Find out how to improve the ROI with your marketing spend.
How Recalibrating Your Media Strategy Can Breathe New Life into Your Dealership
Sunday March 15, 2015
- Car buyers spend 75% of their car-shopping time online (12.5 hours). In that time, they’re searching for inventory, comparing vehicles, requesting quotes, reading reviews and seeking recommendations. Dealers have multiple opportunities to influence online shoppers up until the final point of purchase.
- According to the 2013 Marketing Budgets Report from Econsultancy/Responsys, only 50% of companies surveyed claim to have a good or very good understanding of ROI from digital channels. The report goes on to say that over two-thirds(70%) of companies surveyed derive up to 50% of their total revenues from digital marketing.
- Because the car-shopping process is so complex and involves so many resources—especially online resources—dealers should consider adding other sourcing tools. They will get a better picture of what’s influencing buyer decisions and in turn a much clearer idea of where they could be spending marketing dollars and how to apportion them for better ROI.
When was the last time you sold more cars after you ran a TV ad? Chances are you can’t remember because the bump was so insignificant. However, you probably remember how much you paid for that media time (Ouch!). You’re not alone: Research shows that dealers spend two-thirds of their advertising budgets on offline media.1
By contrast, the other 33% of most dealers’ advertising expenditures go to online media that has an overwhelming influence on where, how and what car shoppers buy. According to the 2015 Polk Automotive Buyer Influence Study:
- 76% of all car buyers used the Internet while shopping for a car.
- 37% cite the Internet as the most influential source that led them to the dealership – more than 20 times that of any other media source.
- Car buyers spend 75% of their car-shopping time online (12.5 hours).
But it’s what they’re doing during that 12.5 hours online that should make you sit up and take notice. They’re searching for inventory, comparing vehicles, requesting quotes, reading reviews and seeking recommendations. Aside from the actual test drive and final transaction at the dealership, most car shoppers are doing everything else related to their purchase while online. That means you have multiple opportunities to influence online shoppers up until the final point of purchase.
The Disconnect Between Shopper Behavior and Advertising Spend
Many dealers are failing to take full advantage of this seismic shift in the way consumers shop for cars. They’re having difficulty understanding the relative values of offline and online media often because they rely on CRM tools to inform their marketing budgets. As it turns out, CRM tools may be telling an incomplete story resulting in missed marketing opportunities.
That’s what third-party market research firm KS&R found in a study of 4,700 car buyers among 42 dealerships. Commissioned by Autotrader, this independent study, which didn’t use any personally identifiable information (PII), found significant discrepancies between dealers’ CRM records and car buyers’ actual shopping activities. It also revealed persistent patterns of insufficient data entry into CRM tools.
One of the most significant discrepancies is that car buyers are influenced 3.5 times more by the Internet than the CRM data from dealers in the survey indicated. The survey also found that car buyers cited third-party automotive sites 4.6 times more than dealer CRM data reflected, and most CRM systems allowed users to only enter one source, resulting in inaccurate, lopsided reporting. All three findings illustrate the limitations and underuse/misuse of many commonly used CRM tools and how they can lead to ill-advised advertising expenditures.
5 Steps to Improve CRM Processes
According to the 2013 Marketing Budgets Report from Econsultancy/Responsys, “Only 50% of companies surveyed claim to have a good or very good understanding of ROI from digital channels.” The report goes on to say that over two-thirds (70%) of companies surveyed derive up to 50% of their total revenues from digital marketing.
Most dealers want to see a direct path between media type, spend and ROI so they can allocate media expenditures accordingly. The CRM study shows that this is not so simple when there’s a distinct possibility the CRM input is flawed. The better way is to make operational adjustments to your CRM system, reassess your advertising allocations and do some testing. Here are some ideas to help you exploit the capabilities of your CRM tool to provide a more comprehensive view of customer behavior:
- Work with your vendor to develop a customizable lead source list ‒ It needs to be store-specific and an ongoing collaboration between your CRM administrator and sales/marketing managers.
- Train staff on CRM policies and processes ‒ Everyone who touches the CRM tool needs to have a clear understanding of how important this tool is to sales and revenues.
- Monitor and cleanse data ‒ Remember the adage “garbage in, garbage out.” Data quality is critical to ensuring that your CRM tools provide accurate information.
- Improve internal communication ‒ Ensure that staff and CRM users are kept up to date on changes to the CRM system.
Finally, because the car-shopping process is so complex and involves so many resources – especially online resources – consider adding other sourcing tools. You’ll get a better picture of what’s influencing buyer decisions, which will in turn give you a much clearer idea of where you need to be spending your marketing dollars and how to apportion them for better ROI.
To learn more about how to use your CRM tool more effectively, read The CRM Paradox: The Disconnect Between Shopper Behavior and CRM Data white paper.
1. 2014 NADA Data Report