How Dealerships are Taking Market Share as Inventory Returns

Factories are shipping new cars at the highest rate in 24 months, and dealers that stayed invested in marketing are reaping the benefits.

Imagine being a dealer that struggled to get inventory but now… Now you’re outselling the competitors month after month.

That’s exactly what’s happening with many of the dealers we work with, but ESPECIALLY with the four dealerships below.

What do the dealerships below have in common?

  1. Macdonald Motors, a CDJR dealership in rural Maine.
  2. Hiley Buick GMC, a GMC dealership in the metro Dallas Fort Worth market.
  3. Sour Lake Ford, a dealership in rural Texas.
  4. Destination Harley Tacoma, a Harley Dealership located in Tacoma Washington.

Like most dealers, each of them have been struggling with low inventory for the last year plus.

Sound familiar?

As an advertiser – we’re faced with the question and “impossible task”…

How can we increase market share for those clients, sell as many available units on their lot as we can, and do so cost effectively to decrease their cost per car sold as much as possible?

And yet – with shrinking inventories, we closely followed in-market demand.

Now, with inventory starting to improve, our dealers are capitalizing and increased each of their respective market shares, resulting in a lower cost per car sold.

Sure, I know you’re a skeptic… but the real “secret” is that we did one thing that 90% of other advertising agencies aren’t doing when they run Facebook ads.

Mainly because this one thing adds a hell of a lot more work on the front end, but pays dividends on the back end.

Before we continue, I know you might be thinking… “Wait, there’s a lot of other agencies out there that also run Facebook and Google ads…

How could you possibly be doing something that much differently than other agencies?”

Well – if you really think all agencies are the same, then I challenge you to eat a steak cooked by me, and legendary chef Gordon Ramsay, and tell me the outcome will be the same….

Here’s Part of our “Special Sauce”

This comes down to a fundamental difference of how these dealerships optimize the ads their dealership is running.

Since 2017,  we have spent and managed over $25 million in digital advertising for dealerships.

We’ve tested over 20,000 unique adsets, creative, offers, objectives, you name it.

We helped a Toyota dealership give away a car and go viral because of it. Hell, we helped them give away 5 of them.

It ended up getting us fired as an agency… but we tested and failed at that strategy so we didn’t have to ask any other dealers to try that again.

With all of that testing – we’ve foud one strategy to be the most consistent and successful.

Conversion-based ads that optimize for Lead are superior to any other optimization method.

Here’s whyconversion campaigns optimizing for Lead are a secret weapon.

Shockingly… More than 90% of dealerships are NOT using this strategy on their ads.

Conversion-based ads that optimize for Lead harness Facebook’s machine learning AI to find users who are actually showing intent, and are likely to become leads on your site and buy a car.

And Facebook knows a lot about you and your potential customers.

These platforms measure every user, every day. With over 17,000 data points – they know where you are located, the websites you are visiting, and much more. 

If someone in your market is going to your competitor’s website or ramtrucks.com and looking at a Ram 1500 Facebook will send that information back to our targeting via the Facebook pixel on competitor’s websites.

We then target those same people who are in-market who are also likely to become leads on your site for a Ram 1500.

(They are able to do so because they share audience information with other advertisers via a first party cookie).

Other agencies don’t optimize for a conversion like Lead and instead optimize for traffic, or cost per click. 

This is where the fundamental difference lies.

The Facebook algorithm shows ads to people who are likely to click on them, NOT to become a lead once they click on them. 

Algorithmically speaking, they are two completely different types of audiences.

Why You Should Care

Since we optimize ads for the Lead objective from the very beginning, we capture higher intent audiences in market who are likely to become leads on your site, not to just become click metrics to your site. 

Correct. We don’t focus on traffic, or clicks – we only focus on ad sets that are actually generating leads. 

Clicks and traffic are vanity metrics – they mean nothing if they’re not becoming leads. 

How many agencies are willing to say that? 

Optimizing ads for leads is the best way to get more leads on your site. 

When the leads ARE on, you need to know what ads are driving that lead volume.

That’s really where our team comes in in 2 unique ways: 

1. Monthly Optimization

The only thing we care about when it comes to mid-month optimization, is cost per lead, per adset. 

We take an equal-opportunity vehicle approach – meaning there is zero bias when it comes to which models we promote, or which ones we want to succeed. 

We simply go where the leads are, and where the market is telling us the demand is going

Take this dealership for example, since starting ads – we know these new models below have the highest demand. 

Whereas these models haven’t gotten a single lead since we started running ads. 

Over time, our dealership budgets are optimized to capture the demand around the vehicles the market actually wants.

As inventory returns, this approach allows us to test the models a dealership has in inventory and understand what the market ACTUALLY wants.  

Now, our dealers are outselling their competitors month after month. 

2. End of Month Optimization

We also set up an offline event set with all new ad accounts. 

This tells Facebook to store data on every person who’s seen or clicked on your ads even if they didn’t become a lead from your ad. 

At the end of the month, we upload CRM sales data, and Facebook matches up the information in your sales report (email address, name, phone number) to the database of people that Facebook stored who saw or clicked on your ad. 

Facebook then tells us how many of those sales saw or clicked on our ad and then bought from the dealership. 

This allows us to evaluate the relationship between cost per lead, and sales trends on those exact models. 

Offline events give a very different picture from what cost per lead tells us.

Over time, our strategy blends intra-month cost per lead, and sales trends, leading to an even better understanding of demand in the market place in order to move inventory faster, for less.  

Why Dealers Aren’t Optimizing For Lead

Over time, we’ve tested, measured, and tested again all variations of copy, offers, emojis, frames, and other creative elements. 

None of them ever improved ROI, or cost per lead compared to the current fundamental structure explained above. 

We’ve learned that all customers tend to be a LOT more motivated to click on a specific vehicle/ad based on the model, color, trim, pricing, and the timing of that buyer in their decision making process. 

So then why are 9 in 10 dealerships not optimizing their ads incorrectly? 

Put simply, it’s harder and it takes way more work. 

In order to effectively run this optimization technique, a dealership needs to obsess over ensuring their conversion points are seamless. 

Dealership websites are notorious for confusing customers and adding friction around conversion points, instead of making them simple. 

To combat this, our team ensures that their dealerships follow our proprietary Conversion Rate Optimization best practices to make their website user experience superior to the average dealership.

These best practices are a huge reason the dealerships listed in this blog have been able to maximize their marketing efforts.

In Conclusion

“But every dealership is doing Facebook and Google…” 

…and if you still think that Steak from me tastes the same as Gordon Ramsay’s…. When I can barely boil water…. Then you’re absolutely nuts and I wouldn’t want to work with you either, lol…

Unlike our dealers above, most dealerships have a fundamental problem with how their ads are being optimized, and the objective they or their agency is using,  when the campaign is built in the first place.

Many dealers aren’t even aware of it!

Your dealership can harness Facebook’s algorithm to find & capture in market audiences who are likely to become leads on your site. 

OR your dealership can harness the same technology to show ads to people who are likely to click on your ads and NOT to become a lead once they click on them. 

The choice is yours. 

As inventory returns, the dealerships that focus on the correct fundamentals will continue to take market share from those that don’t. 

This strategy proved to be successful dealership after dealership, and it’s even proven itself in the Harley business as Destination Harley of Tacoma has started to take market share once implementing the strategy. 

So… How exactly are your campaigns being optimized? 

To find out, click below to schedule a free strategy call and we’ll tell you – free of charge.