Wednesday, October 24, 2012 | Edited by Daniel Moores
||Auto Dealers Cautious About 2013 Ad Dollars
Auto sales continue to rebound this year, but dealers say they are cautious about spending more on advertising next year. Slightly more than half who responded to an unscientific online survey said they do not plan to spend more on advertising in 2013.
Of those who do plan to spend more, about half said the increase would be less than 10 percent, according to the Automotive News survey.
Strict cost controls instituted during the recession are still in place at many dealerships.
"I've seen the good, the bad, the ugly and the double ugly, as I call it," says Albert Clark, owner of Clark Chevrolet Sales Inc. in Cayuga, Ind., who has been in the business more than 50 years.
"I had to make a lot of cost cuts. Everybody -- not just small dealers, big dealers, too -- everybody got their sales volume cut in half in the last six to seven years."
Other dealers say they're spending the right amount on marketing, but the mix needs tweaking.
The $5 million annual marketing budget at Paragon Honda and Paragon Acura in New York blends traditional and online advertising such as Google paid search. About 40 percent goes to digital, says Brian Benstock, general manager of the stores.
Benstock's budget amount won't change in 2013, but he will shift about 5 percent of it into digital.
"We have a formula that's really working. It's not broken," says Benstock, whose stores sell about 11,000 new and used vehicles a year combined. "But, like an engine, we can fine-tune it. Fine-tuning it for us right now is a half-a-turn of the screwdriver."
Survey invitations were e-mailed to U.S. dealer principals and dealership general managers. One hundred sixty-six responded.
Despite the overall caution, respondents such as Benstock were enthusiastic about digital advertising. About two-thirds of all respondents said they plan to spend more on it.
Meanwhile, only a third plan to spend more next year on traditional advertising such as print, radio and TV.
Data compiled by the National Automobile Dealers Association indicate the average U.S. dealership spent $363,168 in 2011 for advertising. Expenditures per new unit sold dropped 4 percent from 2010, to $628.
Last year dealers spent their largest share, 25 percent, on Internet advertising, NADA says. TV was second at 20 percent (Radio ranked fourth, behind Newspaper, at 16%).
Clark Chevrolet, about 150 miles south of Chicago, is in a small town near the Indiana-Illinois border. Clark sells approximately 250 new and used cars a year to customers from as far away as 50 miles, Clark says.
But Clark says many of his customers are regulars. He wants new, younger customers. So he plans to boost what he spends on digital advertising from about 30 percent of his ad budget to about 50 percent in 2013.
"I've been looking at that real good the last two weeks," Clark says. "We're getting more results than I thought from digital, more sales, and sales are my results. Lookers don't count. It's those people who spend money."
Lynn Thompson, co-owner of Thompson Sales Buick-GMC-Cadillac in Springfield, Mo., says, "A minimum of a third of our budget goes to digital and about 35 to 40 percent of our cars are sold on digital leads," He sells about 2,000 new and used vehicles a year.
Easy to measure
Thompson prefers digital advertising because it's easy to measure the return on investment, he says.
"You know how many leads are coming in, how many of those leads are set up for appointments and how many we sell off those appointments," Thompson says.
Thompson monitors digital spending closely. For instance, he was spending thousands of dollars a month this past year for advertising on shopping site autotrader.com to reach shoppers in Joplin, about 60 miles away. But he says the program underperformed because many of the shoppers were too far from his dealership.
So Thompson cut his monthly spending to autotrader.com by 28 percent, he says. "We watched our number of leads coming in and it didn't pay off, so we backed off," Thompson says. But he says autotrader.com remains his top generator of online leads.
Many of the respondents said that they were planning significant increases in digital advertising. Of those who planned more digital advertising next year, half said the increase would be between 11 and 20 percent. Five percent said it would be more than 30 percent.
A.J. Hiers owns four dealerships in Florida that sell about 3,400 new and used vehicles annually. He spends 50 percent of his budget on radio, 20 percent on newspapers, 20 percent on digital and 10 percent on cable TV. He won't change that next year.
