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Adwords, Discounts, and ROI..Oh My!

May 5, 2010 5 comments
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I recently had the good fortune to field questions for a power sports industry article, helping dealers to navigate the shark-infested online waters.  The article questions focus on Search Engine Marketing, SEO spending, and justifying online discounting practices, among other things. Since these topics are perfectly relevant for businesses outside of the power sports industry,  I wanted to be sure to share the wealth!

Read on, and as always please feel free to contribute in the comments!


Is Google/Yahoo “Ad-words” spending recommended?

Spending on an “ad-word” campaign, otherwise known as Search Engine Marketing, is essential to help drive new, qualified traffic to a dealer’s website.  The most comprehensive campaigns go beyond Google or Yahoo and incorporate virtually any search engine a prospect might use.  We also strongly suggest using a program that allows tracking the phone traffic generated as part of the SEM campaign since these most often represent new and used unit leads.  A real-time ROI dashboard which incorporates all of this information allows a dealer to understand how his campaign dollars are being spent, and determine the best way(s) to allocate future investments.


How often is it recommended to change the look of a website, to keep it ‘fresh’ in the visitor’s eye?

A website should be managed very similar to a brick-and-mortar retail location, where inventory displays and specials are updated on a consistent basis.  The minimum update timeframe we recommend for a website is once a week.  In addition to maintaining interest in your site for returning customers, this has a beneficial impact on your ranking in the search engines.  Seasonal tips and related product promotions represent great content that can be rotated on a dealer’s homepage to keep the content up to date and encourages customers to revisit the site often.

Another approach that many successful on-line sellers use is setting up a daily blog.  This provides relevant content and industry news that can attract visitors and search engines which can be directed to your website. There are a number of great, free blogging platforms that can be used for this purpose such as Blogger and WordPress.  Blogs are one of the best ways to build a relationship with your customers, as well as obtain new traffic.


If you’re selling online, how do you justify the discount structure of your online store vs. your brick and mortar store prices?

There are many supporting quantitative considerations that make online discounting reasonable in many dealers’ minds.

Visitors to a brick and mortar store are provided valuable in-store support from industry experts.  In addition to the product a customer purchases, they are provided assistance with parts lookup, fitment advice, installation guidance, among other things.  This valuable service is a unique benefit that in-store customers receive that is not readily available through the website (although some progressive dealers attempt to do the same thing with expanded website content).  Since this is not a primary cost of business incurred in selling products online, products may be offered to online customers at a lower price.  A further justification for a lower online price is to help off-set the shipping costs that online customers must incur.

Many of our dealers have found that one of the best ways to reconcile these two different pricing strategies is to roll the lower cost to serve customers into a free shipping offer for online visitors.  This helps to even the playing field when a customer is split between purchasing online or in-store.  Since online customers must endure the additional cost of shipping, it is often critical to a dealer’s e-commerce success to ensure a promotional structure is in place to off-set the additional expense.

An additional quantitative consideration that may enable a dealership to justify online discounting is the cost of carrying inventory on a showroom floor.  Within a brick and mortar store, there is a finite amount of customer-facing space that can be allocated which must be further subdivided between service, new and used units, and garment and accessories.  This constrains the amount of product that can be marketed towards customers at a given time while also costing a dealer to carry the inventory.  Selling online does not suffer from this limitation, which makes it much easier to present thousands of product to customers without making costly product display trade-offs.  Furthermore, if a dealer has quick access to product shipments they can potentially avoid inventory carrying costs altogether for certain products sold online.  This further reduction in the cost to serve an online customer may help further justify online discounting.


How do you decide what SEO to use and how much to spend on it?

First and foremost, the underlying website structure should be designed with SEO in mind.  It is important to be sure that your website framework helps the search engine spiders discover all of your e-commerce content.  Since these items are often produced dynamically from a massive database, SEO considerations for these items should be built into the website framework from the start.  This will help to ensure that the website performs SEO at an acceptable baseline level.

SEO spending should ideally be equal to the amount of SEM for a given website.  While SEM produces immediate traffic returns, it does not offer ongoing returns after a campaign has been exhausted.  SEO does not provide results as quickly, but has long-term benefits that continue to be realized after the investment.  While there are many outside contractors and firms that provide SEO services, it may also be wise to consider operating your SEO strategy in-house.  Industry knowledge is an important consideration in SEO that an internal employee can bring to bear that contractors may not be able to match.  Additionally, SEO is an ongoing endeavor that should be managed at least weekly for the best results.  Simply setting certain SEO strategies in place for a year at a time will not be sufficient to keep a dealership up in the rankings.

Beyond website framework optimization, there are some general best-practices that any dealer can utilize to help increase their ranking.  One of the most important and easiest areas to optimize a website is the meta tags for each page.  The meta title and meta descriptions are the most important since they are what are most often displayed in the search engine results.  Meta keywords should also be included as a best practice, but most search engines do not place much emphasis on these due to frequent usage abuse.

One very important, but often neglected piece of SEO is link building.  In addition to a great domain name, lots of content, and impactful meta tags, links from other websites that are highly ranked are one of the best ways to increase both your traffic and standing in the search results.  One of the best places to start is getting your website listed on the manufacturer sites for the products you carry.  Also consider contributing on some enthusiast forums where you can engage with potential customers and provide links to relevant products.  Beyond careful content management, SEO ultimately comes down to a popularity contest.  The more prominent websites that link to yours, the more prominent your site will become.  The visitor traffic and sales will increase from there.

What percentage of a site’s homepage should be de dedicated to each dept./profit center?

Homepage allocation should reflect the goals of the on-line store.  Some dealerships place more emphasis on selling units and service than accessories, while others are almost entirely dedicated to PG & A sales.  The homepage content strategy should reflect the unique approach of each dealership.  As a general rule, we suggest allocating approximately 60% of the homepage to PG & A since those items are available for sale through the website cart and are usually the primary revenue source of a dealer website.  Half of that space should be allocated to OEM part promotions while the other half is allocated for aftermarket parts, garment, and accessories.  The remaining 40% of the homepage should be dedicated to new and used unit promotions, as well as the dealership’s service capabilities/promotions to encourage store visits.

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