Part III: The Naked Truth Exposed [Online Buying]

Online Buying...Should We Do It?

by the AutoHook Marketing Team

This particular blog will cover arguably the most controversial topic inundating dealer forums like DealerRefresh and other automotive digital communities. This is the question of the moment, and perhaps the largest generator of both debate and uncertainty creeping up our industry’s horizon.

After AutoHook’s nation-wide survey conducted over the last three months, the top five digital marketing topics dealers currently struggle with were exposed:

1. [Social]: Does Social sell cars?
2. [Video]: Video, video, video…tell me more.
3. [Paid Search, Retargeting & Budgeting]: What should we expect?
4. [Online Buying]: Should we do it?
5. [Data & Marketing Attribution]: Who has it and how do we get it?

The first three topics are covered in parts I & II of The Naked Truth Exposed Series. Check them out below:

• Part I: Social & Video Marketing
• Part II: Paid Search, Retargeting, & Budget Allocation

THE QUESTION OF THE MOMENT: Should I make my vehicles available to buy directly on my website? Is it necessary if I already have a successful brick and mortar store?

So, what did AutoHook’s Naked Truth defenders have to say about online buying at Digital Dealer 21? First, let’s reintroduce our expert panelists and reveal what they shared on this undecided topic.

Alex Jefferson (eCommerce Director, Proctor Dealerships)

“Where online buying is going I don’t necessarily know, but I do know that it did personally have an adverse effect on us when we integrated with the tool.”

The challenge with online buying is there are two very different perspectives on the topic: the consumer’s perspective, and the dealer’s perspective. Proctor Dealerships recently tested an integrated online buying model on their websites over a one-year time period. The tool gave customers the ability to formulate payments, value their trade-in, and complete most of the purchase process online - the overall goal, of course being to save the time consumers spend physically at the dealership. However, what Alex and his team found is that “people are lazy.” They don’t want to take the time (even in the comfort of their home) to navigate through this integrated, lengthy form.

Alex’s advice? What works best for his stores is integrating separate “get your price” buttons, trade-in tools, and finance or credit apps on their sites. It’s three separate forms, but they are quick and easy to fill out. This process also works better for non-tech-savvy customers, and it has been highly effective for Proctor stores specifically. A single buy online method may be too long and too time-consuming for a lot of people, and it can also negatively affect your conversion rates. As a rule of thumb, it's always best to keep online forms as short and straightforward as possible. The easier it is to complete, the higher your conversion rates will be. Alex tells our Naked Truth audience:

“I will tell you after a year of testing it, our lead volume went down by about 30-40%.”

On the contrary, DD21 interview between Chief Editor of DealerRefresh, Jeff Kershner, and CEO of Drive Motors, Aaron Krane disclosed opposing evidence.

DealerRefresh: What is the feedback like from dealership personnel at dealerships offering consumers this option?

Aaron Krane: Dealership staff love that customers who use online checkout will not only sell themselves but also upsell themselves, while the store is closed. That means orders through Drive Motors convert to a sale at over 10-times the rate of leads, and have a higher PVR than many stores’ averages. Moreover, in the words of one dealership, online checkout customers are “ecstatic.”

Kelly McNearney (Senior Automotive Retail Strategist, Google)

 “All I care about is online video.” 

Kelly allowed fellow panelists, Scott Empringham and Alex Jefferson to answer the bulk of this question. However, she made sure to emphasize the role video plays when it comes to showcasing your inventory digitally, as it can nurture the online buying process.

If (or when) buying online becomes mainstream, inventory-specific video will undoubtedly play a role in increasing “buy it now” conversion. Why? Because if customers can virtually touch, feel, see, experience, learn about, and test drive the vehicle in consideration, it’s possible they’ll obtain enough information on its specs and benefits to click that change-driving “buy it now” button.

During her 2-Minute Interview, live at #DD21 with Flash Point’s Scott Empringham, Kelly McNearney shared Google’s #1 tip to help dealers sell more cars, trucks, and SUVs right now. “If I was opening up a dealership today, the first thing I would do is start making YouTube videos, walkarounds, test drives, and features to show people the inventory on my lot.”

Customers aren’t visiting as many dealers as they used to. Google shows consumers visit 1-2 stores before making a purchase. People know what they want before walking into a dealership. New, inventory-focused video merchandising technologies will only further support that fact.

“People want to make decisions at home, on the couch.”

