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Five Point Plan on How to Grow Local Automotive....Guaranteed!

By J. Lescano, Senior Consultant

Today's competitive advertising culture can make it challenging for newspapers to grow any category.  Here we are going to focus on helping you gain market share in the automotive segment which according to Nielsen's 2008 Ad Spend Monitor Plus Report details the automotive category easily dominating advertising spending. In addition, the Original Equipment Manufacturers (OEM's) like GM, Ford, etc. top the list, with local dealerships coming in third. National and local automotive advertising spending combined account for $1 out of every $3 dollars spent as it relates to the top ten categories on the list. (See list below)

Due to the magnitude of the spending for automotive advertising the newspaper industry must ask why market share is moving away to other mediums and devise a plan to recapture what has been lost. Here we have prepared a simple 5 part plan we're calling..." How to Grow Local Automotive....Guaranteed".  

Nielsen Monitor-Plus 2008

Rank Category Q1 2008 Spend ($Mil)
1 Automotive - OEM's $2,695.80
2 Pharmaceutical $1,311.70
3 Auto Dealerships - Local $1,113.70
4 Restaurants-Take Out, Delivery $1,028.30
5 Telephone Services-Wireless $971.90
6 Motion Pictures $957.30
7 Department Stores $717.40
8 Direct Response Products $670.20
9 Credit Card Services $473.00
10 Financial-Investment Services $455.00

Source: Nielsen Monitor-Plus 2008

Following the plan's chronology will help your newspaper uncover and deal with current obstacles (i.e., products, people, etc.) and give insight into how to maintain and grow such a valuable ad category.

Point One: Survey the Opportunity 

One of the first things an ad manager should do when planning a new initiative is to "Survey theOpportunity" of the initiative.  This will help the manager conclude if it is worth the time or sales man-hours. 

Given the value of the category it's important to first ascertain the revenue potential of your market.  Most managers planning initiatives will become preoccupied with the market potential based on what they believe the newspaper can close. 

That's called budgeting...and should not be confused with determining what the market potential is.

Point Two: Plan

Suite of Products should be Simple to Sell, Easy to Track and Manage

This is the foundation of a successful automotive ad growth strategy. 

Recently, I had the privilege to evaluate a client's automotive rate card.  Despite many different efforts over a period of time to grow the category, the outcome was coming up short of management’s expectations.  I downloaded the full rate card (including retail and other products) and after days of reviewing the multitude of products, an endless rate scheme based on frequency, and a host of ala carte items, the end result of my evaluation was it was way too confusing.  Knowing that the sales staff was challenged in growing the category, I immediately knew the product mix was most likely responsible for 50% of the problem.  Most newspapers have so many products that the average sales rep simply can not remember them all too efficiently mention in a sales conversation.  I call this the "confusion factor".  

As their consultant, I struggled with how to inform my client that I found their rates and automotive product offerings too confusing without giving the impression that I just took the past of least resistance and gave up. 

Ironically, in the same market was an automotive rack distributed competitor that the client mentioned having three times the auto revenue of the newspaper.  I Google'd the product and was able to see their rates and product offerings. I quickly found the competitor focused exclusively on selling a print and online product bundle.  Since the bundle was all they offered, I could see how they were able to keep the sales process simple and efficient, easy to track against the perceived market opportunity, and their planned budget.  No rocket science here to determine why the competitor was winning.

Although I do not advocate doing away with offering auto dealers products like direct mail and preprinted insert products, my recommendation is the auto staff should focus on selling a core product offering, Leave secondary and other products to reps that are focused on those products. 

Arrived at Solution:  

Dealers buy print, online, direct mail, preprinted inserts and periodically anything else a sales manager can think up.  Dealers are known for trying everything that sounds like it has a chance of helping them drive traffic to their inventory and showrooms. However, to maximize the category,  the newspaper manager must choose a small number of simple, but effective core products that your auto staff can master and sell.  Most newspapers have so many products that the average sales rep simply can not remember them all too efficiently mention in a sales conversation.  

