A common trait observed among various business owners is the tendency to undervalue marketing, often relegating it to a lesser priority or perceiving it merely as a cost, rather than recognizing its potent capability to generate leads and fuel business growth.
When I was new to the car business, I worked for one of the best car men to ever walk the earth. His name was Morrie Sage and he had a sixth-sense about retailing vehicles. His store, Universal City Nissan in Los Angeles was the #1 Nissan store for many years. He wasn’t a perfect person, no one is, but he was a magician when it came to operating a dealership.
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His General Manager at the time had found a closed Nissan dealership not far from UCN and they decided to buy it together. That’s how I came into the picture. I became a sponge and learned how Morrie would operate a store and carried those strategies and tactics throughout my career. We did a really good job there, too.
The store had been closed for a year and it was way off the beaten path in a sleepy little neighborhood in southern California. We had plans to move the store but property had to be located and a facility needed to be built, but when we opened, that part was not on our radar yet. I did however help with shampooing the carpets in order to get the store ready to open.
We soon were selling upwards of 150 cars per month, beating all expectations. Being in a quiet part of town (but close to freeways and centrally located), we were only successful because we spent HUGE on marketing and advertising.
At Universal City Nissan, Morrie regularly spent hundreds of thousands of dollars on marketing and advertising. When sales were trending down, due to temporary conditions or longer market turns, Morrie would INCREASE spending on marketing and advertising. This philosophy is what put the new dealership on the map and kept it there, continuing to sell and service cars in spite of our location.
Morrie’s philosophy is still relevant today.
How will people know about your awesome product or service if you don’t tell them about it?
People need to know about the value your products and services bring to their lives. Word of mouth is great but you can’t simply rely on that to grow. If you’re trying to become or remain competitive, you must leverage the power of marketing and advertising. In the car business, it’s a crucial part of your operation and developing a strategic marketing plan helps you get to your goal of selling cars faster.
Marketing has become so complex and with so many vendors telling you their solution is awesome, it’s difficult to navigate. But marketing and advertising are required because you can’t grow your company without it.
Here’s a hypothetical case study of what happens when you don’t have a plan and don’t do much marketing.
Company XYZ does no consistent marketing. In fact, their CEO doesn’t believe in it. They are in an extremely crowded field with formidable, highly successful legacy competitors. At least one of these competitors is extremely ruthless in their decades as a frontrunner. In fact, this specific competitor is known to simply purchase companies just to capture their client roster.
When Company XYZ was founded over ten years ago, they had a strong differentiator: it was a very good product that the market responded to because they weren’t like the legacy competitors. The product put more control in the hands of its clients for less cost. Sounds fantastic, right?
But in a crowded market with stiff competition, having a great product and/or service is only half the battle. If your market doesn’t know about you, you’ll suffer in anonymity – which is a disaster for your bottom line.
Company XYZ has not found the traction they crave due in part to their lack of belief in and subsequent avoidance of marketing.
Trying to grow your company without marketing is actually impeding their path to the very goal they wish to achieve.
The company is currently venture capital funded. Current management doesn’t possess the industry and product experience they’re selling and the plan is to sell it to a competitor. I’ve personally been involved in over 100 car dealership/group buy/sells. One could say I’m pretty familiar with how to build value with intent to sell.
If Company XYZ were marketing, they could not only enhance the company’s profile and build brand equity, but also of course, sell more. This would increase the company’s value and thereby bring a higher price should they ultimately decide to sell.
Marketing puts more control of the outcome in management’s hands, not leave it up to market conditions, trends or competitors.
If you’re trying to grow your company without marketing, consider the following common challenges and potential consequences.
Limited Brand Awareness
Company XYZ feels strongly about appearing on the exhibit floor at a conference. That is the only substantial form of marketing they do. With conference attendance down comparatively speaking, that’s not a great strategy. Will the attendees gain brand awareness? Possibly, as long as they walk the Exhibit Floor. But what about all the other potential clients that didn’t? And what about the vast amount of potential clients that aren’t at the event?
Reduced Competitive Edge
Company XYZ once had a fantastic differentiator: more control in customer’s hands at a lower cost. Without marketing, without alerting potential buyers, it’s hard to communicate that unique value proposition, making it difficult to stand out from the competition.
Dependency on Word-of-Mouth and Organic Growth
As I mentioned earlier, without marketing, companies often rely on word-of-mouth or organic growth through customer referrals. While this can be a powerful tool, it’s usually slower and less predictable than growth driven by targeted marketing efforts.
Missed Opportunities for Feedback and Improvement
Marketing and advertising efforts often provide valuable insights into customer preferences and behavior. Without these insights, a company might miss opportunities to refine its offerings or fail to identify shifts in market trends.
Challenges in Building Customer Loyalty and Retention
Effective marketing helps in not just acquiring new customers but also in retaining them through engagement and loyalty programs. Without these initiatives, a company might struggle to keep its existing customers, especially when competitors are actively trying to attract them.
Eventual Revenue Plateau or Decline
Ultimately, the lack of marketing and advertising leads to a plateau in revenue growth, or even a decline, as the company fails to attract new customers or lose existing ones to competitors who are more aggressive in their marketing efforts.
It’s important to note that some companies, especially those in niche markets or those with highly distinctive products, have been successful without heavy reliance on traditional marketing and advertising. These companies often leverage other strengths, such as exceptional product quality, active new product R & D, strong community engagement, or superior customer service. However, this is more of an exception than the norm, especially in highly competitive industries.
At the end of the day, you can’t grow your company without marketing.
It’s up to you to determine what speaks to your target customers, where they spend their time, and who does the speaking. Don’t make the mistake of remaining silent and let your competitor do your speaking for you.
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