Volume 5, issue 10

November 2007

Thought Experiment Part 3: No Advertising? No problem. 

In the past two months, we’ve been conducting a thought experiments in this space. The first asked the question, “Could you run a dealership without sales people?”  The second asked, “Could you run a dealership without a website?”  And this month, we’ll finish off this three-part series by exploring this question… 

Could you run a dealership without traditional advertising? 

I suppose the first thing we need to know in order to answer that question is what constitutes “traditional” advertising. For our purposes, we’ll consider radio, television, newspaper, direct mail and outdoor advertising as our “traditional” methods. According to a 2006 study by NADA, those traditional methods accounted for more than 90% of the average dealership’s marketing expenditures — amounting to more than $360,000 per year, or more than $450 per new vehicle sold. 

So what would you do if those methods for getting the word out were suddenly taken from you? Could you survive? What would you do with $360,000 to spend on non-traditional marketing methods? 

Well let’s look at what options you’d still have available to you. Obviously the internet offers a variety of possibilities. You’d probably want to invest in the most incredible, feature rich, user-friendly website out there. But websites are reactive tools… so you’d need to find ways of making prospective customers aware of it and driving them to it. So things like Search Engine Optimization and Search Engine Marketing come into play. You’d easily be able to dominate the major search engines like Google and Yahoo! and drive tons of ready-to-buy prospects to your site that way. You’d also want to look into localized banner advertising, e-newsletters and the potential to find new customers through tactics like blogging or podcasts. 

The bulk of your direct mail could be replaced with electronic communications. Doing this would both increase the effectiveness, through the addition of multimedia and customized content, and decrease the cost of direct-to-customer communication by eliminating printing and postage costs. This sort of “push marketing” is exactly what the Internet is best for.  

Another option you’d want to explore is marketing to customers and prospects via their mobile phones. Text messages are an especially great way to reach out to younger consumers. Making your inventory available via mobile phone and pushing out the latest models or one-of-a-kind used cars are all technically possible right now.  

These methods, in addition to the re-marketing opportunities available through national automotive and auction sites, make it possible to reach out to your customers in ways that are more personal and more targeted than a radio or newspaper ad will ever be. And if you do your research and work the right partners, the results can be just as dramatic while reducing your costs significantly. 

So, let’s look back at our core question… Could you run a dealership without traditional advertising? The short answer is that “Maybe.” Traditional methods are still the easiest way to reach out to thousands or millions of people at a time. But statistics say that 98% of those folks aren’t in the market for a new car or truck. So at best, you’re doing some mild brand building with that group.  

What this thought experiment shows us is that there are many non-traditional marketing opportunities of which most dealerships are failing to take advantage. Obviously it’s scary to switch up your strategy, but there’s good reason to do so. Television, radio and all the other mass marketing efforts are becoming less and less efficient with each passing year. And at the same time, more and more prospects are turning to the internet to find and buy their next car.

SiteCast Turns Webites Proactive

For more information on SiteCast’s proactive push technology, contact your Dealer Impact representative.

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