Case Study

Automark Solutions, LLC Increases Internet Sales 122%, While Reducing Online Marketing Spend Over 50%

CASE STUDY

SUMMARY: Top-producing Hyundai dealer in the mid-Atlantic region believed they were too dependant on 3rd party sources for their internet leads and sales. One source in particular represented the majority of all sales attributed to their internet department. Understandably the sales leadership team was hesitant to sever any relationships which produced quantifiable results, in spite of spiraling costs, and potentially place their leadership position, among in-brand competitors, at risk. Dealer principal decided to contact Automark Solutions, LLC. and explore the
potential to reduce 3rd party dependency.

84% of Internet Leads from 3rd Party Sources

CONDITIONS:
• Dealer out-selling nearest in-brand competitors by a 2:1 ratio but "giving cars away" to do it.
• Internet accounted for 20% of their total sales
• 84% of internet leads from 3rd party sources
• 40+% of those were from one source
• Total internet-related M&A expenses in excess of $400,000.00 annually

IMPLICATIONS:
• "Too many eggs in one basket"
• Poor control over dealership brand
• Sales generated from dealer's website less than 2% of total sales
• Historically 3rd party leads, if aggressively pursued, have a profound effect on grosses.
• Spending in excess of $600.00 per "internet" unit sold on internet marketing and 3rd party lead provider fees.

RECOMMENDED SOLUTION:
1. Implement an internet marketing platform which cost-effectively reaches, captures and converts more online consumers directly for dealer.
2. Fund the initiative by eliminating under-performing (low close rate) lead sources, and re-allocating a substantial portion of the savings realized to a multi-facetted search-engine marketing platform.
3. Optimize dealer's existing website for conversion by integrating a series of proven "plug-ins" which appeal to visitors at all levels of the purchase funnel.

DEALER DECISION:
Implement Automark Solutions' recommendations but retain primary 3rd party lead sources.

PRE-IMPLEMENTATION

STEP 1: Finding the Money

$108,000.00 in Annual Savings Easily Identified

Performance analysis resulted in the immediate cancellation of 3 Lead Providers and 1 Marketplace.
Since Automark was committed to improving internet sales results while reducing expenses, dealer's General Manager collaborated in identifying under-performing sources. While a number of them met the dealer-defined criteria for termination, relationships were immediately severed with 4 of the identified sources. The action resulted in savings totaling $9,000.00 monthly. 50% ($4,500.00) of which was reallocated to fund the new search engine marketing platform.

STEP 2: Understanding Dealer's Online "Reach"

On Average, 3 out of 4 Listings on Page 1 of Google Linked to 3rd Parties

3rd party sources occupied the virtual "real estate" where vast majority of car buyers go.
Automark's thorough analysis of search-engine marketing activity within dealer's market area provided valuable insight into the competitive landscape and irrefutable evidence (summarized below) of the conditions which led to dealer's dependency on 3rd party sources.

TOP-FUNNEL SEARCH RESULTS
10 out of 16 listings (63%) appearing on page 1
linked to 3rd party sites

MID-FUNNEL SEARCH RESULTS
18 out of 21 listings (86%) appearing on page 1
linked to 3rd party sites

LOW-FUNNEL SEARCH RESULTS
15 out of 20 listings (75%) appearing on page 1
linked to 3rd party sites

STEP 3: Understanding Dealer's "Capture Rate"

Website Capture Rate 1.4%

Capture rate affected by traffic sources.
Analysis of the available data indicated the majority of dealer's website traffic was generated directly (direct entry of the dealer's url into the address bar or organic click-through resulting from a search query including their name or brand). However, a significant percentage was attributed to indirect sources such as the manufacturer's website and/or 3rd party sites. Since these sources' are designed to convert visitors into leads prior to linking anywhere it's easy to understand the dynamics driving their visitor-to-lead conversion rate.

IMPLEMENTATION GOAL #1: IMPROVED ONLINE REACH

Multiple geo-targeted campaigns were implemented, targeting consumers at different stages of the purchase funnel. Each campaign featured relevant ad text and website content which combined to deliver high-quality scores. As a result Automark Solutions was able to substantially reduce the cost-per-click necessary to ensure premium ad placement and the desired results.

TOP FUNNEL: Narrow focus – 20% of Budget
• Used key words and phrases frequently searched by top-funnel shoppers
• Brand name appeared multiple times to maximize relevancy & ad visibility

MID FUNNEL: Medium focus – 30% of Budget
• Used key words & phrases frequently searched by mid-funnel shoppers
• Model name appeared multiple times to maximize relevancy & ad visibility
• Utilized multiple unique destination URLs

LOW FUNNEL: Heavy focus – 50% of Budget
• Used key words & phrases frequently searched by low-funnel shoppers
• Ads designed to appeal to different types of buyers
• Message tied to OEM advertising campaigns
• Ads created fear of loss and sense of urgency
• Utilized multiple unique destination URLs

100% of Re-allocated Savings Spent Directly on SEM

Additional Resources Used: Model-Specific & Specialty Micro Sites

While some text ads linked directly to specific pages within dealer's primary website, others linked to content-rich, modelspecific specialty websites developed and hosted by Automark Solutions. This approach provided online shoppers single-click access to the desired information in a graphically appealing format and effectively engaged them at all levels of the purchase funnel in non-competitive dealer-branded environments.

Goal #1: Improved Online Reach

Automark Solutions SEM platform was launched December 1, 2010 and immediately began to take hold and deliver the desired results. Over the next several months the SEM campaigns were monitored and tweaked daily by highly trained staff to ensure maximum performance. Close scrutiny and oversight continues today.

