By Sara Hey
What does a marketing budget look like for an OPE dealership? If you’re like most people I talk with, you’re having one of two reactions right now, depending on which camp you’re in.
The reaction I typically get from the first camp when I say the word “budget” is “Oh, no! Not a budget!” When I bring up the topic of a budget to the second group, however, they will say, “Yes, a budget! Where has this been my whole life?”
No matter which camp you are in at present, what you have to keep in mind is that a budget is simply a tool that gives us permission and provides a strategy with which to spend our marketing money. I work with about 4,000 dealerships across the country, and I have found that a well-rounded budget isn’t rocket science – in fact, it can be broken down into five primary spending categories, which I’ll itemize here.
Store: 20 percent
If I woke up in your shoes, I would spend 20 percent of my marketing money on my store. This might mean repaving your parking lot, or putting a fresh coat of paint on your dealership. Maybe it means upgrading your interior displays. Whatever it looks like for you, the rule of thumb is that we want to be at right around 20 percent of our marketing budget on our store.
Statistics say if a customer comes in and has a positive experience at your store, but your store doesn’t look pleasing from the road, one out of three of them will not recommend you to their friends. They will not give you the word-of-mouth advertising that has the biggest impact.
This is the impact your physical location has on your marketing. So, take a walk outside your dealership with a fresh set of eyes – identify one or two things you can do to make the curb appeal of your dealership better.
Customer retention: 10 percent
It costs five times as much to get a new customer as it does to retain an existing customer. Depending on your situation, your percentage might be different, but I typically encourage dealerships to spend 10 percent of their marketing budget on customer retention.
Now, I don’t want you to send out a Christmas card to all of your customers – everyone else is already doing that. Instead, I want you to think about some times that you can be in front of your customers when no one else is. For instance, consider “off-holidays” like St. Patrick’s Day or National Ice Cream Day.
A few years ago, our company celebrated National Ice Cream Day with all of our Dealer Success Group members by sending out a $5 McDonald’s gift card and telling them to have ice cream on us. How many other companies do you think did that? Not many.
Find a holiday that resonates with you, and then be creative with ways enabling you to to get your message in front of your customers for those holidays.
Online: 25 percent
“Online” is a broad category that typically takes up a lot of the marketing budget in a dealership. Everything from your website and social-media channels to Google ads and YouTube videos will fall into this segment.
One of the best examples I have seen in recent years when it comes to making the most of social-media marketing was a dealer who began taking a picture of every new customer with their newly purchased equipment. Then, they would post that picture on their social-media pages. If they could share it and get 100 likes on it, they would send the customer a $100 prepaid gift card. It’s a win-win: Not only are you solidifying a relationship with an existing customer, but you’re also utilizing word-of-mouth advertising.
Advertising: 25 percent
As an OPE dealer, I would plan to spend 25 percent of my marketing budget on advertising. This would include radio ads, billboards, print ads, television and direct mail. As a side note, these should all integrate QR codes or text codes whenever possible.
I also encourage dealers to think about utilizing at least some of their advertising money on streaming services. Spotify, Pandora and Hulu are just some of the services where your customers are getting their music and entertainment – and, importantly, all offer options for small businesses to advertise. An additional perk: You can target your ads to reach your customers and receive analytics on your ads.
Events: 20 percent
Many dealers I work with find a lot of success using events as marketing for their dealerships. Everything from open houses, state fairs, and VIP events would fall into this category.
Some dealers have been doing charity events over the last few years, with great success. To set up a charity event, they simply reach out to their local PTA, church group or high-school band and tell them they would like to help them set up a fundraiser. The dealer then pays for the food, and the kids come to work at the event. The kids keep the profits from the event for whatever cause they are raising funds for. The kids promote it on social media and, of course, tell their family and friends.
After the event, dealers have found, when parents, grandparents or friends are looking for a piece of equipment, they typically will come to them first – because they helped out someone they cared about.
Of course, every marketing plan will be based on your location and your plans for your dealership. But one of the best things you can do is to make a plan and then use it as a guide for when and how to spend your valuable marketing money.
Sara Hey is vice president of business development and a speaker at Bob Clements International (www.bobclements.com); contact her at firstname.lastname@example.org or 800/480-0737. This article first appeared in our October 2021 issue.