He says a big obstacle to reaching customers is pay-per-view TV programming, which has little or no advertising. "Or you've got TiVo so you can blow through the commercials. The big enemy of radio is satellite radio and iPods," says Hiers, who owns Infiniti of Melbourne, Boniface Hiers Mazda and Boniface Hiers Kia, all in Melbourne, Fla. He also owns Boniface Hiers Chrysler-Dodge-Jeep in Merritt Island, Fla.
He adds that few people under age 40 read newspapers.
Says Hiers: "You've just got to figure out what works for your market."
(Source: Automotive News, 10/15/12)
||Retailers Push Aggressive Deals to Lure Stingy Holiday Shoppers
Retailers are rolling out aggressive sales earlier this holiday season to lure consumers, who are expected to keep a tight grip on their wallets.
Average shoppers are projected to spend only $9 more this season than the $740 they shelled out last year, according to a survey by BIGinsight. The National Retail Federation is predicting sales growth of 4.1 percent, compared with a 5.6 percent rise last year.
"For consumers, they've already figured it out. They know how much they want to spend, and they know how much they want to save," said Kathy Grannis, a spokeswoman for the National Retail Federation.
Nationally, consumers continue to grapple with mixed signals as the economy teeters back to health. The national unemployment rate fell to 7.8 percent in September, the lowest level in more than three years. Consumer spending has also picked up, with retail sales posting their best two months since 2010.
But that hasn't been enough to compensate for the sluggish economic recovery. The uncertainty surrounding the looming presidential election as well as the feared "fiscal cliff" of spending cuts and expiring tax breaks will likely dampen holiday spending, analysts said.
"People, earlier in the year, thought the economy would come back stronger than it did," said Craig Johnson, president of Customer Growth Partners, a retail consulting firm. "Now, they're saving more, and they've gotten a little bit more cautious about their spending. We're not going to see the kind of growth that we did last year."
To make the most of lackluster projections, retailers, which generate 40 percent of their revenue during this season, are rushing to lock in as many sales as possible.
"The really aggressive deals are starting now," said Trae Bodge, senior editor of RetailMeNot.com, a purveyor of online coupons. "Retailers are going to be struggling to get a piece of the pie, which is pretty small this year."
Sears and Kmart have introduced free layaway programs that extend to online purchases and Black Friday specials. Toys 'R' Us is allowing customers to reserve popular toys ahead of time. Target and Best Buy have announced price-matching plans. And at Walmart.com and Amazon.com, shoppers in select cities can order products for same-day delivery.
"The economy continues to struggle, and what we're seeing is that consumers are preparing earlier and earlier for the holidays, so they can pay a little bit now, a little bit later," said Jai Holtz, vice president of financial services at Sears. "And with free layaway, it allows (consumers) to buy their Furby or TV right now."
The early onset of holiday shopping will help boost sales, analysts said. It will also reduce the risk of retailers being left with excess inventory at the end of the season. Retailers can measure consumer interest before the season is in full swing and decide whether to buy more of an item, analysts said.
"Historically, retailers started Black Friday with tremendous amounts of inventory, hoping to blow through it all," said Teresa McCarthy, director of the Global Supply Chain Management program at Bryant University. "Now, they're starting earlier so they can find out very quickly exactly what's going to sell while they still have time to get backup goods shipped from China."
But some say all might not be lost for retailers this year. Bill Martin of ShopperTrak, a market research firm, says the 32-day window between Thanksgiving and Christmas -- the longest possible gap between the two holidays -- gives stores a leg up in amassing sales.
"It could represent an opportunity for retailers to convert visitors into buyers," Martin said, adding that his organization is predicting holiday sales growth of only 3.3 percent this year.
Johnson, the retail consultant, isn't expecting miracles.
"It's going to be an okay Christmas," he said. "A satisfying Christmas, but not a sparkling one."
(Source: The Washington Post, 10/19/12)
||Blinded By Pink, Consumers Are Cause Skeptics
When it comes to pink ribbons and cancer awareness, it looks like consumers are increasingly suspicious: A new study from Cone Communications reports that an astounding 77% of people believe companies' interest in cause-related efforts is "solely for corporate gain." And only 26% think that support has done any good.
