Digital and Social Media for Car Dealers Part 2: Digital Strategy

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This article is the second in a series on the use of digital and social media for automotive retail managers in an increasingly dynamic world.

 

Digital marketing and social media has re-drawn the car buyer’s route to purchase. Don’t take my word for it. For the last decade consultancies, such as Cap Gemini, Ernst and Young, PWC and Boston Consulting Group, have been giving car retailers and car makers the same free advice: digital has re-drawn the car buyer’s route to the purchase. Most in the audience have found the implications of the message uncomfortable, at least, and unthinkable at worst. Understandable. Retailers have billions of dollars invested in their showrooms and workshops and car makers have been bolstering that investment by insisting on ‘corporate identity’ for three decades. The simple logic behind these investments is that the buyer decides in the showroom and the cars are fixed in the workshop. While the second part of this belief is still true – for the moment – the first is clearly not.

The point of this article is to explain which online choices and investments an automotive retailer should make given that their bricks and mortar are no longer the key ingredient in the customer’s purchase journey.

Social Media: New Route to Car PurchaseResearch by Boston Consulting Group (BCG) in 2016 concluded that digital channels (including internet, mobile and social networks) have created a new purchase journey. “New BCG consumer research in four countries—China, France, Germany, and the US—indicates that 50% to 70% of auto buyers (depending on the country) choose the make and model that they ultimately buy before they visit a dealer’s showroom and that 40% to 50% form their choice on the basis of online information. For most consumers, especially in Western countries, the principal purpose of a pre-purchase dealership visit today is to validate their initial decision, most importantly by experiencing the car in person.”

Contrast that with the traditional mindset of many dealer managements and their sales teams. A considerable number still think that their primary marketing task is to increase showroom traffic so that sales people can take prospective buyers through their well practiced core sales process, as if the buyers were at the beginning of their purchase journey.

Today the main stages of the pre-purchase phase take place online in the customer’s setting, not the dealership. Research and short-listing is done online. Conversion –  price comparison – is done by phone or via apps. Part exchange values are discovered online. The prospect visits the showroom at the end of the process, not at the beginning.

The Three Online Channel Options

Put yourself in the buyer’s shoes. The buyer can choose any one or any combination of three sources of data in their research and conversion period. By the end most prospects will have a short-list of two or three models that they believe fits their needs. Where the prospect searches are now the retailers Channel Options – where the relationship-building process needs to start.

The prospect can: 1.Visit the Manufacturer’s or dealers web sites; 2. Search digital comparison sites and aggregators (multi-brand new and used car sales sites) or  3. Search blogs, forums and social media. The question for a retail dealer is: in addition to their own website,  which other channel should they spend money and time on?

Making The Online Channel Decision

 Automotive Digital Visitors by ChannelThere are three primary internet options: stay on your own website, use the manufacturer’s website, use aggregators or use all three. Using August 2017 data on UK sites from trafficestimate.com, aggregators get many more web visitors each month than either vehicle manufacturers and importers or dealer groups. On average the largest UK dealer groups ( 8 groups with 900 sites between them – representing almost 20% of the UK’s franchised dealer total of 4,900) received an average of 204,000 visits a month between January and August 2017. Impressive? Yes, but considering each group has an average of 150 auto retail sites, it only averages 1,360 visits per month per site – 45 visits per day.

Contrast the dealer groups traffic load to the average monthly website visitors generated by a random group of eight popular UK car brands. Their average in the first half of 2017 was 399,000 per month – almost double the traffic received by the dealer sites. Clearly, automotive brand websites should be part of a dealer’s digital mix.

However, the visitors to motor Aggregator sites dwarfed both these sources with an average of 1,910,000 visitors per month – five times the traffic of a manufacturer brand site and ten times the traffic of a major dealer group.

One explanation may be that there are considerable differences between both what motivates the visitors to each type of site and what is on offer at each site. Visitors to a dealer site may be further down the process in their purchase decision – possibly at the compare “stock and offer” point. Visitors to a manufacturer’s website may be at an even earlier stage – at the “create a shortlist” stage. Visitors to aggregators may be at an even earlier step in their buying process – “creating a long-list”. However, if the visitor sees appropriate content, the time taken to move to a decision could be very swift.

If the data on visitor numbers is to be believed, the appropriate decision is to maintain your own website as a dealer or group, maintain the link to the brand website but, in addition, link with an aggregator site which has an audience in your local market or region. More on that below.

The Three Building Blocks of Traffic Online

Getting an online presence is easy. Getting users to visit is another problem.  Successful retailers understand three basics of online marketing: Search Engine Optimization (SEO); Content Marketing and Social Media Marketing.

Why SEO? The fact is, 95 percent of searchers click on a page that appears on the first page results for Google, Yahoo! or Bing. The closer to the top of the first results page, the greater your chance of a visit. If you have a stock vehicle that is perfect in every way but is not listed on page one of the search results, probably only a handful of people will see it.

