As low inventory and chip shortages stick around, should dealers cut back or double down in their advertising spend? On today’s show, we’re pleased to welcome back Bob Lanham, Facebook’s Head of Automotive Retail, and John Fitzpatrick, Co-Founder, and CEO of Force Marketing to give us their perspective on the most effective strategy.
Lanham begins the discussion, asking the question— should car dealers hold out or ‘double down’ on marketing? Research has said, brands that advertise tend to build market share or brand equity. Fitzpatrick says, leaning into how effective your data can be, is always a good strategy. He says, there are a few ways to communicate with your marketplace. Bring customers in and let them know, it’s a good place to buy parts and accessories and service their vehicle. Vehicle acquisitions are a great opportunity for dealers and pre-ordering. Lanham also says first-party data and targeting specific interests are some of the tactics they use. He says, doubling down doesn’t mean, doubling your expenses but double down on tactics that work.
Lanham says he’s interested to see how we’ll be buying and selling vehicles. Change is marketing and change is also the customer experience. Fitzpatrick says, one thing we’re learning about consumers is they are willing to wait and pay for what they want. He says that is why it’s important to showcase your brand promise. So often, it’s never truly about price but the other elements that are in the customer experience. Covid is teaching everyone this in real-time, says Fitzpatrick.
More progressive dealers have been utilizing fixed ops strategies on Facebook. Lanham says they utilize it by leveraging first-party data. They know who, what, and when they sold to a particular customer. Fitzpatrick says for so long, the industry has been underinvesting in the loyalty rate of customers. You need to strengthen the fixed ops conversation and then fix the new car loyalty rate conversation. Lanham hopes in the future, you’ll hear “lifetime value” and become a bigger role in how we measure success, not only in marketing but in the stores as well.
Fitzpatrick ends the conversation by discussing what’s most important when it comes to ad spends. Fitzpatrick says, their overall ad spend is down, this year, nearly 10%. However, year over year, their Facebook ad spend is up 91%. They don’t ever suggest you spend money on what you can’t measure and doesn’t have a return on investment. Cost per unit sold and cost per unit service is most important. He says they are also up 40% in Facebook spend since Q1, of this year. He says, to have those types of stats, shows you where the most bang for the buck is.
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