Two weeks ago, Patrick Bennett, Founder and Chief Product Officer at Showroom Logic, posted about building a sound digital conquest strategy. He laid out an effective roadmap for implementing this strategy – model by model and zip code by zip code – in your local market. I would like to spend a little more time on why conquesting shoppers of competing models is worth a dealership’s time.
Patrick explained the concept of sales effectiveness. We all know that every dealership is graded by their OEM on their market share of the assigned vehicle segment registrations in their primary market area (PMA). The assigned segment includes a dealership’s make and all the other makes that the OEM has placed in the appropriate vehicle segment. So, one obvious reason to conquest is to improve a dealership’s OEM effectiveness rating. There is much more to it, however: I contend that shoppers of competing makes and models are the largest untapped bucket of “in–market shoppers” in a dealership’s market area. Here’s my reasoning:
Brand Loyalty Only Goes So Far
Over my 35 years in the auto business, I have looked at hundreds of thousands of transactions that show what people trade and what they buy. The data from trusted industry sources shows that when people replace a vehicle that was purchased new, at least 55% of the time, they switch brands. As a dealer, unless you have a really good relationship strategy, you don’t know you lost this customer and their sale until you get the registration data…sometimes 45 days after the sale. By then, you’ve missed a chance to compete for that shopper.
“Influenceable” Brand Loyal Shoppers are a Small Market
For the remaining 45% of owners who will buy the same brand again, approximately half of them will buy from their previous dealer again. So, if 23% of your owners will buy from you again, you are left to compete for the the other 23% who are not necessarily loyal to you.
What about brand loyal owners who may have bought from your competitor but are not loyal to them? You bet: those folks are also ripe for the taking. The math works the same: 45% of the owners who own your brand in your market, but didn’t buy from you (pump-ins), will buy your brand again. Half of these folks have not decided to repurchase from their last dealer. Since you don’t know who these remaining 23% are, digital marketing may be the most effective and targeted way to reach them and steal them away from another dealer.
So, when you boil it all down, your SEM is trying to reach only 23% of the pump-ins from your brand, in your market, who will buy again this year. Depending on how effective you are in your own PMA, let’s agree that this market can be quite small and challenging to target.
Competing Brand Shoppers = Giant Market
Back to the data again. If 45% (at best) are brand loyal, that means 55% of every one of your competitors’ customers who will buy a new vehicle in your market is a potential marketing target for you. Let’s say your brand has a 10% market share. This would mean that there are as many as 10 times more conquest brand shoppers available to influence with your digital marketing as those who own your brand. More than half of every shopper in your market looking for a brand other than yours is open to changing brands and is open to your message. This is more like trout in a barrel than needles in a haystack.
Dealers Can Deliver a More Effective Digital Conquest Message
Dealers have traditionally always left conquest marketing to the OEM, in part, because it it was hard to target and depended on “mass-market” mediums like TV, which is expensive to buy locally. Dealers also lacked the data to make a compelling case to switch brands. A dealership’s only tools for conquest were largely ineffective online display ads or inefficient direct mail that struggled to produce an acceptable ROI. Today, however, the situation is much different. It is much easier – better, in fact – for local dealerships to conquest.
Here’s my rationale:
- Identifying zip codes where “in-market” conquest shoppers live is easy and products like Showroom Logic’s ZipDriven show you both where they live and how many live there. You can target them easily. They have just added Conquest Sales reports that help you see which models in your market are exceeding expectations. You know exactly which vehicles to conquest and where to target shoppers.
- Gone are the days when you had to drop leaflets from airplanes to blanket a market area. Marketing platforms such as Google and Bing, along with other niche networks, make it easy and more cost-effective to target these shoppers in these market areas when they are “in-market”. No longer do you have to guess about who is in market and/or waste an “up-funnel” message. With paid search and other forms of digital marketing, you reach them lower in the funnel, pay-per-click and can easily track ROI.
- Payment, price, inventory and incentive data makes the messages more compelling to lower funnel, “in-market” shoppers. You know the payment options that competing brands are advertising, so you can easily target these shoppers by highlighting a lower payment and using targeted, model-specific messages in your marketing.
- Vehicle Detail Pages, used on dealer sites or as campaign-based landing pages, make it easy to highlight product features and benefits that will show conquest shoppers why to consider your brand. Companies like Patrick’s Showroom Logic have highly optimized landing pages (Dynamic Conversion Pages) that deliver the shopper directly to the specific message they seek with far less risk of them wandering off to other irrelevant content.
Effective and precise targeting, combined with a compelling, relevant message enables dealership conquest digital marketing to be more effective today than the old OEM stuff. With results that are transparent and near real-time, what do you have to lose? More importantly, what do you have to gain?
Patrick’s article showed you how to effectively conquest competing brands using ZipDriven and a solid digital marketing strategy. I hope I have made the case that:
- The volume of conquest “in market” shoppers is large…maybe even 10X larger than the volume of your own brand.
- The information and tools that help you conquest have just become more actionable and easy to use and tools like ZipDriven make it easy for you.
A wise old friend used to remind me to “fish where the fish are” and “to fish when the fish are biting.” I would suggest to you that your same brand fishing hole might be a little crowded and if you go a little deeper into the woods, you might find a lake that is twice the size with at least three times the fish – and there aren’t many fishermen who have found it yet. So, what are you waiting for?