Why Content? People buy from people they know. The relationship comes before the sale. Relationships are built by providing  relevant, valuable, interesting and useful content that brings people back time and time again. Blogs, Tips, Training Videos, Comparisons, Survey Feedback, Customer Opinions and so on. But, the media research agency, Clutch Marketing, caution users to, “Spend less on content creation and more on distribution. Creating high-quality content is futile if you don’t dedicate enough effort or resources to get it in front your audience.” In other words, you have to market your content by getting it published or linked to from other sites

Why Social Media? Social Media is the channel through which content is shared. The degree to which content is shared contributes to SEO ranking. Fans and followers are not enough. You need a community that interacts with you to rise up the rankings. Social media is the interaction mechanism. So, if people don’t respond to your content – by sharing it, filling in polls, re-tweeting or making comments – you don’t generate a social media presence. No presence, no followers, no fans.

“On average, in any one market, brands only tweet 8 times and  post around 3 items per day!”

Would it surprise you to find that in any one market, most brands tweet less than a dozen times a day and post maybe three times a day?

Social Media Activity by brands and the AudienceThe research tells us that web visits take place at a late stage in the buying process. Social media is used much earlier so, how can you to relate to and influence on social media. Brandwatch, a social media monitoring service, makes the point that most of the traffic about automotive brands and products on social media is not produced by the brand itself; the content is generated by users. Their Automotive Industry 2016 Report, covering 48 automotive brands, showed that – with a few exceptions – the brand originated only 2% of all mentions, comments, photos and other content. 98% of the content was originated by the users. The activity by social media users far outstrips the activity by brands. In fact, most automotive brands are inactive in responding to their audience….and often they are off-line when their social media audience is online. Brandwatch research shows that the social media audience is active most days and up until late in the evening while most brands are responsive from 9 – 5 on weekdays.

Social Media Activity: FacebookLooked at differently, social media offers retailers a chance to interact directly with the audience, filling the gap left by the brand, and beginning to create a relationship which may lead buyers to a contact or a web visit. According to Brandwatch, although there are a few very active brands responding to comments concerning them, such as Honda UK who account for 39% of the social media traffic about their brand, most respond slowly if at all. What that suggests is an active dealer or dealer group, could fill that space, especially in a regional or small country market.

Building Online Traffic

How to do SEOSEO: There are four main reasons why sites don’t rank high enough on search engines. Technical issues, Metrics, Domain Authority and Not Being Optimised. The last two are linked closely – unless you get ranked you have low ‘domain authority’ and vice versa) so that may be a good place to start. It is pointless to create content without considering keywords. Without keywords the search engines cannot find your content. Without keywords that communicate with your potential users, they will not view your content. The solution is simple. Find the best keywords for your content and use them in the key places. WordPress lists nine locations for keywords and many SEO sites give help for free – see the list here  (https://www.internetmarketingninjas.com/blog/search-engine-optimization/12-free-keyword-tools-replace-googles-keyword-tool/https://adwords.google.com/KeywordPlanner).

CONTENT: Strangely enough, keyword research gives you an insight into what content your audience is searching for. As well as frequent search topics you also find out the language they are using, which you may not have thought of, rather than the language that you use as an expert. Think like your site visitor. Usually, they are trying to achieve a simple task: learn something, buy something, solve something. Check that your content meets your site visitor’s needs. Finally, to check if your content is good, reach out to other sites and see if they are interested in linking with it. If other, reputable sites post links back to you, your site will rise in the rankings.

METRICS: No auto retail professional runs a business without metrics. KPI’s, Benchmarks, Dealer Standards or any number of other formats are used to keep each person, department and activity productive and focused. The same is true of digital but the methods and terms have to be learned and they can be confusing at first glance. One way to make sense of them is to think of digital as part of the traditional sales funnel. Content, Keywords E-mail and SMS Campaigns drive traffic to a platform. This platform may be your website or a social media link which, in turn, drives them…eventually.. to your website. The measurement is of the buyer’s journey to the sale. You may measure many elements before you get to the sale – source of the visit, shares of a post, likes, engagement with a survey, responses to a comment. It can be any event that drives up positive views about your business, your company or your services or signals another step on the way to a purchase. Like a sales funnel it’s ultimate destination is to get a potential buyer to purchase from you. With this sales funnel framework in mind, you can classify metrics into two main types: Attraction and Conversion.

Attraction metrics measure traffic to your platform. The raw data will be available as part of your hosting package but you can add to it if you wish (See the list of web analytic tools in this link). Beyond measuring just how many visitors you get, the first metric that may help is what keywords are driving traffic to you now. The second is what keywords are driving traffic to your competitors. Keep in mind that you are measuring different channels – desktop and mobile. In the same way that a service manager tracks workshop retail and internal, you need to monitor each of the main visitor segments.

Conversion metrics measure the progress through the digital sales funnel.Once you have metrics telling you how many people are attracted to you, the next step is to measure how well you are converting them. Conversion is a point where the visitors status changes. For example: they set up an account, they give you an e-mail address, they download a brochure, they respond to a survey, they save a vehicle configuration, they ask for a call back, they book a test drive and so on. The two key metrics in conversion are: one, conversion rate by source and two, value of the conversion. The first tells you what % of people from source A arrived at Step D. The second tells you the financial value. In simple terms you sell 100 units totaling revenue of $1MN dollars  per month through your website and the site gets 100,000 visitors per month, each visitor is worth $10 but each visitor that gets to agreement stage is worth $10,000. By calculating the conversion rate for each stage of the visitor’s journey you can see the ‘value’ of moving the visitor through the digital ‘sales funnel’. They move from being ‘worth’ $10 at the start to $10,000 at the end.

 

So, if you’re persuaded, digital and social media are the go-to channels, next time: How to create content.

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