I wish I had a dollar for every time a talk over beers gave me an “Aha Moment.” I’d be able to pay for even more beers!
A buddy of mine is in the marketing department of a large auto dealer. But, recently, the store managers have been cutting the ad spend for their shops. You see, at this company, advertising is not a corporate decision, but controlled by the individual store managers.
These store managers, almost entirely, have only a sales background. The best sales person gets promoted to Sales Manager and the Sales Manager gets promoted to Store Manager.
The managers don’t value advertising. To them, ads are strictly an expense … because, “the real sales are done by salesmen!”
What’s funny is that most sales people understand that sales aren’t just a relationship game, but a numbers game as well.
“For every 100 people who walk on the lot, I can get 65 to test drive a car. Of those 65 test drives, I’ll write 45 deals and close 80% of those deals.”
OK, Mr. Sales Person … if that’s the case, what if good advertising turns those 100 people on your lot into 300? Or 500? Or 1,000? How does your numbers game look then? But they simply don’t think that way. The managers don’t look to the future, knowing that this month’s ads will bring in more customers over the next few months. Managers are judged on THIS month’s numbers alone. And, “if I can trim a few thousand in ad expenses this month, my numbers will look better. If I look good THIS month, I’ll be a hero” – ignoring the reports showing that dealers who spend more marketing dollars have higher total sales overall.
Ironically, is that this particular dealer became one of the largest auto groups in the nation through advertising and branding!
The owner built his first dealership in a rural area because it was cheaper and there was less competition. He became one of the first auto dealers in the area to advertise on TV and radio – an innovative idea among ol’ school car dealers. It didn’t take long until everyone knew his slogans through his ads.
In short, he took an out of the way car lot and branded it as a destination location, for good car deals. Advertising worked!
Now, decades later, the auto group selling vehicles in multiple states under more than a dozen different auto nameplates, has turned their advertising budget over to a bunch of sales people who see no value in the tool that built the company.
The “Aha Moment”
To run their businesses, the individual dealerships need lights. They need water. They need air and heat. They need snow removed from their lots in the winter. And they need ADVERTISING!
Branding built the corporation and the Corporate Office needs to make sure that branding is consistent through the entire automotive family, regardless of how the store managers want to trim bottom-line expenses.
That said, marketing needs to be treated like a utility.
You can’t cut electricity or water from the budget to make this month’s numbers look better. And you shouldn’t be able to cut advertising either.
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