By Sean Wolfington
September 2006

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Monopolizing on Search Engine Marketing
Domestic Dealers Sell 300 – 500 Units With Search Engine Marketing

Understanding the Game

Would increasing your online sales from 40 vehicles per month to more than 500 vehicles per month get you excited? Red McCombs Automotive Group in San Antonio, Texas, did just that by implementing an Internet marketing strategy alongside a Search Engine Marketing (SEM) program to increase their monthly sales while reducing advertising expenses.

“We realized that in order to increase our sales, we needed to increase our traffic,” said Tony Rimas, director of eCommerce for Red McCombs. To accomplish that, we changed our marketing strategy and implemented an SEM program to attract more quality traffic for less cost. Our new strategy drives more traffic, generates more sales, is easy to measure, and actually costs less than the traditional advertising methods we were previously using.”

Your Move

What is all the excitement about Internet marketing? The Internet offers unique opportunities to create real-time, trackable interaction with customers and prospects, developing an understanding of their individual needs and concerns from the beginning of their online search.

– Special offers can be directed towards customers with specific interests.
– Pricing strategies can reflect best customer buying habits and loyalty patterns.
– Detailed online product/service information can shorten buying cycles.

Ralph Paglia, eCommerce Director for Courtesy Chevrolet in Phoenix, Ariz., shifted marketing dollars from newspaper to online marketing. “I took a look at how much we were spending on conventional advertising and tracked that for a few months before making the decision to transition away from print, TV and radio and move toward digital marketing,” Paglia said. “Our return on investment has gone up, our cost per sale has dropped and our traffic and incremental sales have skyrocketed.”

The Rules of the Game

Search engine marketing should be part of any dealership-marketing program. Research confirms that over 80 percent of prospective Web customers begin by using search engines to locate products, services or information. Ensuring that your Web site is found when a consumer uses a search engine is a complex and time-consuming effort. Because the vast majority of consumers now use a search engine to find what they are looking for, being on the first page of the search results is imperative if your dealership wants to see a return on your investment. The two most popular ways to advertise Web sites are through search engine optimization (SEO) and pay per click (PPC) advertising. The goal of each of these methods is to attract consumers searching for vehicles onto your dealership?s Web site.

Search Engine Optimization (SEO)

SEO involves the ongoing process of creating, developing and coding your dealership’s unique Website in order to to maximize the chance that its pages will appear at the top of the ?organic? or ?natural? search engine results. SEO is a gradual process that can take weeks or months to achieve.

Search engines determine your ranking in the organic search results primarily by analyzing your Web site for the following:

– Keyword relevance?how relevant the keyword phrase is used in your Web site’s cop

– Link popularity?the quantity and quality of third-party sites that link to your Web site

Pay Per Click (PPC)

One of the most cost effective and most immediate ways to advertise on the Internet today is to use Pay Per Click (PPC) marketing. PPC advertisements are the boxes usually shown on the right hand side of search results and are displayed when a searcher types in the key phrases which you have selected. The ads work by bidding on keywords and phrases; the more you agree to pay per click for that keyword, the higher your site will rank in the paid results. The higher the bid, the higher your ad is placed. Since you pay only when someone clicks on your site, you are able to set up thousands of key phrases to increase the probability of attracting consumers. Your strategy should utilize a combination of SEO and PPC advertising to gain maximum impact.

Dealers are becoming more educated on advertising techniques that require less money and generate a higher return from “more targeted” leads that they own exclusively. The smart dealers are generating their own “pure” leads and find that they are easier to close, generate more profit, and are less expensive.

Pure vs. Impure Leads

Every lead is not a good lead. Dealers are becoming more educated on advertising techniques that require less money and generate a higher return from “more targeted leads” that they own exclusively. The smart dealers are generating their own “pure leads”and are finding that they are easier to close, generate more profit, and are less expensive.

Impure Leads

An aspect of “impure” leads, leads that are hard to close or generate little gross profit, is that they can be potentially devastating? even business ending. Impure leads have the potential to be on a federal or state “do not call list” and you can find yourself facing fines of up to $11,000 per call if you process these leads. Whether you?re a small dealership or a large dealership group, if you’re buying leads, the question boils down to whether you are in the legal ?safe harbor.? These impure leads, as defined by recently passed federal laws, states if a person is on a “do-not-call” registry and you have neither an existing business relationship nor their express written permission for you to call them, you could face huge penalties; it is best to steer clear of these impure leads.

