Marketing Today: The Dealers' View

Retailers Give Ad Age Their Thoughts on What Moves Cars off the Lot

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As consumers become more fuel-conscious and internet-savvy, dealers are changing their marketing to meet consumer needs. Advertising Age asked some dealers their views on marketing today.

Advertising Age: What do you think is the best kind of marketing to get cars moving off lots -- TV, newspaper, print, digital, e-mail, outdoor, events or something else?
We think the best media to get our message out is TV and the internet, which is rapidly replacing print media in our marketing mix as newspapers continue to diminish in importance. We're investing significantly more time and financial resources to expand the size and capacity of our internet departments to ensure we keep pace with our customers' buying preferences.
TV is still important for us, and digital marketing will become more important as we go down the road. Lead generators and e-mail correspondence from third parties such as and allow us to follow up with internet leads. The Chevrolet site with links to the dealers and our own website are great lead sources. Margins are down a little this year, but there's no question that the digital era is becoming more important to dealers. We e-blast regularly to our 20,000-plus customer e-mail list.
Independently, the dealership focuses primarily on grass-roots marketing geared toward supporting the local community and those that live and work within it. ... That means involvement in golf tournaments, public school functions, charity events and other community sponsorships throughout Avondale and the cities bordering it. We also sponsor local car clubs, softball teams, high-school-football programs. Recently we began a program for funding local high-school senior graduation activities to provide a safe atmosphere in which graduates can celebrate their accomplishments.
Marketing today is best focused on a dealer's current service and sales customer database. Additionally, a dealer should have a strong internet and e-mail marketing presence to reinforce that their dealership is the right place to buy a car. I've found that customers prefer to do business with companies they have done business with before, especially if that business demonstrates appreciation for the customer.

Ad Age: Are you in favor of incentives? Why or why not? What's working now?

Mr. Lowe: While all incentives help spur sales, we believe targeted incentives are the most effective because they help us move the needle in problem areas. All of the factories seem to have different ideas on how best to spend their resources, but we've found over our 50-plus years in business that dealer cash works better than customer cash in helping us move slow inventory.

Mr. Penske: There must be a catch to bring customers in on incentives. We tried gas cards and had little response. We perceive that customers do not understand how they work. And you can't just offer low interest rates. It needs something else attached to it -- like 0% with $500 cash back. Customers understand that.

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Mr. Allan: Factory incentives have certainly become the norm. Not that I'm in favor of them, but the perception of getting a little something special often will trigger the purchase decision. Certain vehicle segments respond to certain incentives, i.e., luxury cars are better with lease incentives, economy cars are better with low finance rates. I've found that no matter how low a vehicle MSRP is, the customer always seems to say, "And what are you going to do for me?"

Ad Age: A lot of the major automakers are talking about moving big chunks of their ad budgets to digital marketing. Do you think this is a good idea?

Mr. Lowe: Moving money to digital marketing is an effective strategy for the factory and the dealer, but ultimately it may be more valuable to the dealer. Most dealers are way behind the factory in embracing the internet and learning how to interact successfully with the customer in a digital world.

Mr. Penske: Our Chevrolet ad group and King of Prussia Auto Dealers Association are spending more and more dollars on digital without adding to budgets. ... The trend toward digital has been in the last six months to a year. We have not seen a major shift to events or outdoor. But the shift is out of newspapers and more to TV. Classified advertising is starting to slide, although we're doing local community-newspaper advertising.

Mr. Barnett: I do believe that manufacturers and stores alike are making a positive move when they reallocate advertising funds toward enhancing the customer's online-shopping experience. If we as automotive retailers fail to recognize the benefits internet marketing offers, we are eliminating a large audience we wish to view our message.

Mr. Allan: Digital marketing certainly is a requirement today -- and a good idea. And not that digital marketing is any more cost-effective when done aggressively. For the dealer, the true cost of internet leads and the specialized people to handle them often are not reflected in many dealer advertising budgets. Fewer people read a physical newspaper, but they still get the news bulletins, e-mail alerts and electronic versions of newspapers. Manufacturers who make digital marketing engaging and give a customer the information they want in enticing ways seem to succeed the most.

Ad Age: If you could change something about your marketing, what would it be?

Mr. Lowe: It's no secret that cutting through the clutter of today's marketplace, where customers are exposed to 3,000-plus messages per day demands agility. So at Anderson Automotive, we actually assess and adjust our marketing strategies and tactics on a monthly basis to ensure we keep pace with our customers and competitive environment. Every four weeks or so, our senior executive team meets with our general managers and our ad agency to evaluate our messaging, marketing mix and media buys and make whatever strategic and tactical changes are needed.

Ad Age: What kind of support do dealers or ad associations need from the factory when it comes to moving vehicles?

Mr. Penske: Our advertising association does local advertising, and Chevrolet does national to supplement dealer budgets. That's based on the number of cars shipped to various areas. Chevrolet has changed the way they run dealer ad associations. They may have a little less spend, per se. I don't know exactly what the manufacturers are doing. Our budgets are the same. We're fighting that battle the best we can.

Ad Age: How have you changed your marketing to reach more customers and be more cost-effective?

Mr. Barnett: Avondale Toyota Scion has recently focused a lot of energy into updating our website to try and create a more interactive and informative venue to showcase what our dealership has to offer. ... Dealers recognize the importance of the internet today.
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