April 1/8, 2019: Volume 34, Issue 22
By Jim Augustus Armstrong
During a coaching call, a dealer from Arizona told me he wanted to market his business. The only issue was he didn’t know where to start.
“What are you currently doing?” I asked.
“Besides our website, we post pretty regularly on social media, we buy leads from Home Advisor and we spend about $15,000 a year on radio,” he replied.
I asked how many sales his radio ads generated last month, but he had no concrete answer. I also discovered the dealer doesn’t routinely ask all of his prospects how they heard about his business.
I’ve had many conversations very similar to this one with hundreds of dealers from all over the U.S. and Canada, and there’s a lot you can learn from them. First, this dealer isn’t tracking his marketing, so he has no idea what’s working and what isn’t. Marketing without tracking is even more wasteful than heaping your money into a big pile, pouring gasoline on it and setting it ablaze. Why more wasteful? Because you can roast marshmallows over bonfires made of money, but you can’t with money wasted on lousy advertising.
Tracking visitors to your website, your AdWords campaign and how many people are engaging with your social media is all important and useful. However, you need to know what’s driving people to actually visit or call you. Every person who phones or walks through your door should be asked, “How did you hear about us?” Record the answers. After 90 days you’ll get a fairly clear picture of what’s driving people to your business and where you should continue to invest your marketing dollars.
The second thing to notice is this dealer has no real plan for his marketing. He heard he should be doing social media, so he does social media. A radio ad salesman offered him special pricing for a 12-month contract, so he bought radio ads. He’d get far more bang for his buck if he prioritized using the “Three Tiers of Marketing.”
Tier one: Warm market
- Past customer marketing (monthly newsletter, etc.)
- Referral program to encourage and incentivize referrals from customers
- Referral relationships with realtors, designers, remodelers, etc.
- Sales system
- Website
- Online reviews
Tier two: Marketing to cold prospects
- Social media
- AdWords (pay-per-click)
- (SEO) Search Engine Optimization
- Online lead capture
- Print ads
- Direct mail to targeted list
Tier three: Broadcast advertising
- Billboards
- Radio
- Television
Implement all the tier one strategies first. Once these are fully up and running, then implement tier two. (Or, if you have the marketing budget for it, implement tier one and two simultaneously.) Implement tier three only when you’ve thoroughly implemented everything you possibly can in tier one and two. Use discretionary marketing dollars for tier three.
Almost all dealers invest heavily in tiers two and three and virtually ignore tier one. Reviews are in tier one because everyone is looking at your online rating, including your past customers and their referrals. Studies show that 88% of consumers now trust reviews as much as a referral from a friend. If you have no reviews or a low rating, you risk losing these once-loyal customers to competitors with a better online reputation.