Pure Leads

The solution is getting your own “pure” leads generated internally through SEM. The most successful dealers have realized they can generate their own leads with a higher return if they go direct to the customer by appearing on top of their local search results for the vehicles they sell. The best dealers in the country have created their own regional buying service by marketing their site through search engines and multi-media email campaigns so they can generate more profitable sales at lower cost.

Building Your Own Monopoly:

The Regional Buying Service

Becoming your own automobile regional buying service involves having online digital marketing Web sites and SEO marketing strategies that drive people to your dealership Web site. Here are the steps to use to transform your dealership into a consumer regional buying service center using SEM strategy:

– Know your market and compile a list of the most popular search phrases in your market.
– Create and design alluring ad copy to entice consumers to click on it.
– Bid the right amount on the right position for the each phrase.
– Adjust your bids daily to ensure you outperform your competition.

Search Engine Marketing

SEM allows you to reach the majority of the buyers in your market for a fraction of the cost of buying leads, and for much less than traditional advertising. In addition, the leads that are generated are not sold to other dealers so the closing ratio and average gross are higher than leads you and other dealers buy from third parties. The good news is that you pay for positive results only, and it is the most measurable marketing medium in the history
of advertising.

E-mail Marketing

To establish an effective e-mail marketing strategy, the first step is to generate a list of pure leads. “We use multimedia informational mailings to communicate to our customers through targeted campaigns that communicate the right message at the right time during our customers life cycle,” said Tony Rimas, director of eCommerce for Red McCombs. “Our CRM tool equips us with a campaign and customized template for every scenario, such as price, trade, payments and availability. The templates we use increase the speed and professionalism of our responses, and a bonus is that they set the stage for our employees to make the initial phone call.”

Online Marketing

Paglia said Courtesy Chevrolet uses targeted banner campaigns as an effective online marketing medium that allows Courtesy Chevrolet to market directly to people living within the geographic areas around their dealership. “Our main goal is to be where our customers are and try to capture them before they fall trap to third party lead providers who sell our leads to competitors,” he said. Courtesy Chevrolet also allows prospects to register for a promotional offer that allows the customer to be eligible to redeem the coupon at the dealership. “It allows us to treat these prospects just like a phone up,” Paglia said. “Our business development center specialists are amazing at converting these telephone leads into appointments.”

Templated Web Site vs. Lead Generating Machine

So, your Web site looks great, but is your site a generating profit or is it just a hyped-up brochure? “What makes our Web site stand out in front of our competitors is that it is customized to our specs, not just one of those out of the box, cookie-cutter template sites,” Rimas said of Red McComb’s site. “Within a matter of a few clicks, we can update specials and incentives. In addition to creating sales leads, the goal of the Web site is to market the whole dealership. Step one is to help sell a car today, but step two is to promote all the other profit centers (service, parts, subprime, etc.) and to become a marketing center, rather than just an information source.”

Tools

Red McCombs.com offers many opportunities to generate leads and cultivate new opportunity. “Our CRM tool identifies our most successful campaigns and tracks conversions,”Rimas said. ?Additionally, it automatically follows up on our customers from six months all the way to six years, while communicating to our customers though out all phases of the buying, follow-up, and service experiences. In defining our marketing strategy, our management team needed to know where the most profitable Web traffic and customers were coming from. By using our CRM, we were also able to track this important statistic.”

People, Process, & Pricing

Every successful dealership includes a team of individuals who are passionate about what they do. Paglia of Courtesy Chevrolet said, “We look for people who love to serve the customer. Once we find the right people, I make it my mission to create an environment that they’ll never want to leave, because we all know the cost of employee turnover. We’ve also learned that it’s not enough to find the right people; you must have easy processes in place for them to follow.

“It is equally important to have a pricing philosophy that every employee understands and ensures there is fair profit into every vehicle. It’s imperative to involve every member of the leadership team to ensure you create a strategy that everyone can buy into, because the power is in the belief.”

Cornering the Market

Desiring to achieve dominance in the automobile industry, smart dealers have discovered that building and branding a Web site, coupled with an effective SEM strategy will generate awesome results at reduced costs per unit. “We reduced our cost per sale down to about $150 per vehicle while increasing sales by 80 to 180 units each month,” Paglia said. “Our results are a sign of our success and presence in the market. It?s only a matter of time before other dealers do the same.”

Sean Wolfington is the owner of BZResults.com. He can be contacted at 866.645.7730, or by e-mail at swolfington@autosuccessonline.com.