A review of the first 90 days' results with the dealer principal and senior management led to the termination of additional 3rd Party sources including their primary source- Zag/TrueCar.

Although the dealer's decision represented potential savings in excess of $200,000.00 annually the SEM budget was increased by only $3,000 per month.

In the early part of the month immediately following those actions the dealer experienced a noticeable, but
temporary drop in traffic and internet department sales. But as the month progressed and time went by the strategy gained momentum and delivered quantifiable incremental results.

Dealer's Existing Website Traffic Increased by
2,025 Visitors Monthly

KEY FINDINGS:

• On average, dealer generated an additional 2,025 monthly unique visitors to their website vs. same period prior year.
• SEM cost per incremental visitor generated? $2.22 per visitor.
• Specialty micro sites generated an additional 6,000 unique visitors

BUT SINCE CAR DEALERS ARE NOT IN THE HOSPITALITY BUSINESS IT'S NOT ABOUT
VISITORS. IS IT?

IMPLEMENTATION GOAL #2: IMPROVED CAPTURE RATE

Our strategy and approach to improving capture rates (direct lead generation) was and is quite simple really. Provide online shoppers' easy access to the desired information whenever they want it, via their device of choice in dealer-controlled environments which offer alternative engagement paths. In other words; provide car buyers what they need, where and when they want it using a platform which engages them directly with the dealer.

Dealer Website Enhancements

The most widely-viewed pages of the dealer's existing website were optimized for lead conversion using a variety of eyecatching banners and buttons. These calls-to-action featured, among others; the ability to view Daily Deals and other money-saving offers, generate customized Price or Lease quotes instantly on any vehicle in inventory and; participate in a dealer-sponsored promotion which identified sales opportunities and re-engaged them daily. All of which were powered by proprietary Automark technology.

Automated Daily Deals

SOLUTION SUMMARY: Automatically selects aged units from inventory for each model dealer sells on a rotating basis and; applies dealerdefined pricing rules and factory incentives to generate specials daily. Also provides online consumers the ability to sign up and have them delivered to their email or smart-phone daily.
CONSUMER BENEFITS SUMMARY: Appeals to the millions of consumers who engage regularly with the likes of Groupon,com, LivingSocial.com, Savings.com etc.
DEALER BENEFITS SUMMARY: Generates quality leads from ready-to-buy today online shoppers

Automated INSTANT Price & Lease Quotes

SOLUTION SUMMARY: Automatically applies dealer-defined pricing rules and all applicable factory and special incentives to generate and deliver (via email) fully customized accurate price and/or lease quotes on any unit in inventory within seconds.
CONSUMER BENEFITS SUMMARY: Provides hassle-free access to the desired pricing information 24 x 7 x 365.
DEALER BENEFITS SUMMARY: Generates large volume of leads from low-funnel shoppers

Promotional Sweepstakes

SOLUTION SUMMARY: Utilizes proven incentive-based marketing techniques to engage consumers with smart survey technology that indentifies and qualifies in-market buyers. Leverages the information to re-engage them daily via an interactive website featuring relevant information and offers.
CONSUMER BENEFITS SUMMARY: Duh! A new car with no car payments for a year.
DEALER BENEFITS SUMMARY: Captures mission-critical information and keeps them engaged while they're still shopping. Delivers one of the highest conversion rates of any lead converter.

Goal #2: Improved Capture Rate

Automark's converter solution-set gradually integrated into dealer's existing website between
January and October of 2011.

Even though severe inventory shortages during the spring & summer months effectively eliminated the #1 conversion tool on most dealership websites– inventory, this dealer's website lead volume increased 127%.

While Alexa website analytics indicate that traffic to the factory's website experienced reasonably healthy increases throughout the year, lead volume for this dealer from that source actually declined by 2.4%.

The gradual elimination of most 3rd party lead providers throughout the year resulted in a 33% decline in the total number of 3rd party leads handled by the dealer over the prior year.

Overall internet (email) lead volume from all sources combined declined a modest of 3.7% over prior year which
translated to 400 fewer leads.

Dealer Website Lead Volume Increased 127%

 

BUT SINCE CAR DEALERS ARE NOT IN THE LEAD SELLING BUSINESS IT'S NOT ABOUT LEADS. IS IT?

Goal #3: Improved Conversion Rates

Automark's solutions delivered as promised.

Although severe inventory shortages hampered sales during the peak selling season dealer experienced a significant 36% increase in total internet-based sales over prior year.

While some of that increase can be attributed to the Factory and other 3rd Party sources, which combined for an 11% increase over prior year, sales generated as a direct result of Automark's solution-set delivered 76% of the overall increase in unit sales.

Dealer Website Sales Increased 122%!

 

IT'S ALL ABOUT SALES. ISN'T IT?

CASE STUDY CONCLUSIONS

TODAY the subject dealer averages over 300 leads and 25 unit sales monthly exclusively attributed to their website. They no longer advertise on any of the major digital marketplaces and, but for a few exceptions, no longer use 3rd party lead providers or buying services.

Yet they retained their sales leadership position, increased market share, improved the gross profit per unit sold and eliminated over $250,000.00 in internet related marketing expenses annually.

While the magnitude of the results delivered for the subject of this case study may be difficult to duplicate across the brand-spectrum, proportionate results are attainable for any dealer wanting to cost-effectively and exponentially improve internet sales results while dramatically reducing expenses.

Sound intriguing? Then it's your turn to explore the possibilities – contact Automark Solutions, LLC.

 
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