For the client I mentioned above, we came up with four package variations of print liners (to merchandise the used car inventory), display ads, (which featured new car inventives and financing specials) and online (for both the entire inventory and display ads online) which all had a call tracking capability.  Essentially, when a sales presentation was concluded, the sales rep had two choices to consider.  1) Close the dealer on the core product offering or 2) realize they had nothing else to sell him...so (see choice #1).  The result has been that the revenue is headed in the right direction, morale is higher, and the bundled packages total keeps growing in dealer count.

Point Three: Make the Sales Calls

Knowing the opportunities and having a planned core bundle offering that is simple to sell, the next step is to make the sales calls.

Most newspaper ad managers will plan to have a sales blitz when launching a new initiative.  If you think about why "The Sales Blitz" works it's mainly due to two things.

First, the sales staff is focused, and second, so is management.

To grow automotive consistently, this has to be the culture everyday.  Once points one and two are completed, this consistent heightened focus should be easier to obtain.  Let’s take a look at the example below: 

Surveyed Opportunity of Dealers in Market   30
     
Budgeted Dealers   18
     
Newspaper Goal   60% Share
     
Reps Focused on Selling Automotive   1
     
Average Revenue of Core Packages   $800 per month
     
Revenue Cycle   Monthly Basis
     
Calls per Rep   1 face to face Sales Call every other day

Assuming the initial sales blitz would be open to all sales reps, and afterwards the dedicated sales rep can then cycle through 18 dealers within a 2 month period.  The manager has a list of the 30 dealers in market and meets with the sales rep to discuss the calls they're making and can easily gauge if they are going to meet the required activity of a sales call every other day.  The pre-work of surveying the opportunity assists management in making automotive a category that is easy to track for success in terms of activity against opportunity.  Planning a simple suite of products or core bundle offering makes it easy for the sales rep to schedule calls, make presentations, and close sales.

There's not a lot of moving parts associated with executing the above plan to grow local automotive.

Point Four: Management Follow-Up & Follow Through

Most newspaper ad managers are spread thin these days due to the enormous competition for local ad budgets.  The bedrock of good ad sales management is to have an easy mechanism to follow up with responsible sales reps against their sales goals and follow through on directives.

A weekly one on one meeting with a rep to discuss their activity, successes, challenges, and their sales trends to budget does the trick.  If the ad manager has a solid core product bundle and the sales rep has a copy of the surveyed opportunity their responsible for, these meetings can be quick.  Reps should be able to meet the activity criteria if they are challenged this should signal the manager that additional coaching may be required. Being active enough to schedule a face to face every other day with a dealer is no huge task.  If the activity is not there, neither will the revenue or budget success.  Management must not fall short.  Not closing deals is a coaching opportunity.  Not making the sales calls is an effort issue.  As a sales manager I work with all my sales reps when they are not making sales.  I shadow them, lead the call to show other approaches to achieve success, and deploy solid fundamentals with features, advantages, customer benefits and never forget to ask for the order.  However, when a rep is not active enough to put them self in a position to be successful, it's difficult.

Management needs to be able to see the initiative on a course towards success, access if the planned activity criteria is being met, and quickly ascertain if changes need to be made.  Don't keep a sales rep assigned to a valuable category like automotive if they can't or won't make the sales calls.

Point Five: Rep Follow-Up

Once a rep cycles through the surveyed opportunity list the following up never ends. 

I can recall being on a sales call when an employee of the dealership walked into the General Manager's office and reminds the GM of an 11:30am appointment with a person waiting outside in the lobby.

The GM stated he did remember and then turned to me and said, "every week or so, this person comes in to sell their product to me.  I have to meet with them or they will just keep coming back.  You have to give them credit for being persistent".

Not all reps are engineered to be persistent.  However success is only achieved by those willing to put in the effort, be persistent, and keep moving forward with their plan even in the face of adversity.  Keep coming back and eventually every dealer will meet with you.