One thousand pounds – it is twice the amount in our earlier ‘Boost your business’ feature, but is still not a lot of money in business investment terms, right?
You could use that money to fund a couple of months of marketing agency assistance. One marketing company we spoke to said it couldn’t be done, and that although £1,000 would pay for a solitary campaign, you would need to spend £5,000-£6,000 to see a sensible return.
However, Lee Waterhouse, of marketing agency WDA Automotive, said the smallest dealers could, in fact, kick-start their digital marketing with about £300 a month.
“For clients on a budget, we deliver digital marketing packages,” he said.
“If somebody wants to get their digital marketing off the ground, we’ll do packages that basically consist of content marketing, email marketing, social media management and analytics. That’s something we offer on a yearly contract, and it ranges from about £299+VAT per month to £1,250+VAT per month.”
However, according to Waterhouse, the first step in marketing is even cheaper than that. Before jumping into spending on a campaign, he said dealers should try to differentiate themselves from their rivals in an attempt to prevent forecourt price wars and to reduce their need for a large marketing budget.
“If dealers aren’t differentiated, then the difference for the consumer comes down normally to availability and price,” he said.
“Unless they’ve got a really exclusive manufacturer deal for some kind of high-end or niche brand or they’ve got fairly irresistible finance packages, then they just become perceived as a commodity.
“I think if you’re going to try and connect with customers and you’re effectively saying the same as the next guy, then it just comes down to who can shout the loudest, and that normally translates to whoever’s got the deepest pockets.”
Once you have figured out what makes your dealership stand apart, the agency can swing into action with its digital marketing packages, which are designed specifically for the smaller players.
“It’s for people who know little or nothing about digital marketing,” he said. “It just gives you everything you need and nothing you don’t, so it’s not a massively intensive delivery, but you can start to see traffic increasing to your website, conversions increasing through the site, sales and so on.”
ContractHireAndLeasing.com’s sales manager, Mike Best, warns that simply throwing money at marketing or advertising is not the key to maximising your return on investment.
“Sometimes, if the car isn’t popular, it’s less beneficial purely advertising an offer,” he said. “That’s an easy way to burn through money. The best way for you to get return on investment is to concentrate on what you’re good at and focus on your best-sellers.”
But Best argues that simply getting your cars in front of customers is not enough. You have to price them correctly, and even after you’ve drawn customers in with a good car at a good price, your work isn’t done yet.
“You also need to focus on enquiry management. To convert enquiries into sales, you need to make sure you get in touch with leads quickly and provide good customer service.”
The partners who perform most effectively, says Best, can roughly double the site’s average conversion rate of 36%.
Mike Dolloz, the chief executive of automotive training company Performance in People, agreed. He believes that although bringing in the leads is useful, you need to have staff capable of converting them if you want to make money.
Take staff evaluation up a level
“The impact of great performance on sales conversion is unbelievable,” said Dolloz.
“If you take the automotive industry and look at the figures, car manufacturers will spend millions of pounds a year driving marketing, driving footfall into the dealerships. But frankly, if you’ve got poor dealership staff, you can actually find that your sales conversion rate will fall through the floor. So all that money that’s been spent on marketing is essentially going to waste.”
Performance in People employs a “coaching” approach, so that keeping staff well trained is as cost-effective as possible for dealerships.
“With us, dealerships will spend around £1,000 a year, and we think that’s a sort of critical level where we feel that people are investing
sufficiently to get evaluation back on the performance of their dealerships,” said Dolloz.
“For that, a dealer would typically get quarterly mystery shopping, some customer satisfaction research and maybe some coaching activity, so we would nominate somebody within that dealership who would take responsibility for coaching and developing their people, we would develop the skills to do that and we would give them the support tools, such as mystery shopping.”
It may seem a little odd that Performance in People recommends an annual dealership spend, especially when some providers will simply offer a one-shot course, but that’s because Dolloz believes training should be a continuous project.
“Training should be continuous for two reasons,” he said.
“The first is that your standards might have changed. In reality, automotive retailing today is an entirely different animal to what it was, say, pre-2008. There are different expectations – certainly consumers have higher expectations. One of the key challenges we’re seeing is that consumers are incredibly demanding. Therefore, you’re having to continuously review what kind of level of service you want to deliver.
“The second is that training is temporary. It will gradually ebb away, and those bad habits that have been adopted get pulled into the way they are delivering service to customers.
“It’s very important to keep the skills alive, and you can do that through renewed training, but we find actually the coaching method embraces that much more. Train people with the skills and make them aware of what the expectations are, but coaching continuously through the dealership will keep those skills alive. Services like mystery shopping help keep that alive.”
