As global economic conditions and customer behaviour shifts due to Covid-19, Owners, Sales Managers and Marketing departments in the Automotive sector must focus on budget optimisation and smart advertising investments across their marketing mix. Carsnip… read more...
As global economic conditions and customer behaviour shifts due to Covid-19, Owners, Sales Managers and Marketing departments in the Automotive sector must focus on budget optimisation and smart advertising investments across their marketing mix.
Carsnip have been keeping a close eye on industry research in order to offer support and guidance to dealers in anticipation of budget challenges. But it’s important to remember that only 8% of consumers think brands should stop advertising. In this article you will find a working structure for how to prioritise, manage and optimize your marketing budgets.
Core challenges during Covid-19
Marketing functions commonly face challenges with annual budget cuts, and are consistently focused to deliver optimised and cost efficient strategies to meet both their business objectives, as well as their cost aspirations; it’s has always been a very fine line to walk.
Adhoc short term decisions rather than sustainable strategic reviews will mean you miss long term wins on your marketing plans.
Shorter term and more flexible strategies such as media spend are often the areas most affected by budget challenges, in a bid to optimise efforts. Recent research by Gartner suggests that execs who undergo short term cost cutting, instead of sustainable budget optimisation, miss opportunities for real savings in the long term.
Your action plan for success
We recommend considering the following four aspects of your marketing strategy:
- Plot your marketing spend
Create and continuously review your strategy for cost optimisation. Cost optimisation is not about cutting and cancelling all your platforms and channels; it’s about making strategic decisions to better improve your ROI. What can be resourced, consolidated or renegotiated?
Carsnip has renegotiated all traffic acquisition strategies with our clients. We have reduced all costs by 50% for our dealers, because whilst it’s important to save money during the crisis, it’s also important to still reach and be in front of our audience.
- Create sustainable budget efficiencies
This is really important; building reserves in both energy and money is vital to riding the economic storm. You need to look at long-term cost optimisation opportunities and make sure you are getting the most value for your money. At Carsnip we do this automatically for you. Similar to how Google Adwords works, Carsnip optimises the click bid that you pay for traffic. Make sure you have this bid strategy set across all your paid social and paid search accounts.
- Optimisation by design
Optimisation should be ingrained into the DNA of your marketing function. The questions should never be ‘can we live without that activity’, it should be ‘how can we maximise that activity to constantly improve ROI’. Review all your channels and cost structures at least once every 6 months.
Gartner’s Cost Optimization Matrix
This matrix will help you:
- Deliver quick wins and gain stakeholder buy-in through short-range variable cost optimisations
- Drive operational excellence through long-range variable cost optimisations
- Drive efficiencies through maximum utilisation of short-range fixed costs
- Build sustained savings via long-range fixed cost optimisations
Source: Gartner (March 2020)
As you plot your marketing activities on the matrix, you will start to see where you can achieve sustainable cost efficiencies. Those activities in your strategy which plot to the top right-hand quadrant are the areas you need to take most care of in your marketing mix.
Within your dealership there are many smaller steps that are short term in range, and lower cost, but which build into bigger more strategic gains.
Marginal gains enable you to develop a low cost progression to deliver more sustainable advantages.
Some marginal gains worth considering:
- Agency and platform re-negotiations and strategy reviews.
- Operations re-negotiations and consolidation
- Campaign activity integrations
- Analyse metrics KPIs and reporting infrastructure to improve digital visibility
- Technology innovations for communications (e.g. chatbots, live chat, online reservations)
Whilst the news is all very negative at the moment, and there are a large number of unknowns still at play, we see no reason not to be quietly positive, looking to the future of your business, and making the most of your time to improve and develop your infrastructure to give you a sustainable competitive advantage.
Check out our page containing some of the most asked questions and concerns at this time for dealers, as we try to dispel some of the myths and support you to keep a close eye on your business.
Carsnip is the UK’s largest used car search engine, with over 500,000 dealer sold used cars across the UK. We operate a natural language search engine, to help you find your perfect used car, and narrow down the choice by what’s most important to you.