And while Lance Armstrong's abrupt fall from grace is likely to create additional challenges for cancer-related efforts, Craig Bida, Cone's EVP of cause branding, tells Marketing Daily, "it's important to realize that consumer expectations that companies contribute to these causes have never been higher. People believe companies need to do more than just make money."
The problem, the research finds, is that consumers perceive the pink parade as both overwhelming and ineffective. While 92% say they believe breast cancer is a critical cause for businesses to support (and 86% have a positive impression of companies that do so), 68% say they are blinded by all the pink, and that few cancer cause promotions stand out to them. Also, 90% wish corporate support would happen all year long, not just in October.
What that means for marketers, he says, is that cause-related efforts need to be both more transparent about how they support the cause and more communicative about the results.
And, perhaps as fallout from the Susan G. Komen Foundation flap earlier this year, when its leaders were forced to step down after a controversial decision to stop funding Planned Parenthood projects, the Cone research reports that consumers are also fussier about who and what companies do with their breast-cancer funds.
Just 6% are content with corporate dollars going toward disease awareness and education, the survey finds. Instead, they would rather see contributions go toward research (46%), screenings and prevention (26%) and support for women and families actually affected by breast cancer (22%).
And they are increasingly leery of one or two large foundations, such as Komen, dominating the conversation. "For nonprofits, that desire for diversity is good news," Bida says, "and might mean a seat at the table for more organizations."
Marketers are responding, Cone reports, by offering "curated collections" like those from Macy's and Sephora to broaden choices, by awarding money to more groups, and increasingly, by putting a face with their efforts, like Ford's Models of Courage and Caribou Coffee's Amy's Blend.
"Overall," he says, "consumers are looking for impact."
Bida doesn't think that the Armstrong debacle, or Nike's dumping of the cyclist for doping, will have much of a long-term effect. "Armstrong is a celebrity, and now a fallen hero. But people weren't wearing those bracelets for Lance. They were wearing them for people in their families and communities. That grassroots participation won't evaporate overnight," he says, pointing out that Nike intends to continue its support of Armstrong's Livestrong Foundation, even while dropping him as an endorser.
In its statement, Nike says it "plans to continue support of the Livestrong initiatives created to unite, inspire and empower people affected by cancer."
(Source: Marketing Daily, 10/18/12)
Daily Sales Tip: The Planned Presentation
The best sales presentation possible is not vastly different each time. There are certain benefits and features of every product that must be communicated, and those benefits and features must be communicated in the best way possible. Best, by definition, means one, exclusive, alone; the best way is better than any other way by its very definition. There are not five best ways; there can be only one best way.
Your goal is to give the best presentation you can to each and every prospect. How do you get there? You have a choice based on your experience -- shoot from the hip, go with the flow, or plan your presentation. It's your choice, but the only way to give the ever-elusive "best" presentation and to give it every time is to plan it.
Here are some thoughts about why it pays to plan your presentation:
I. Have Planned Responses
If your presentation is planned, you'll have time to think about your prospects' verbal and non-verbal reactions and comments. If you have to think of what you're going to say next, you simply can't do that.
II. Gain Heightened Efficiency
Efficiency is the second advantage of planning your presentation. No non-relevant material can creep into your presentation to distract you or your prospect. You don't repeat yourself. You cover all the salient points in the most efficient manner possible.
III. Guarantee Thoroughness
Third, you guarantee that you are more thorough. Perhaps that is really just a part of efficiency, but it helps to think of it separately. You never leave anything out, and you never present important points in the wrong place in your presentation if you've planned and practiced.
Unplanned presentations can go on forever, leave important points out, and in general be wastes of qualified prospects' time. You can also miss important buying signs, interest signs, and signs of concern because you have to worry about what you are going to say next rather than pay attention to the nonverbal communication that is taking place. If you are only listening to yourself, you can't listen to the prospect!
IV. Practice to Make Perfect
Another reason for giving a planned presentation is to better gauge your results. Very few professional athletes experiment with their shot, stroke, or swing.
All the pros tweak and constantly strive to improve, but their basic motions stay the same. It's when they stray from that basic motion that they have slumps or bad games.
The same is true in sales. Great salespeople can have bad days, bad weeks, or longer slumps when they stray from their basic planned presentation.
Source: Author/entrepreneur/sales coach Tom Black