…And Kelly's right! When you think about it, people don’t want to feel pressure from a salesperson to make any life-altering decisions on the spot. A vehicle purchase is the second largest purchase consumers make after buying a home. There is a lot of emotion, stress, time, money, and energy that goes into their decision that dealers don’t always recognize or acknowledge.   

Scott Empringham (CEO/President, Flash Point Communications)

“I don’t think it’s a question of is it going to happen, it is happening. If you’ve got your fundamentals down, and that’s something you want to experiment with, I say go for it!”

Scott does caution if you haven’t first mastered the fundamentals (things like digital merchandising, relevant photos and videos, a high converting site, simple, high converting forms, etc.) jumping into online buying can be a waste.

Asbury Automotive Group for example, rolled out online buying across their stores, and other large progressive groups like AutoNation and Penske have done the same. Asbury is a Flash Point client with a huge digital marketing team, and they successfully participate in an online buying model today. However, the vast majority of Flash Point customers don’t necessarily have the resources Asbury and similar groups have to make this system work.

Brands like Honda, Toyota, Ford, Chevy – those are value-buy vehicles. People want and need to physically sit in the car to determine if it’s right for them. On the contrary, when it comes to aspirational brands like Maserati or Lamborghini, or someone who collects cars as a hobby, people would be more likely to buy these types of cars online. Obviously, Tesla has been doing it successfully for years.

At this time, the best answer experts can provide, when it comes to whether or not dealers need a buy it now button is…it depends. There are stores that have been successful with it, and there are stores that have not been successful with it. The key is to have your ducks in a row (or in other words, a website that converts at a high rate) before rolling out a nation-wide online buying program.

Bill Playford, VP & Partner of DealerKnows Consulting called out the topic in his June 2016 DealerRefresh article, Buy it NOW! The Button that Drives Change.

“I know this is giving some of you heart palpitations, but it’s once again that time to rethink the way we approach our customers. Not everyone will want to utilize a Buy It Now button. But, by not incorporating it into your process, you are disenfranchising a segment of your population who would click this and purchase almost 100% online.”

The key consideration with online buying, and with your dealer operations in general, is going above and beyond to make things convenient for your customers. Make your end model fast and easy. If you can manage one platform great! If not, do everything you can to make your process smoother on the customer's behalf. Build a loyal customer base now, because you never know - they could be buying their future car from you, right off your website.

A huge thank you goes out to DealerRefresh & Flash Point for capturing all the Naked Truth magic live on Facebook. Click here to watch the recording!

For additional resources or information from our panelists, visit DriveAutoHook.com/NakedTruth.

3 Ways to Avoid Mobile Marketing Mayhem

By David Metter

The accelerating rate of mobile usage is not a trend. It’s certainly not going out of style. Mobile best practices need to be hard coded in the DNA of every brand, dealer, and marketer – guiding your digital strategy from this very micro-moment on. No longer is mobile marketing a segment or part of your approach, but rather it should dominate your approach, and that’s huge.

We’ve been watching consumer behavior in the retail segment for years. The Automotive industry is following in the tracks of larger retailers like Target, Home Depot, and of course, Amazon. This mobile-driven shopping behavior is rapidly translating from buying a T.V. at Best Buy to purchasing a vehicle at a dealership. “Showrooming,” or shopping on other dealer’s sites on a mobile device while physically at a dealership is an increasing problem that needs to be handled proactively. If consumers are going to compare prices on their smartphones for a $20 item or an $800 item, the probability is even stronger that they’ll do the same for a $40,000-$50,000 item while on a dealer’s lot.

We’ve been in the space long enough to know that with all up-and-coming technologies come growing pains. The following are the top three ways to own mobile and avoid the problems that other marketers have faced.

1. Ensure You Have Access to Accurate, Real-Time Attribution Reporting: According to AdRoll’s State of the Industry, 41% of U.S. marketers said the lack of attribution transparency was one of the biggest, if not the biggest challenge of mobile advertising today. The ultimate goal for dealers and OEMs is to choose a vendor that has the ability to attribute every sale and every showroom visit to a single campaign at nearly 100% effectiveness, regardless of the device or media channel that led them to you.

Leverage technology that knows the exact coordinates of every franchise dealership in the country, so you can pinpoint the exact location of a customer at a nearby competitor. You can then target with highly specific and dynamic messaging, giving you the control to conquest other brands and more importantly, protect your own backyard. Dealers cannot possibly do this by themselves. Unite technology with intelligent data that executes well and has the attribution reporting to prove it.