Jane White, director and consultant at WhiteTEC UK, said a £1,000 investment in staff training could do an awful lot of good, delivering “deep dive” insight into the approach to lead conversion.
WhiteTEC specialises in staff training and development and counts Evans Halshaw, Marshall and Vospers among its clients.
However, White added: “You have to be confident that your staff want to learn.”
Run a sales event
White also said independent retailers of scale could take advantage of a targeted sales event for about £1,000.
A focused used car sales event from WhiteTEC claims a 50% conversion rate of phone calls into showroom visits, with a 90% attendance rate and 50% of those converted into sales “with the right staff and selling process”.
Events are primed by direct mail shots to 1,500 dealership customers, which leads to incoming calls on the day of a sales event.
One member of WhiteTEC staff is on hand to coach sales staff and lead the calls during the one-day sales event, White said.
She added: “Much of our work is with franchised retailers, but unlike many events companies with set rates of £5,000 upwards, we can tailor our offering to the client.
“The sales we provide from our events aim to provide the lowest possible cost of sale.”
Utilise classified sites’ data services
Although Auto Trader is best known for its classified adverts, brand director Chris Penny says it is its data services, such as stock acquisition assistance, that really help dealers.
“There were six billion minutes spent browsing Auto Trader last year, and we stored every single minute of behavioural time spent browsing our site, so we know what vehicles people interact with and how those vehicles move through the website,” he said.
“Any customer can join Auto Trader today with our smart buyer package and you’ve got access to a huge amount of stock, but then we layer our unique data, and we can steer dealers towards the stock that we believe will perform best on their forecourt.
“A blue Ford Focus Zetec might take 20 days to sell in Birmingham, but could take 150 days to sell in Newcastle, so it’s the perfect car for a dealer in West Bromwich, but not so good for a car dealer in Gateshead. The cornerstone to being successful is having the best possible selection of vehicles for your local market.”
But there’s more to it than that, according to BCA’s Stuart Pearson. Once you’ve got the right stock, he says, you have to present it in the right way. It’s no good picking up a great car at a bargain price if you leave crisp wrappers and mud all over the carpets.
Preparing a vehicle needn’t be expensive. Taking a car to the disused petrol station around the corner for a wash is dirt cheap, and although costs vary, even professional vehicle preparation services such as those operated by BCA are going to be well within your budget.
And according to Pearson, a little preparation work is going to go a long way, reducing the amount of time it takes to sell the vehicle, as well as making sure you get top dollar when it does leave your care.
“Vehicles looking their best attract more buyer interest, which leads to more first-time conversions and higher bids,” he said. “Buyers have plenty of choices and will gravitate towards the better cars, and they will almost certainly become more ‘picky’. Cars that require refurbishment may well be passed over, so it’s important to invest in vehicle preparation - especially in the lower grades, where it will improve their appeal.”
Get ready for EVs
With just £1,000 to spend, any independent retailer will be able to take a giant step towards future-proofing their dealership.
At the AM Digitech conference earlier this year, Tom Callow, Chargemaster’s director of communication and strategy, said a growing number of independents were specialising in electric vehicles in an attempt to claim a large slice of what remains a niche.
He cited JD Cleve, Grimsby; Drive Green, Bristol; and EV Expert, Guildford, among a list of emerging specialists and said demand for alternative fuel vehicles (AFVs) was heading in only one direction.
Chargemaster estimates that the number of EVs on UK roads will reach a million by the end of 2022.
Tim Blight, owner of Blights Motors, an independent retailer in Bideford, Devon, told ID it was possible to embrace the EV revolution on a budget of less than £1,000.
Blight Motors put its technicians through the RMI’s hybrid/electric vehicle repair course (RMI members: £600 + VAT, non-members: £750 + VAT) and teamed up with EV chargepoint provider InstaVolt to install a chargepoint which sees the dealership draw ground rent from the provider, which then makes money from customers charging.
Blight said: “The relationship with InstaVolt sees us rent the space to them, with no outlay from us at all.
“At the same point, we trained the technicians and I’ve made a concerted effort to stock a plug-in vehicle at all times.”
Blight said his EV sales have proved swift, with most customers travelling to source their chosen AFV and arriving at the business with all their research done – meaning they are ready to buy.
He said: “EVs are the future and you can prepare for that on a budget. If I could have more chargepoints with InstaVolt I would, we just don’t have the space.” JAMES FOSSDYKE