What can automotive businesses learn from the likes of Google? Well, a lot. When the opportunity arose to attend the iStrategy Global Digital Media conference with keynote speakers from Google, Facebook, Microsoft, ESPN, MTV and Dell, I was not going to turn it down. One of the best attributes of the internet is that it is ultimately a scalable business model and what works for Dell (who earned $10B US last year in online sales alone) can work for any NZ based car dealership.
Before I discuss the learnings and hopefully provide you with thoughts and ideas on improving your internet results, I would like to cover off the difference between tactics and strategy. There is a lot of great information forthcoming from the US on internet based automotive sales and they do set the benchmark. When watching a pitch from a person perfect hair, bright white teeth, a blue shirt and brown dockers, it is generally a vendor that has identified a revenue leak in your business which they can plug with a product. These are tactical solutions.
Understanding internet trends and merging this with your business direction is strategy.
While the internet is not owned by any single entity, it is shaped by a number of very large players. For most of us Google dictates what we see and the order we see it, Facebook provides access to the third largest country in the world (with 650 million virtual inhabitants), Microsoft powers the desktops and gaming consoles we use, Twitter distributes news and information faster than light and the online media companies are replacing broadcast TV in the supply of content. The world is changing rapidly.
At AutoBase we have an advantage that most businesses do not have. The internet is our day job and we spend many hours ensuring our understanding of the above is translated into value for our customers. Lesson One - Partner with a company that can keep you up to speed and provide advice on emerging trends within the internet environment. Your main focus should be on your strategy for results not buying more and more vendor solutions.
Lesson Two - Presence is the key to strong internet sales. The internet is not a friendly place; it is very competitive and not free. This is the part Google loves as businesses want more and more presence on the web and they are prepared to pay for it. Organic search results (which are the ones where Google does not receive a dollar) are dropping further down on the first page and the sponsored searches and paid for advertising is increasing. With the Rugby World Cup coming up, try to Google ‘Auckland Bars’. What you see is the face of the internet future with hotly contested competition for first page internet real-estate. We have a model that we share with our customers outlining that 70% of online spend needs to be on gaining a strong web presence. In our unbiased view this should be directed to Trade Me Motors. A scattered spend on the web gets you nowhere, it needs to be focused to get you to the top of the page.
Lesson Three – 20% of online spend should be targeted at enhancing your listing to ensure a great click through rate. Using the Trade Me Motors example, a feature listing can be used to place your listings at the top of each relevant search category. While the internet can be a bit hostile the 80/20 rule applies. It is very easy to represent your business within the top 20% as 80% of businesses put very little effort into their web presence. Again, have a look at Google to see this.
Lesson Four - Treat anybody you communicate with as well read. The last Nielsen Automotive Report found that after completing their online research 48% of customers were prepared to drive between one and two hours to visit a dealership. There is also the Gen Y factor where they wish to have more and more of the transaction and discussion completed online.
Lesson Five - Social Media is the panacea. Well to be honest that is a lie. What social media or what now just seems to be called ‘Social’ provides is access to a secondary customer base. In old school terminology we know it as referrals and repeat business. These tools and applications provide a great way to stay engaged with existing and potential customers. The key is not to get too hung up on the hype and to choose what suits your business to communicate with your future customers the best. If you can write an entertaining and engaging blog relatively often (a few paragraphs a couple of times a week is good) - write one; if it does not come easy - don’t. Twitter may be for you if your customer base is more niche and fast, quick communication is the goal. Facebook works well if you run community events or provide sponsorship as part of your business strategy. If you are a dealership, do not just blast your cars out there because as the young of today will say ‘Epic Fail’. You want a conversation that leads to a sale.
If some of the above has been of interest we will be running seminars for our customers in the coming months covering these topics and more. On the chance you have read to here and been totally uninterested drop me a note and I will supply you a list of the best bars and restaurants we found in Melbourne.
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