I lived in Rochester, New York, when Kodak, the company that actually invented digital photography, failed to embrace it. That single mistake doomed them. Today, business strategists refer to critical decisions as “KODAK moments”—times when a decision, or more frequently the lack of a decision, has huge consequences.
I believe we’re at a KODAK moment in our industry.
September sales reports for automakers were discouraging. The industry’s sales were down 8.3% over last year. The implications of that to revenue in the TV business might be the biggest budget challenge we’ll face in an already scary 2019. We need to act like we’re afraid. The consequences of not acting are significant.
There are 3 things you should know about the future of your auto business:
1. Dealers are being told by many of their industry’s marketing “experts,” and by their manufacturers, that TV is no longer the way to grow their business.
2. When they do use TV, increasingly they see it as something they do for “image.” They’ll use digital marketing to actually sell cars. And, we all know what happens to image advertising in a downturn. That’s why the recent sales figures are so scary.
3. Every 1% increase in the fed funds rate is estimated to reduce auto sales by 500,000 units annually. Plus, higher borrowing costs make it harder for the manufacturer to subsidize % loans. In June of this year, the average cost of a car was $1700 more than June 2017. Anytime costs go up, demand drops. Earlier in the year, there was a sense that consumers were buying because they saw rates going up. Economists predicted that might impact sales later in the year. It looks like they were right.
That’s the reality. For almost everyone reading this, your revenue from car dealers has probably been impacted from some of this already this year. We believe it’s likely to get a lot uglier going forward.
Here’s the stark reality. We can do a whole lot right and if we lose our auto business, we’re in a world of hurt.
The truth, hard to read but sadly true, is this: Today’s dealers are no longer as sold on our products as they have been in the past. That’s what makes this our KODAK moment.
We must fight back.
Here are 7 specific ways you can make a difference in your 2019 auto revenue:
1. Require all general managers to have a relationship with the OWNERS of the dealerships in their markets.
2. USE those relationships. Don’t just have them be social. Too many times, the dealers we think are friends are cancelling spending with us because they’re no longer SOLD.
3. Produce a 6-8 minute video on the power of TV and Digital when used together and require it be shown to every dealer currently using your stations. Dealers aren’t hearing our story from very many people and they need to hear it, especially now.
4. Load that video with two things: Success stories AND examples from actual dealer analytics that show what happens to a dealer’s website traffic when they’re on TV.
5. Have your digital sales leads do in-depth diagnosis calls with the key marketing leadership at your dealers’ stores to determine how your digital tools can help them accomplish their marketing objectives. As dealer spend moves away from TV, we have to be sure that we position our digital assets separate from just being an add-on to a TV buy.
6. Target used-only dealers. Our SVP, Pat Norris, who owned 5 dealerships before joining JDA, says this is our biggest auto opportunity.
7. Pay special attention to prospects just outside the metro. Since customers access dealerships online, the “outskirts” dealer can be competitive without having to be in the big auto location.
8. Have accountability for this effort. Don’t make it optional. Don’t “hope” station leaders do it. Hope doesn’t work.
Dealers, even in a down market, will still spend money on traditional media. But it will be less. It’s our job to make sure it’s with us. It is a sales process, and we have to re-sell our dealers about the power of our product when used in conjunction with digital tools.
Google can’t create demand or awareness. Digital marketing guru and author, Jay Baer, has a great line. He says, “No one ever goes to Google and says, ‘Hey Google… surprise me.’” What creates demand? What can drive the most profitable leads to a dealer’s website? We can. That’s the story we need to tell.
Are you going to tell it? Are you going to act to protect our auto revenue? That’s what makes this our KODAK moment.
There’s no downside here to being on OFFENSE. Only upside. And the failure to do something is also a decision.
The stakes are really high.
Have a GSM or GM meeting in your future? Why not have Jim Doyle or John Hannon speak to your meeting about how to turn your sales staff into a Sales FORCE? We promise powerful, thought-provoking content customized to your company’s needs. Contact Jim Doyle at email@example.com or call 941-926-SELL.