It’s a formula known to be the the speed at which the sum of an object’s kinetic energy and its gravitational potential energy is equal to zero. It is the speed needed to “break free” from the gravitational attraction of a massive body, without further propulsion, i.e., without spending more fuel. (Wikipedia)
For your dealership – “escape velocity” it’s your sales and service market share growth “breaking free” from the massive marketing expense that produces insufficient results and low returns on your investment. Typically a dealership will hope to sell and service more cars to generate enough revenue to overcome the marketing expense’s gravitational pull on its campaign profitability.
The fundamental key to “escape velocity” in rocket science is the same as it is in your dealerships’ sales and service marketshare growth – efficiency – the ratio of result to energy expended. In dealership marketing parlance it’s the ratio of profit made to marketing dollars expended.
The internets search engines, Google, Bing, Yahoo, etcetera have done a wonderful job for dealerships (advertisers) in creating an efficient advertising ecosystem for sellers, buyers, and vendors. It has brought buyers and sellers together in a low-impact, high-result environment for both parties. It does it in a manner that television, radio, print, and direct mail combined can not do. For instance, try doing a google search for anything on your radio station. Try serving an “upgrade ad” on television to a specific customer who bought a car 4 years ago where you know for a fact that she’s seeing the ad with her specific make and model, and that she can’t fast forward or turn away. All very unlikely things that can be done outside of the internet.
When you look at the marketing tactics in your stack – be they television, print, radio, PPC, re-targeting, email, direct mail, look closely – very closely at their real ROI if you hope to leverage the efficiency to “escape velocity” and thereby retain and gain more marketshare for your dealership.
Let’s look at direct mail for example. Overall it’s the medium that has the least efficient ratio of profit made to dollars expended. Consumers spend less then 4% of their attention on direct mail, even less when it’s non-relevant or ill timed. Adding more gravitational pull on it’s inefficiency, direct mail has one of the lowest message and brand recall rates. More dealers today are using the internet to proactively and unobtrusively target their customers in the efficient and effective medium of the internet. And many are doing so with significantly less dollars and higher returns on profitability.
Why is that you ask? Isn’t it the same target, the same customer with the same purchase or service needs. Yes, it is but it’s where and how you deliver your message that impacts its consumption and action. Your customers are online (their laptops, tablets, and their smartphones) 48% of the time compared to just 4% in print. You don’t need to be a rocket scientist to know that if you want to reach escape velocity with your dealership brand and marketshare you should direct more of your budget on the internet.
To be sure, there is a need in the automotive market for direct mail – particularly around time sensitive, very “low funnel” opportunities. For example recalls, CSI/SSI communications, some lease expirations notices, and important holiday offers or OEM “thrust months incentives.” Again there’s a need, but a very small one. Certainly not one that warrants sending thousands of pieces of mail on a targeted campaign when you can achieve the same if not more profitability leveraging the internet and spending half the cost. A proactive online targeting strategy leveraging the internet is efficient, one that gets you more profitably toward escape velocity.
If this post makes sense to you and you want to have a real world discussion about how your dealership can begin to more efficiently market to your customers online shoot us an email or give us a call and we’ll walk you through it. You can reach me directly at ronmorrison@pureinfluencer.net or give me a call directly at (408) 218-6407. You can also visit us and learn more at www.pureinfluencer.com.