The 4 Most Profitable Car Dealership Marketing Sources

By Jazel Auto Marketing

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Car sales are going well as 2017 comes to a close, and while that certainly takes some pressure off and boosts moods on the lot, dealers are still nervous about the predicted sales slumps in 2018. Car people don’t let a few good months get them unprepared for when the market dips again a bit; they plan and prepare. We want to do our best to help dealerships weather market fluctuations by highlighting some of the most profitable car dealership marketing sources.

Now, we love data, so we have to point out that this ROI ranking is based on  2,276 new and used car buyers surveyed at one dealership. Shockingly, not all dealerships are created equal, so what’s most profitable on this list might not exactly be the same for all dealerships.


#4: Google – PPC and SEO

When it comes to dealership marketing sources that consistently bring in impressive numbers, Google is a crowd pleaser wherever you go. The stats vary, but the most recent available at the time of this writing put Google’s share of the search engine at over 92%. With audience reach like that, it’s no wonder that Google is such an excellent source. The reason that this method ranks #4 in the most effective sales sources for dealers is that is allows dealerships to market to consumers at the right place, the right time, and when they have the right mindset. Unlike a display ad that pops up while you’re just going about your internet business, SEO and PPC have the benefit of being located directly in front of the consumer when their mind is on that topic, driving more traffic to your dealership website.

It all comes back to research. Car shoppers do hours of research before purchasing, and dealership marketing largely fails at providing shoppers with useful information in their research pursuits. SEO and PPC aren’t distractions from the research process, they’re a part of it. In fact, 36% of customers who came in as a result of PPC or SEO had spent over a month vehicle shopping. PPC and SEO bring in shoppers who have been doing their research, and that means seriously considering alternatives. 95% of PPC and SEO sourced customers had visited and looked elsewhere online for their vehicle, but that isn’t a bad thing. Dealership marketing on PPC and SEO is particularly effective because it places your dealership and your competition in very close quarters. For example: Someone might have started a Google search for a Silverado, but saw your PPC ad that offered a great deal on an F-250, and switched over.


#3: Drive-By Shoppers

One of the best dealership marketing sources is your own lot. It makes sense. People drive by their local dealerships regularly, and that familiarity becomes a major factor when it comes to why people come to a dealership.

To truly capitalize on this dealership marketing source, dealers can spruce up their storefronts and lots, try to visually stand out from their competition, and put on events that encourage people to drop by, even if they don’t get out of their car. Maybe offer a free cup of coffee or hot chocolate on a cold day, a charity car wash on a hot one, or seasonal events like pictures with Santa. But beyond just being a useful piece of information, the fact that drive-by shoppers are such a good dealership marketing source can tell us something important about the industry as a whole right now.

The fact that drive-by shoppers are a solid dealership marketing source tells us that a storefront (at least for the dealership in this study ) is still more valuable than the front page of Google. For now. The online shift that is sweeping the world is absolutely an opportunity for the automotive world to capitalize on, but it for now it seems that shoppers aren’t ready to give up a physical location. Still, 85% of these customers still shopped online, and 68% visited the dealer’s website. Just because they see you everyday doesn’t mean that shoppers will give up their research – and this has implications for your online presence.

A shopper may drive past your dealership on their way to work everyday, be amiably disposed to your business, but not necessarily come straight to your doors when they want to buy a car. They are still going to do some research online, and your dealership website needs to be an exceptional representation of the quality, professionalism, trustworthiness, and character of your dealership. If your storefront looks amazing, but your website is sub-par, these drive-by customers might not be an enormous source of sales.


#2: Friend Referrals

Referrals are enormously valuable, and dealers know it. That’s one reason why almost every dealership has some sort of referral program in place, and why it ranks #2 on the list of the most profitable dealership marketing sources. Friend referrals are a solid source of sales, with about 38% of friend referrals in the study resulting in the purchase of a used vehicle.

The true power of referrals in dealership marketing is evident in Tesla’s referral program. When referred by a friend, new customers get $1,000 towards their new car. The friend who referred them gets a little perk too. They are rewarded with automatic entry into the raffle for a Ludicrous P90D Model X, plus an additional entry with each referral they make. They can also get a Tesla duffle bag after two referrals, an Owners jacket after 3, Tesla wheel rims after 5, and an invite to their next unveiling event after 10. So, do people actually do this? YES. Tesla’s referral program generates a 40x ROI. We’re pretty that number includes one owner, who referred 188 friends and generated about $16 million in profit for Tesla. Naturally, the customer won a P90D Ludicrous Edition Model S.

Now, obviously Tesla isn’t a blueprint for the automotive industry, it’s a disruptor. But it’s a disruptor because it is so fabulously successful, and there are always lessons to be learned from the success of a rival. Implementing simpler and more appealing referral programs (like Tesla’s) can help boost not only your sales, but the profits your dealership will continue to make for many years to come. Not only are referrals great for landing sales, but referral customers are actually just better customers. That sounds rude, but in terms of the bottom line, it’s true. They have a 25% higher lifetime value, are 18% less likely to churn, are 25% more profitable over their lifetimes, and are between 4 and 5 times more likely to refer additional customers.


#1: Previous Customers

Ladies and gentlemen, we have our winner. Previous customers are the most profitable dealership marketing source. Why? It’s all about customer experience – on and off the lot. Two of the best dealership marketing tools (and general marketing tools, for that matter) are exceptional customer experience and relationship development. A repeat customer was once a first-time customer who was won over by excellent customer experience and whose relationship with the dealership didn’t end with the purchase.

90% of repeat customers looked elsewhere before they came back to the same dealership. That’s an indication that a dealership is nailing their CX and relationship development in their dealership marketing, at the very least in comparison to their local competition.

74% of repeat customers purchased a new vehicle, meaning that repeat customers are not necessarily just coming in to have their car tuned up or for other small services.  Repeat customers are repeat car buyers. Investing in on and off the lot CX, as well as messaging, email campaigns, events, or other forms of relationship development is a dealership marketing tactic that consistent brings in the high returns – the highest, in the case of this study.