Here are 6 things you can do to help you avoid getting burned by a digital agency:
#1 No research
The #1 reason why you have been burned is because of the lack of research. Being busy is not an excuse for not doing research. We are all busy. If we are making an investment and spending our hard-earned money then we have to take the time to do research and see what is out there.
There are way too many Dealership Owners and Salesmen that sign with Agencies that promise the world. For agencies, the #1 way to get a Dealership to agree to work with them is if they offer a profit-sharing agreement. For example this works where they guarantee X amount of leads per month and they get paid X amount on units sold.
This removes all the risk and the upside is high.
In some cases, this arrangement can work, however, the reason why most of these marketing people offer this arrangement is because they are desperate.
Do you think someone that has a track record of success should be working for free and relying on the salesman of the dealership to hold up their arrangement to get paid?
I don’t think so.
So if you are dealing with someone that wants to do profit sharing then be aware that they are likely beginners with no track record.
Now a caveat with this is with very large companies.
I have some friends in the digital space that work with very large dealerships that have this arrangement.
The reason why it works for them is that they have an entire system that tracks all the sales from the campaigns through a customer portal.
We also have added this offer but its after we evaluate your current performance with a 3 month trial.
#2 Not enough time
How much do you expect to happen after 2 weeks? How about after 30 days? 60 Days? When you commit to a marketing plan this means you have to commit to a marketing plan.
If you are investing 5% of your budget into marketing, this means you need to invest 5% the whole year, not some months off and some months on.
I’ve been doing marketing for years and one thing I can say for a fact is that unless you are consistent with your marketing your lead volume will go up and down.
Most of the time the drop-off has nothing to do with what you are doing. The drop-off can be attributed to factors outside of your control.
I mean who could have predicted Covid last year?
Right now we are dealing with the ramifications of the iOS update from Apple and the impact it has had on our Facebook campaigns.
Tomorrow it can be something different.
At the end of the day, the only thing that will prevent the drop off in leads is to consistently invest in lead channels that produce results.
#3 Dipping your toes in the water instead of going all-in (Investment)
Unfortunately, Dealerships have been conditioned to buy leads from third party sources notice how i'm not name dropping. This has prevented them from thinking long-term about how they can grow their business.
What most Dealers do is think transactionally.
What this means is that they are willing to invest a few thousand dollars one time to see how something works.
When in fact that this is completely the wrong strategy.
The single best way to be consistent with online lead generation is through paid media.
In order to get good results with paid media, you have to be willing to invest a significant amount of money to see the long-term benefits.
Investing a few thousand dollars into a campaign after 30 days is just not a good strategy.
It won’t make a significant impact on your business.
You are rolling the dice and praying that this works.
Sometimes the leads are great after 30 days, sometimes they are crap.
30 days is not enough time to do optimization to any campaign.
If you want to get real results then you have to jump with both feet in.
You have to make a real commitment even if it hurts.
I’ve made this commitment myself and I know how it feels.
I was over 25K in credit card debt paying thousands of dollars in interest alone each month while I was starting my company and funding our Facebook ads.
You have to commit and you have to invest, period.
You need to invest at least 5% of your gross revenue into digital marketing.
I rarely see companies do this.
So for example, if you are a 1M dollar company, 5% is $50,000.
How about if you want to grow your company?
Let me provide you with that example.
Let’s say you are doing 1M in revenue and want to get to 3M/year.
What this means is that you have to spend like you are a 3M company. What’s 5% of 3M?
150K
So in order to grow as a company to that 3M, you should be investing 5% into marketing.
Once your marketing is paying for itself then you will have the ability to scale fast as a Dealership.
#4 Agencies that don’t deliver
There are some people that won’t be able to deliver. Some of these are scam artists, others are good companies that didn't do a good enough job.
One to keep in mind is you have to make sure that the company is doing a good job or not by actually holding them accountable and communicating your expectations.
So how do you do that?
Well, you have to make sure that you get your deliverables in a timely manner and provide constant feedback on the campaigns.
There are so many instances in which we sign up a client and then they ghost us.
It’s dumb.
Why are you paying us all this money if you don’t want to talk to us?
I get you are busy and delegating this but at the end of the day it’s your responsibility as a business owner to make sure that your marketer is delivering for you.
It’s no one’s responsibility but your own.
#5 Hiring on price point instead of a track record
Honestly, do you expect someone to double the size of a business if you are paying them $12,000/year?
This is way less than the minimum wage. There are many large companies in this space including companies like Autosweet, WheelerDealer, and others that sell small packages to thousands of Dealerships.
For these companies, it’s a numbers game.
They sell you the dream on a beer budget.
Champagne taste with a beer budget as they say.
At the end of the day, you have to take responsibility for hiring this company.
Everything that happens in your business as the leader of your company is your fault.
Your employees and partners don’t care if the vendor does a good job or not.
They only care that you made a decision and the decision didn’t turn out well.
But here is the thing.
As CEOs of companies, you have to make decisions all the time without all the information you need.
It’s better to decide quickly and then quickly after moving you made a choice.
We all make mistakes but unless we learn from them then we will keep making the same mistakes.
#6 Not being ready
If you are not ready to handle inbound leads and don’t know how to turn internet leads into a sale then you should not invest in digital marketing.
Internet leads are not the highest quality.
Compared to walk ins or referrals, these leads are not going to be as good.
That doesn’t mean you won’t make a lot of money but these leads need more work to be done in order to get a sale.
Any mistake you make in the sale process and you are done.
This means that you didn’t pick up the phone when they called you, or you didn’t respond to a text message, or you didn’t follow up.
If you are not treating these leads as gold then you are throwing your money down the drain.
People want instant gratification and if you are not delivering on this then they will move on to someone else.
Speed to set the appointment.
Speed to deliver the estimate.
These are things you need to have in place in order to get good results with online marketing.
Conclusion
Business is an intellectual sport.
There is no school that teaches how to run a multi-million dollar business.
However, it takes self-awareness and the ability to learn from one’s mistakes in order to run a business.
It’s hard running a business.
This is why the failure rate is so high.
Digital marketing is one core strategy that you should not ignore as a business owner.
It’s easy to get results once you know what you are doing but it’s hard actually knowing how to do it.
If you do these 6 things before you hire a digital marketing agency it will prevent you from getting burned again!
