How much does it cost to attract one used car buyer to an auto dealer?

[Ryan Hartigan]

We helped hire and train digital marketers for car dealerships for a few good years. It is best for the dealers that can manage it, but most dealers can't manage a marketer in-house properly, and it's extremely hard to get good at generating leads and bringing them to close. Most in-house marketers are social media managers at this point. Especially for franchise dealerships because of co-op dollars, it is often better for a dealer to go through an agency than have their own marketer running campaigns.

 

[Mric1]

Let me challenge you a little.

What is going to differentiate you from other marketplaces and make dealers want to sign up?

Or perhaps more importantly, how are you going to get consumers to visit your marketplace? Dealers won't sign up unless you have a lot of in-market eyeballs to offer them.

Many have tried and failed to create a new marketplace site. I would just urge some caution before you sink too much time and resources into creating yet another run-of-the-mill marketplace.

The idea is based on AI, and information processing on a photo of a car. And based on this information, showing the user autos and additional information. Yes, I have trouble understanding dealer preferences and pains. But there will be no problems in attracting users, I have been doing SEO for a long time, and I had experience in attracting traffic on used and salvage cars for a Copart broker (I worked in the team of this broker), and had my own project for selling auto history reports, and aggregated there VIN traffic. With the project on the history of cars, I never got to the dealers, it was not B2B. And as an option, it could just be a technology that we can immediately sell to a large marketplace.

 

[Ryan Hartigan]

The idea is based on AI, and information processing on a photo of a car. And based on this information, showing the user autos and additional information. Yes, I have trouble understanding dealer preferences and pains. But there will be no problems in attracting users, I have been doing SEO for a long time, and I had experience in attracting traffic on used and salvage cars for a Copart broker (I worked in the team of this broker), and had my own project for selling auto history reports, and aggregated there VIN traffic. With the project on the history of cars, I never got to the dealers, it was not B2B. And as an option, it could just be a technology that we can immediately sell to a large marketplace.

What do you mean by information processing based on a photo of a car?

Do you mean it will identify the make and model of the car using AI image recognition?

I’ve been in software game for over a decade now and automotive for almost as long. I don’t know of an immediate use case for this - marketplaces already know what kinds of vehicles are being uploaded.

I think the most important thing that everyone gets wrong when they start to build a software is they focus on the technology first. What you should focus on first is what the market needs right now, and then the technology comes after

 

[ASuave]

What do you mean by information processing based on a photo of a car?

Do you mean it will identify the make and model of the car using AI image recognition?

I’ve been in software game for over a decade now and automotive for almost as long. I don’t know of an immediate use case for this - marketplaces already know what kinds of vehicles are being uploaded.

I think the most important thing that everyone gets wrong when they start to build a software is they focus on the technology first. What you should focus on first is what the market needs right now, and then the technology comes after

Well said.

There's a lot to consider behind the notion that if something was a true "need", it would already exist.

The majority of new products/services are repackaging of existing things, or providing them in a different way.

turo is car rentals. Airbnb is hotels/lodging, uber is taxi, etc etc.

 

[Ryan Hartigan]

Well said.

There's a lot to consider behind the notion that if something was a true "need", it would already exist.

The majority of new products/services are repackaging of existing things, or providing them in a different way.

turo is car rentals. Airbnb is hotels/lodging, uber is taxi, etc etc.

You have to understand the industry better than anybody else understands it if you want to really deliver a product or service that the industry needs but nobody has delivered yet.

“If I had asked them what they wanted, they would have said faster horses”

 

[Mric1]

You have to understand the industry better than anybody else understands it if you want to really deliver a product or service that the industry needs but nobody has delivered yet.

“If I had asked them what they wanted, they would have said faster horses”

The most striking example of such a solution is Google Lens. That is, there is already such a solution on the market, and people use it every day, including for cars. And the industry, among other things, buys such traffic through vehicle ads in Google search results. No wonder it was built into the first search screen next to the magnifying glass. And every day this tool is becoming more popular.

But I completely agree with the message. If there are no such offers on the market, then there is no such demand.

 

[ASuave]

You have to understand the industry better than anybody else understands it if you want to really deliver a product or service that the industry needs but nobody has delivered yet.

“If I had asked them what they wanted, they would have said faster horses”

I dont mean necessarily new product or revolutionary upgrades, as much as I just mean "new for the sake of new", which I think the originator of this thread is moving towards.

I know many vendors who complain about dealer photos. I think spincar creates great photos yet I see many still not using it (or any solution at all) and continuing to put up crap phone photos, bad angles, poor lighting, cars not even clean etc. but cars still sell without it.

the short answer there is that photos arent the end all be all stopping sales in majority of cases, so a service that you have to pay significantly more for, with minimal ROI (on photos), doesnt yet solve a real need.

I think his "AI" solution-integrated marketplace is likely going to fall in the same boat. The market doesnt express a need for yet another 3rd party listing site, after cargurus, carfax, edmunds, cars.com, autotrader, etc etc.
So far he himself cannot explain what the unique proposition is, or the value (to dealers or to shoppers), which means that its likely not of value to most.

 

[Dealersolutions]

Dealerships for the most part recognize an online presence can massively improve exposure, visibility and brand awareness. Not to mention, an extensive online presence can progressively reduce the cost to acquire a customer.

There are dealerships who are anti-Internet. But they are far and few and because of this aversion to online opportunities, they'll simply lack the ability to keep up with a dealership sporting a full fledged online presence.

The question was how much does it cost to aquire a buying customer?

There really isn't a clear cut answer. It depends on what digital marketing and advertising strategies the dealership is implementing. Are you running paid ads or using organic listings? Are you using a hybrid strategy whereby you're implementing both paid ads and unpaid listings?

Have you established a presence on all of the social media platforms relevant to your buyers and do you maintain an active presence?

The more extensive your online presence is, the easier it will be for buyers to organically locate your dealership and inventory.

Many dealerships on average are active on 2-3 of the most popular social platforms. And in many instances, they don't have a rigorous plan in place for maintaining an active presence.

There's a wide range of social media platforms that are especially impactful in terms of the traffic and lead generation opportunities they offer. These are the lowest hanging fruit which have zero financial costs to setup and maintain. And a staggering amount of dealerships aren't even accessing these selling environments to boost their marketing and sales performance.

 

[joe.pistell]

I'd be happy to walk you through how we can help your dealership unlock tremendous growth opportunities by capitalizing on digital selling environments.

Bill. Sharing is caring. This is DealerRefresh. C'mon, SHARE some best practices.

"...I'd be happy to SHOW YOU THREE WAYS how we help dealerships unlock tremendous growth opportunities..."

 

[Dealersolutions]

Joe, if you reach out to me on my direct line (6507694790) so long as I'm available, I will take a few minutes to walk you through what is and is not currently working for dealerships. That said, my original comment details a broad overview of how to go about powering a solid sales performance in this digital economy. I could expand on the nuts and bolts, but it's really the mindset that wins the day. Patience and consistency is the key to a successful online presence. No silver bullets required. (Setting KPIs is a one of the most important best practices. Because if you can't define success, you don't know what to measure) Many dealerships understand that success in any shape or form is not an overnight happening. It's a process. Yet I've seen time and time again dealerships expecting immediate results. Or they experience shiny object syndrome. They jump from fad to fad instead of sticking with a plan on a long enough timeline to allow consistency to do its job.