out from the crowd to attract attention. They also need to help establish a brand, a familiarity of what you expect from the message, and broadcast media (especially television) is once again providing that opportunity. With the majority of dealers and departments pulling out of what was perceived to be expensive media, suddenly those dealers who remain own the attention. Combine that with a strong message and professional production and you can own your market.
Granted, many of the dealers I work with are generally on the larger end of the SF spectrum, but that doesn’t mean you have to spend tens of thousands of dollars nor have a store full of dedicated employees to make it work effectively. Today, there are some quality media companies that have excellent production and through the use of shared or licensed (but personalized) media, a dealer can be on the air in a matter of days, driving traffic as well as effectively branding themselves for basically no more than the cost of the airtime. Thirteen years ago when I was one of the pioneers for infomercials, the production and ramp-up cost was nearly $30,000. Dealers can do this for much less today.
These changes have allowed dealers to enter the market more feasibly, it has allowed them to also tie in the Internet to make their advertising more powerful. The most effective advertising takes customers back to a Web site for not only the credit application, but also for hundreds of inventory listings. This makes the Web site much stickier, keeping the customer engaged all the way through completing a credit application. Longer Web visits, completed credit applications and customers anticipating a call means higher appointment conversions—and ultimately more sales.
My definition of cost-effective and efficient retail automotive advertising is where media cost per sale is in line with industry benchmarks, and the total number of customer opportunities equals the maximum number of leads the sales team can properly handle. Any money spent to bring one more customer opportunity than that in is money wasted. The goal is to reach your maximum capacity at the lowest cost per sale. Remember, the average (not benchmark) full-time salesperson can handle 75 new opportunities per month. The great ones can handle about 125. Yes, there are dealerships that have people handling 150, 200, even 250 new leads per month, but they are simply picking the low-hanging fruit. Their closing ratios are generally well below average, and their follow-up for both prior sales and unsold leads from prior months is virtually non-existent.
The keys to effective use of broadcast media are no different than any other type of media. Always track your results and activity, don’t spend any more than you need to keep the employees that you have busy, and have all the other necessary components in place to take advantage of the opportunities.
What has convinced me that this is a good time to be in broadcast? Once again, it is simple. The data kept by the dealers I work with all indicate that both the cost per lead and (more importantly) the cost per sale are once again very much in line with current industry benchmarks. Without good tracking, you are using the SOP method (Seat-Of-the-Pants), which almost always results in a much higher than necessary cost per sale.
If the television market once again becomes over-saturated, then the results will certainly diminish. When I first entered the SF infomercial market, there was only one other dealer in the country engaged in it. My business life changed immediately and forever. My SF business more than quadrupled overnight. Yes, four years down the road everyone else had copied my lead, and it was much harder for my message to stand out from the crowd. Now, the economic crisis has driven all but the steadfast out of the SF business. For those daring to stand out from the crowd, as many I work with have chosen to do, the time is right once again.
If you have been out of the broadcast media market for a while and are in need of some direction, feel free to give me a call or drop me an e-mail at [email protected]. I will be happy to steer you to some of the media companies whose results are being proven to me every month by my clients, and you can analyze it yourself. For those who are ready to move forward and capture SF market share, it certainly can give you a way to get into the market quickly and cost-effectively.
Until next month,
Vol. 7, Issue 3