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June 2011
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14
Dealer Marketing Magazine
June 2011
Alex Rodrigues
M
obile mania is officially here. It is not the future, it is now. And
it’s going to dominate how dealerships interact and market to
their customers.
Already, 93 percent of the U.S. population has a mobile device, and
40 percent have smartphones or mobile web devices. At some point
in 2013, more people will access the internet using a mobile device
than they will with a PC. In 2010 alone, mobile web browsing
jumped 32 percent while there was a 90 percent increase in mobile
app users.
Mobile Commerce
The kicker is that people are using their mobile devices to conduct
business—researching and shopping for products, even buying
and selling products. Clearly, people are becoming more comfortable using their smartphones for various activities. People spend
what amounts to 125 years every day playing the popular game
Angry Birds. On eBay, a mobile transaction occurs every second;
and recently, 72,000 burgers were sold in 72 hours via a Groupon
coupon.
According to a recent study conducted by Ipsos OTX on behalf
of Google, 78 percent of smartphone owners use their phones for
shopping. “It’s happening faster than all of our internal projections,”
Google Chairman Eric Schmidt told attendees at the Interactive
Advertisers Bureau Leadership Conference in April of this year.
“There are more than 200 million YouTube videos played on mobile
devices daily,” he notes.
The study for Google is hardly the only example. Even, investment
firm Morgan Stanley estimates more than $119 billion in commerce
will be conducted over mobile devices by 2015.
Automotive Mobile Opportunity
Numerous studies indicate much of that commerce will happen in
automotive. A recent study by mobile ad platform GreyStripe shows
that 78 percent of the people planning to buy a vehicle in the next 12
months will use some sort of touch smart web device (iPhone, iPod
Touch, Android) during the purchase process.
“Industry studies show approximately 17 percent of the U.S.
mobile audience are ‘auto-intenders’—people who will buy a new
car over the next six months,” says Sean Wolfington, owner of
www.Tier10Marketing.com. “With 20 million auto-intenders in the
mobile universe and one of three of them using a mobile device at
some point during their vehicle search process, car dealers need to
capture this market.”
Cars.com, which developed a mobile application four years
ago, gets 18 percent of its traffic today from mobile devices.
AutoTrader.com, meanwhile, is getting nearly a million hits a
month with its mobile application. Traffic patterns indicate mobile
users were most interested in finding vehicles for sale and locating a
dealer, versus some of the more in-depth auto reviews and “research
June 2011
Dealer Marketing Magazine
and compare” functionality. Like Cars.com,
much of the traffic occurs on the weekends.
According to the GreyStripe study, 48
percent of the people who say they will
use a mobile web-enabled device in their
vehicle search will conduct initial research
into vehicles; 44 percent will compare
prices of different dealerships while on the
lot; 32 percent will find a dealership using
their mobile device; and 23 percent will
actually use their mobile device to contact
solution providers in the industry today
are
CarFactor.com,
GroupCars.com,
IntellaCar.com, and DealerAppVantage.com.
Using Mobile Solutions to Attract
Consumers
Some mobile apps help customers shop
and are used by dealers to attract more
leads and sales. Two popular apps that help
customers in the car shopping process are
Car Factor (www.Car-Factor.com) and
15
million Costco, AAA, and Navy Federal
Credit Union members who bought more
than 300,000 vehicles from 2,300 participating franchise dealers last year, more than
any retailer in the world. Our auto buying
programs offer attractive, pre-arranged
pricing and deliver in-market purchasers
with a 45 percent closing rate within 72
hours of first meeting with our exclusive,
local participating dealer. “We believe that
GroupCars.com’s patented mobile pricing
By the Numbers
Mobile’s Growth
Mobile & Automotive Buyers
93%
of U.S. population owns at least one
mobile phone (U.S. population -307 million) 1
40%
of U.S. population use a smartphone,
mobile Internet device or mobile-web2
enabled phone
78%
of smartphone owners use their phone
for shopping 3
68%
of smartphone owners use apps
90%
of all web searches conducted on
3
smartphones result in an action
24%
recommend a brand or product as a
3
result of a smartphone search
3
Sources: 1. CTIA 2. ComScore/analyst reports 3. Ipsos Study (end of 2010)
78%
of people looking to buy a vehicle in
the next 12 months will use a touch
smartphone (iPhone, iPod Touch,
Android) in the process
48%
will use mobile for initial research
44%
will compare prices of different
dealerships while on the lot
32%
will use mobile to find dealerships
23%
will use mobile to contact dealers/sellers
Source: GreyStripe Study: Mobile Auto Insights April 2011
Infograph created by:
Content is copyrighted material of Tier 10 Marketing. © 2011 Tier10 Marketing. All rights reserved.
a dealership.
