Adapting the use of Online Marketing to Increase Returns
In 2013, Criteria Cars stopped using the market leading trade aggregator to promote their cars. Rising costs, unwelcome hard-sell tactics and the availability of other classified and digital marketing options had encouraged Managing Director Ben Buey to test the water and try alternative ways of creating sales enquiries. In a stepped process of withdrawal, the business moved away from the market leader and today, Ben concludes; “we haven’t looked back.” Here is Ben’s experience.
Since 2008, Ben Buey has been running Criteria Cars in Ely Cambridgeshire. The business has around 40 cars for sale at any one time, featuring largely mid-range hatchbacks, with the odd nod to slightly older luxury stock. Typically, these are priced from £2,000 to £10,000. His target market is the local (20 minute drive time) community. Unsurprisingly, Ben faces plenty of competition and this brings with it pressure on margins.
To survive and prosper, Ben has adapted and in the classic mould of used car retailer, he has shown all of his entrepreneurial skills when it comes to marketing.
When he and his father first opened the business, they immediately looked to what is often seen as the main online car marketing classified service, but having carefully reduced his use of the service over a two-year period in 2013, Ben withdrew from this service altogether. Today, sales remain at, or even ahead, of the levels achieved prior to his change, but business margins have improved markedly. The budget that previously funded his online marketing has been reduced overall and used more imaginatively to deliver today’s strong performance.
Before explaining the steps made by Criteria Cars to switch his online marketing spend, Ben makes an interesting observation;
“If I was starting my business all over again today, I would probably still use the most well-known aggregator brand to establish the business and get local awareness. To do this, I offered cars on very low margins and for us, it worked to get us established. What I would change is how long I stayed with them. Today, if I was starting all over again, after 24 months, I would expect to be established and there my loyalty would end because once you are established there are better marketing options from our experience.”
Making the Hard Decision.
In 2011, while completing the necessary end of month bill-paying, Ben was struck by just how large his main online aggregator bill had become. A call to the business to try and renegotiate his costs fell on deaf ears and he was advised that he really should keep all of his stock on the service to maximise the overall effectiveness. It was the catalyst for change, but this didn’t happen straight away.
A few months went by and the bills remained a prominent part of Criteria Cars operating costs. Ben had always asked his customers how they had found his business to help guide the marketing spend, but now he moved to probe a little deeper and learned that customers typically used multiple sources in their car buying journey; this discovery was game-changing;
“I’d say 85% said they found us on the what is often referred to as the ‘market-leading’ car classified brand, but 90% said they also used other classified sites as well. It was all a bit confusing. What I’ve come to realise is that much like we all called a vacuum cleaner a Hoover, established brands can become a generic name for the wider market. What I learned was that while customers may well go onto the market leading brand most will also visit other sites as well,” reflects Ben.
Making the Change & Impact
Armed with this new insight, Ben set about changing his approach. He halved the business spend on what had been his core classified supplier and then set about ‘blitzing’ other classified options; Autoweb, VCars (now AA Cars), Motors.co.uk, Carsite.co.uk, Carcliq.co.uk, Usedcarsnearme.co.uk; Car Gurus, Exchange & Mart and Parkers, have been just some of the aggregators the business has tested. At the same time, the business built up its social media presence and focused upon building up its online review scores. The impact was very clear:
“Our online marketing spend may have dropped but our sales activity did not; it was encouraging, but we were not yet ready to drop what had been our long term classified supplier altogether,” notes Ben.
The situation changed four years ago. Buoyed by the success of other aggregator and social media services and having invested in their own online presence with a topical newsletter, ‘The Criteria Cars Connection’, Ben decided to try and negotiate his online classified costs with the market leader once more in light of their rising costs. Sadly, all he got was a ‘hard sell’ to remain; more than this, the sales pitch moved into telling Ben the stock he should hold and how having all of this on the service would help his business. Ben recalls very clearly that the whole response was inappropriate to his needs, so he opted to end the relationship, this created a surprising result as Ben reflects;
“I was contacted by the business’ Cancellation team. They offered to reduce my costs by 50%! This really offended me; all those years when I’d tried unsuccessfully to negotiate and then just like that here I had the offer of having my costs halved. It upset me and I turned it down flat – frankly such an offer insulted me and other dealers like me. Their parting gesture was that ‘you’ll be back’, but in truth, I’d rather close my business and walk away from it, than go back with my tail between my legs.”
With the confidence to ‘pull the plug’ Ben made a clean break and has never been back. He continues to refine his use of other channels and has added and removed a number of other aggregation sites; ‘when they get too greedy and pushy I know there are options” notes Ben.
Right now, Facebook is proving to be very useful, working well with the local community of followers he has built up and he is ‘boosting’ some of his posts to increase impact and it is working. Ben concludes;
“There is no one size fits all solution; the biggest known and established names may well work well for some people, but dealers should not be afraid to move away, there are other options – after all consumers know this when they search, so as dealers we should recognise this too! The way forward for those considering a switch is to change gradually, monitor the impact (don’t let one bad week put you off, we all have those) and build up your own confidence and expertise in digital marketing; it is not hard. Having made the decision to move, we haven’t looked back.”
Managing Director, Ben Buey
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