2. Eliminate Extra Steps: Digital marketing can get complicated when you break down all the moving pieces that make up a comprehensive, synergetic strategy. With mobile, it’s actually quite simple. Think of a single goal your mobile campaign must accomplish. For most, it should be to get a buyer into your showroom. Then, map out the easiest, most straightforward route to get there. The less pages, forms, and steps your audience has to navigate through, the higher the chances of conversion.

According to eMarketer, over one-third of advertisers say users or consumers not converting on mobile is yet another challenge. Friction is the enemy here. If a customer gets “stuck” either waiting for a page to load or navigating through irrelevant content they will move on faster than you can say Ferrari. Always put both speed and simplicity into play when it comes to increasing conversion rates on mobile. Focus on one goal, one call to action, and one destination – your dealership.

3. Zero-In on Buyers: Through location and behavioral targeting, we can build a consumer profile that offers great insight into who is in-market and ready to make a purchase, and who is still in the research phase of buying a car. 90% of consumers leave their location services enabled. Google advises marketers to take advantage of these built-in GPS systems. In addition, “61% of smartphone users are more likely to buy from mobile sites and apps that customize information to their location.”

At the end of the day, great marketing is really about one thing; and that’s relating to people. With all the information, analytics and tools available to us, we’ve perhaps created an overly complicated, multi-faceted, omnichannel approach of simply trying to relate to people. The evolution of mobile is much more simplistic than that. It’s just about connecting with people on another level (that happens to be in their pocket, purse, or in their hands roughly 99% of the time).

Mobile usage rates have already exceeded desktop. Try not to blink, because before you know it, over 90% of showroom traffic will be attributable to a mobile device. So rather than being reactive, you better be there, and be ready.

Click here to read the new Mobile eBook, Auto Dealers and the State of Mobile Marketing 2016.

Do More Firefighters At A Fire Cause More Fire Damage? Rethinking Attribution

When thinking about attribution, it would make everyone’s lives much simpler if there was a straight line between marketing, conversion and a sale. As car buyers increasingly visit more touchpoints in their car shopping journey, attribution becomes more challenging. 

There was an interesting analogy in a recent article on Business 2 Community that I felt nailed the challenges we face - and errors we make - when attributing a sale to a particular source. The article shared that data has proven the more firefighter at a fire, the more damage the fire caused. It was hypothesized to reduce fire damage the answer was to send fewer firefighters to fires. Of course, we all know that would probably not solve the problem, or reduce fire damage. After a deeper analysis factoring in other variables, it was found that the presence of more firefighter at fires was not, in fact, what increased fire damage. The reason more fire damage happens is because more firefighters are present at larger fires. 

While reviewing month-end expense reports to determine whether a vendor’s service is producing sales, do you simply measure cost versus revenue? Too many dealers make this mistake. All dealers - whether they realize it or not - have multi-channel marketing strategies. Some more than others. But, the simple fact is that every dealership has varying combinations of marketing channels that include print, radio, TV, online, social media, and more. How many messages from these channels did it take to compel that lead to respond, or that customer to walk through your door? It could have been one, or it could have been many. I’m sure you do your best to source customers. However, simply attributing a sale from an online inventory service based on a call-tracking number might steer you to some erroneous conclusions. 

In all probability, that lead, conversion or walk-in customer was influenced in some way by one or more of your marketing channels.  The customer may not remember which touchpoints they visited that lead them into your dealership. However, even asking them will typically give you more insight as to what was their primary influence. 

I’d bet that your customer’s journey looked something like this: They passed your billboard every day on their way to work. While scrolling through Facebook, they saw your targeted ads. Perhaps a neighbor brought home a new car, and they saw your license plate frame or sticker on the back. Watching TV late at night, they viewed one of your TV ads.  They conducted some online research about a specific vehicle and viewed one of your listings. They visited your website and browsed your inventory, then left to read some online reviews about your dealership. Maybe they even posted on Facebook; asking friends, family and associates for advice on the vehicle they’ve chosen and any opinions about your dealership. They decided to give you a shot and made plans to come to your store that weekend. And then they show up. Where do you attribute the sale? Which marketing channel gets credit?

The reality is that all of your marketing channels are working together to drive business to your dealership. So, consider digging a little deeper when analyzing attribution and judging any particular service’s performance.  Save yourself from making a mistake that could do more harm than good and drive in more sales and profitability into the bargain.