Importance of Apps
It’s not going to be enough for a dealer to
have the mobile website or texting capabilities. Much of the interaction is going
to come in the form of apps—compact
software downloaded to the smartphone
that performs specific tasks and is easy to
use. There was a 90 percent increase in app
usage in 2010 and that number is only going
higher. As of the fourth quarter 2010, 68
percent of smartphone owners used apps.
The question for car dealers is: How will
they leverage mobile technology to market
to and maintain relationships with their
customers? At this early stage there are a
few automotive mobile solutions providers
who help manufacturers and retailers use
mobile to attract, sell, and retain more
customers for less cost than traditional or
internet marketing. The leading mobile
GroupCars.com
(www.GroupCars.com).
As of April, Car Factor was the No. 1 most
downloaded automotive app in the world.
It has a four-star user rating, the highest
consumer rating of any automotive app in
the App Store.
Using Car Factor, consumers can build and
compare vehicles, view vehicle reviews,
and obtain pricing. Another app, newly
patented, GroupCars.com, gives consumers
the ability to scan the bar code on a vehicle’s
MSRP sticker and get an instant guaranteed
low price on every vehicle in the dealer’s
inventory.
“Dealers can advertise that they can provide
Instant Guaranteed Low Price quotes in 60
seconds or less,” says Chad Collier, CEO of
GroupCars.com. GroupCars.com has partnered with Affinity Development Group,
Inc. (www.aagautogroup.com), which
operates auto buying programs for 50+
app can significantly shorten the time it takes
our members to drive off with their new car,”
says Jeff Skeen, Affinity’s CEO. “We are
working with Affinity to build an exclusive
national dealer network of 3,500+ participating franchise dealers for GroupCars.
com’s customers to be able to instantly see
GroupCars.com’s Guaranteed Low Price
while standing in front of the exact car they
want to buy,” states Chad Collier.
Using Mobile Solutions to Serve and Sell
Consumers
One observation regarding the growth of
smart mobile devices is that customers have
greater access to information and often are
more informed about the vehicle than even
the dealership salesperson is. So, IntellaCar
is putting a different spin on mobile apps
creating one that is for dealership usage.
It has developed an app for the iPad and
other mobile devices that help salespeople
promote the dealership, vehicles, finance,
16
Marketing Magazine
MobileDealer
Commerce
is NOW
accessories, and service. “Since most
Mobile Commerce is NOW
customers research online before
visiting a dealership, they often
know more than most salespeople
M-COMMERCE
about the vehicle they are considering, and this knowledge gap can
hurt a salesperson’s credibility,” says
by
Jim Hughes, cofounder of IntellaCar.
IntellaCar’s app helps salespeople
quickly access product benefits
that are tailored to the customers’
hot buttons (safety, performance,
years of
comfort, convenience, etc.), walkANGRY BIRDS
around videos, pictures, videos about
is played every day
the dealership, certified programs,
leasing, finance products, and accessories, along with introducing the
On
EVERY
customer to the service department.
SEC
on
“When used properly in the sales
MOBILE
SALE
process, these showroom apps help
IS MADE
salespeople increase their closing
ratios, average gross profits and CSI,
because they can answer questions
BURGERS
quickly while also building value in
are sold in
the dealership and the products they
Mobile Commerce
is NOW
72 hours
sell,” says Bruce Polkes, Hughes’
via
mobile coupons
partner at IntellaCar.
M-COMMERCE
Sales consultants typically see
Infograph created by:
an impact in the first week using
IntellaCar, with results such as
by
EVERY
selling two to four more vehicles
each per month while generating up
to 30 percent higher gross and 47
percent higher CSI.
