Don't 'Turn Off' Advertising When Times Get Tough
“Half the money I spend on advertising is wasted. The trouble is, I don't know which half.” – John Wanamaker
“Stopping advertising to save money is like stopping your watch to save time.” – Henry Ford
Woe be to the small business owner who pores over his or her marketing budget every September, October or November in preparation for the following year.
Maybe you don’t pore over it at all, but many of your competitors do.
It’s no secret that most shops’ advertising/marketing budgets are about 2% of sales, nationally. Some dealerships in certain areas are a little higher due to strong competition. And a few can get away with very little advertising if their word-of-mouth and reputation are extremely strong.
But the vast majority of independent tire dealerships are uniformly close to 2%.
If you want to dig out of a financial hole, it may be tempting to turn off advertising for a while. However, as Henry Ford said, stopping advertising is not a good idea.
The hard part is knowing where to invest that marketing money. Many dealerships have opted to lower their newspaper spend over the years. Some have dropped value pack advertising. Others have tried to venture into digital and social media marketing on the cheap by hiring a relative with no experience.
This, of course, is part of the normal cycle of introducing a new expense. First, we try to see if we can do it for close to free. Then, when this approach causes problems, we throw money at it and the situation gets worse.
We are now - or should now be - in a place where digital marketing is seen as a relatively large expense that requires expertise. You just can’t go and buy some keywords or hire a generic company to post coupons on Facebook for you.
If you are going to advertise in the digital space, you need a plan, a budget and an expert. Do what you can do within your budget, and spend wisely.
Traditional advertising methods and channels have been shrinking. But they aren't going away anytime soon.
Traditional advertising still has a place in your budget. Human beings are creatures of habit. If your company has been in the church bulletin for 50 years, and people still talk about it, you need to keep doing it.
The idea is to look at which areas of traditional advertising are not working for you anymore and convert them to new areas.
For many of you, continuing to advertise in the Yellow Pages is long past its prime. There is hardly anyone left that goes to the phone book and starts flipping through it.
Remember, all of your marketing should be locally focused, but your traditional, paper-based advertising needs to be hyper-local. In other words, it should be very targeted, direct and aimed at a specific segment of the community.
What content should be in your advertising? While coupons still provide a return, you may want to take a look at how you present them.
Vehicles today, even within the same line of models, can be drastically different, so a $49.99 price point oil change should be changed to something more along the lines of “$10 off” an oil change or a “$20 rebate on the purchase of x service.”
Just like publishing a long list of tire sizes and prices is something we don’t do anymore, so is itemizing a particular service at a particular price.
When thinking about the content of your advertising, don’t forget that not everything you do needs to be a discount.
You can advertise an event like a car show that you are promoting or you can have a whole campaign built on themes for the year: back-to-school, winter, spring vacation - however you want to present the business.
Whatever you do, understand that whatever level of business you produce, you can spend around 2% of that revenue on trying to get more business back through the door.
If your advertising is hitting its mark, revenue will grow, which will allow you to increase your spend.
And for those of you who find yourselves absolutely overflowing with work and turning customers away, don’t forget that advertising can work like a faucet.
If you are full, turn the faucet down so you can focus on quality service for the people already responding to your efforts. Just don’t try and stop time by breaking your watch.
Dennis McCarron is a partner at Cardinal Brokers, one of the leading brokers in the tire and automotive industry (www.cardinalbrokers.com) To contact McCarron, email him at email@example.com.