I recently was working with a pretty sizable dealer group in the Northeast and we were examining the group’s advertising expenses and overall profitability. One area that jumped out dealt with digital marketing and lead generation. This particular group had lost focus on the importance of studying year-over-year costs and results as a measurement for spending money.

For example, this dealer group was spending between two and three times more than they did a year ago for digital marketing and yet their abandonment rate had doubled. Anyone could look at these numbers and easily understand that the approach wasn’t working; sadly, the numbers don’t lie. What was amazing to me is that, even though some of their managers had the data in front of them, they were so desperate to try to get more leads and sales that they just keep throwing money at a bad strategy.

Here’s a news flash: Numbers don’t lie, and sometimes you have to accept that a change is in order.

If you are spending more than ever before on digital marketing, and yet, have fewer website visitors and more people leaving your site, you are certainly doing something wrong. My advice to you is to figure out how to target your market and spend your dollars wisely. Here are a couple of suggestions supported by data that, again, doesn’t lie:
1. In 2017, NADA data found that 80 percent of the new car buyers had leased or financed with the dealership.

This tells us our customers are still payment buyers.

2. In 2017, NADA reported that 58 percent of our customers financed or leased with our captive lenders.

This tells us that our captives know their customers very well and there is an acceptance of their programs and marketing.

These are just two relevant data points to look at when trying to understand what’s going on with your digital marketing strategy. Let’s take this information and plug it into a strategy that’s both targeted and cost effective.

First, since we know 80 percent of our visitors are payment buyers, why are we only pushing price and rebates and not what the customer is looking for, which is a payment to see if they can afford the vehicle?  Do you want your customers going to their bank or some other lending source to try to figure out what the car will actually cost them on a monthly basis? Do you want more customers coming in with credit union checks to buy cars at triple net? I think not. I would start by giving your customers on your website what they want, which is what that vehicle will truly cost them.

Second, if you know that 58 percent of your customers are using the captive programs, why aren’t you tying your captive programs to your target customers? Here is what I mean: You can buy real customer lists based on credit score that you can tie back to your captive programs. For instance, let’s say I have an OEM program at .9 percent for customers with a 600 to 680 credit score. Why wouldn’t I target market to them in my area of responsibility instead of blasting shotgun marketing out to the world?

Websites and digital marketing initiatives, as you are aware, are broad-based marketing tools designed to create the “splatter effect,” hoping that five out of 100 stick — even though you have to pay to see the whole 100. I agree everyone needs to have a broad-based marketing approach that includes but is not limited to:
• Print advertising
• Radio
• Website
• Social media
• Email

Given you need such a broad-based approach, why would you double or triple your spend on your website when it’s not working? One thing I think creates the issue is the emergence of “Internet managers.” Even after 38 years in the business, I still don’t know what this is truly all about! In my world, these folks are sales managers, plain and simple, with different touch points to our customers. That’s all.

We should measure their results just as we do the sales managers who handle the showroom traffic. The difference today is that the showroom managers don’t fear that their position will go away or won’t be needed like the “internet managers” who will continually try to justify their position and spending your money even when the strategy doesn’t work.

Controlling expenses in order to thwart margin compression is a science that dealers need to study. Every month, review your total marketing spend by touch point and compare the results year over year. Don’t be afraid to throw out the strategies and bad spends in lieu of a more targeted approach.

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