MOBILE
Dealers are also giving service
years of
customers access to these apps on
ANGRY BIRDS
iPads in the service lounge where
is played every day
they can view videos about additional services like car detailing,
On
EVERY
dent removal, and even new and used
SEC
vehicle specials.
on
MOBILE
SALE
Using Mobile Solutions to Retain
IS MADE
and Resell Consumers
Just in the last year, hundreds of
dealers have started providing free
BURGERS
are sold in
apps to their customers following
72 hours
the purchase or service of a vehicle.
via
mobile
coupons
via
mobile coupons
One such dealer app, created
by DealerAppVantage.com, lets
Infograph created by:
customers view their owner’s manual,
schedule appointments, buy accessories, get roadside assistance, find their
“The
most popular
tool
on the
DealerAppVantage’s
app is
vehicle in
a crowded
parkingmaterial
lot, findof Tier
Content
is copyrighted
10 Marketing.
© 2011
Tier10
Marketing.
All rights reserved.
a cheaper gas station, report an acci- the ability to find gas stations that are less expensive,” says
dent, receive alerts when the parking Ed Louis, co-founder of the company. “Customers can save
meter expires or when their kids are hundreds of dollars by using the Cheap Gas station finder to
save money on gas,” he says.
going beyond the speed limit.
Enterprising dealers are finding the “Customers love to use the app to make service appointapp helps to improve the customer ments and view specials,” says Mike Adler of Laurel BMW,
ownership experience, satisfaction, an AutoNation store. “Customers aren’t typing the dealer’s
and loyalty by delivering service URL into the mobile browser anymore because it is a lot
reminders, recall notices, lease-end easier to use the app to get there.”
tutorials, equity alerts, and specials Dealerships are finding it a lot easier to give the customer a
that bring the customer in more often free app that they can use on their mobile phone than it was
for service, repeat sales, and referrals. trying to obtain email addresses a few years ago. The good
$ M-COMMERCE
$119 bn
2015
$ $119 bn
by 2015
125
125
1
years of
ANGRY BIRDS
72,000
is played every day
$ $119 bn
On
1
2015
125
SALE
SEC
on
IS MADE
1 BURGERS
72,000
are sold in
72,000 72 hours
June 2011
news is that their phone is always with
them and the read rates of messages
delivered to the phone are dramatically higher than through email.
“Our dealers post signs all over the
dealership promoting the app in sales
and service,” says Louis. “Dealers
download the app onto customers’
phones as they wait for the finance
department and in service while
they wait for their car. Many dealers
also promote it to people who visit
the dealership but aren’t ready to
purchase by showing them how it can
help them in the shopping process.”
“Our dealership’s mobile app is
advertised on all of our newspaper
ads, in our service department and
it’s a great selling point for salespeople in the showroom. The app has
generated a big increase in website,
Facebook, and showroom traffic,”
Adler adds.
Get On Board Now
The time to put a mobile strategy in
place is now. “The rate of adoption
for dealers leveraging mobile solutions seems to be much faster than
it was for the internet,” Wolfington,
of Tier10Marketing.com, explains.
“A lot of dealers took a ‘wait and
see’ posture when the internet first
arrived, but it seems like they are
reacting faster this time around.”
Dealers are learning that mobile is a
cost effective way to stay in front of
the customer. “We get a lot of leads
from our app for a fraction of the
cost of internet leads,” says Brian
Benstock, co-owner of Paragon
Honda and Acura, the top selling
Honda and Acura dealer.
Dealers that get it and understand
technology are going to be the businesses consumers want to interact
with. It’s time to get ready with a
clear mobile strategy that integrates
into existing marketing plans.
Content is copyrighted material of Tier 10 Marketing. © 2011 Tier10 Marketing. All rights reserved.
AlexInfograph
Rodrigues is
the managing
director
created
by:
of iris Miami. iris is an independent, global
creative agency that delivers marketing
campaigns for clients like Adidas, Sony
Ericsson, Shell, Sony, Coca-Cola and Diageo.
Over the past 11 years, iris has diversified to
offer specialism in all disciplines, from management consultancy, CRM, direct and digital to
advertising, PR, experiential, retail, and sponsorship. It is the blend of these skills that allows the
agency to deliver Extraordinary Ideas—solutions
that provide competitive cut through by being
interesting, valuable, and part of popular culture.
Launched in London in 1999, iris is one of the
fastest growing micro-networks in the world and
today has around 700 employees working across
15 offices.