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What Do Used Cars And Internet Marketing Have In Common? Today's Lesson...

by sal64
16 replies
Reality is...

I've probably been doing this too long now and I need a break.

The problem is that I can't buy anything without analysing it through the eyes of a marketer. Every store I walk in to... I find myself reading between the lines.

Today was no different. There's a good refresher lesson here for me and possibly a new one for you.

If you're like me, you can get sucked in to the vortex that this business is. We lose focus and become side-tracked with doo-dads and gadgets. In our never ending search for page 1 ranking or that non-existent magic bullet, we take our eye of the ball about what this business all boils down to... marketing.

Used cars? I'll get to them in a moment.

But first...

In our quest to discover the real "secrets" to success, we often can't see the forest for the trees. Or in our case - we step over $100 bills in order to collect pennies.

So anyway, back to the cars.

I have decided that it was time to upgrade to a larger car. One that runs on LP gas (half the cost of petrol). And frankly, I am past the whole shiny new car thing. Been there, done that. Whoopee. Not that I'm saying that it's a bad thing, it just isn't for me any more.

I visited what is probably the biggest used car yard in Melbourne. They proudly market themselves on being the cheapest prices (not cheap quality). The turn over around 150 cars per week... so they are doing something right.

Here's where the lesson kicks in...

Firstly, there are no secrets to success on the internet. Everything you need to know has been happening in the real world for hundreds of years... maybe thousands. So why people treat IM as something completely different is beyond me to be honest.

Bottom line: It isn't. A business is a business no matter where it is located. But I digress...

Whilst I was doing the paperwork, I got asking the rep some questions.

This place is different from traditional car dealerships.

Their USP or unique selling proposition is their cheap prices. They rely on volume sales. In fact they don't live or die by the profit margin on the cars.

Where they make their money is on the back end. Financing, insurance, parking sensors, paint protection, window tinting etc.

In essence, they have a sales funnel in place and the cars are the front end, despite being the highest cost product.

Now the moral and point of this story is this...

Many newcomers and oldies to IM get too front end-centric and their sole focus is to make money on their first product.

What I took away today apart from my new 2nd-hand Ford, was a timely reminder that if your survival depends on the sales of 1 product, then your chances of failure will be in the top 10 percentile.

These people had nailed it offline.. and their system is no different to what most of us a trying to do. Funny because on the table, there was a laminated A4 with this week's special offer of half price front sensors if you purchase rear ones for $699.

This may not sound like much profit, but as the rep pointed out... multiply this over 10 cars per week and it all adds up.

They also sell on no haggle fixed prices. Their policy is that if they discount every car by even $100... then with 150 sales, that's $15000 in lost revenue per week! That sort of logic should also rule your business decisions. Undersell your product by $10 and look at how much you leave on the table.

Are you over paying for regular services like hosting etc? What subscriptions do you have that you don't need?

Now the used car market is as cut throat as it gets. BUT because they have a kick-ass USP, they can undersell cars and still make more money that their competitors. What's yours?

And the truth is, they ain't that much cheaper. So go figure.

Are you competing in a market that determines what your price point is? Then you are selling a commodity. Which is ok if you have other complimentary products to sell like our car guys.

Maybe it's time for a slight tweak and rethink about how we do business?

It pays to have a funnel in place. Your primary product should be a means to get a prospect through the door so that you can offer them additional high profit margin products.

Have these systems in place and ready to go. Don't wait until you make enough quick cash... because quite frankly, you may not last that long.

Sal
#cars #common #internet #lesson #marketing #today
  • Profile picture of the author The Copy Warriors
    Originally Posted by sal64 View Post

    Firstly, there are no secrets to success on the internet. Everything you need to know has been happening in the real world for hundreds of years... maybe thousands. So why people treat IM as something completely different is beyond me to be honest.

    Bottom line: It isn't. A business is a business no matter where it is located. But I digress...
    Sal
    So true.

    The more I read, the more I think that people have this idea of internet marketing as some kind of cheat code for making money or something. like i'll hear people talking about all these different little systems they came up with to generate cash, and it doesn't sound at all like running a business, it sounds more like trying to make money on horse races or something. there must be a lot of products out there promoting the idea of "internet marketing" as some little trick where you press enough buttons the right way and your computer will start feeding you money, because you see so many people in IM who think like those teenage boys who are always trying to make money off little gimmicks involving numbers.
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  • Profile picture of the author barbling
    Originally Posted by sal64 View Post

    ....

    Maybe it's time for a slight tweak and rethink about how we do business?

    It pays to have a funnel in place. Your primary product should be a means to get a prospect through the door so that you can offer them additional high profit margin products.

    Have these systems in place and ready to go. Don't wait until you make enough quick cash... because quite frankly, you may not last that long.

    Sal


    So very very true!

    This is how I now run my online business as well; my products start out at dimesale at 97 cents and go up from there. Low prices have people buying more; that increases my list. And once the price goes higher, my affiliates start to kick in (as I offer 100% front end).

    Long term long term *long term*.... plus high valued customer service.

    It definitely works.

    Coby was the one who really did open my eyes to the benefits to this - I'm very grateful I was able to listen and learn!
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  • Profile picture of the author mikemcmillan
    Sal, once again, you've hit it right on the head.

    So a guy walks into a department store in a mall. He sees sweaters on sale. He finds a $40 sweater on sale for 60% off; he can get it for only $16! He goes to the counter and the clerk asks if he is paying cash or using his store credit card. He doesn't have a store credit card. So the clerk says if he applies he can get a 60 second approval and if he uses his card today he can get an extra 10% off and an automatic $5 discount applied to his purchase.

    This brings the price of his sweater down to $9.40 (if I did the math right). Now remember, the business has rent on its floor space. It has inventory. It has wages and benefits to pay employees. It has security. It has taxes to pay. And they are selling a $40 sweater for only $9.40?

    But there's a good chance the guy will come back one day and maybe buy a $500 suit. He puts it on his store card and makes the minimum payment of say 15-20 dollars a month at a 12-20% APR.

    Doing this he will be paying for ten years on the suit he bought. Where else could the store get a 20% return on their invested dollars? On Wall Street? Not likely! The store did exactly what you discussed: They get a customer into their sales funnel and make back end profits off the poor guy for years to come.

    Yup, a lot of people are willing to spend hundreds of dollars a month for hype-filled, make-a-million-a-month junk, but they are unwilling to invest the time needed to do the basics of building a customer base and marketing to them over and over.

    Whether you're talking about buying cars, sweaters, or ebooks online--the successful businesses understand that an online business is first and foremost a business. Exactly the same selling principles are involved for the guy going door to door, cold calling trying to sell vacuum cleaners as are involved in selling digital products online: Develop a great pitch, back it up with a great product, provide excellent customer service, and back up your initial sales with value-added supplemental products or services. It ain't rocket science!

    Well thought out thingie Sal. Unfortunately, the people who need to study it the most are off buying some more magic-button cash machines. Go figure!

    --Mike
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  • Profile picture of the author sal64
    Thanks for the input, folks.

    There's 2 issues here...

    Firstly, if you want to use a low entry price point, then make sure you have something in place to increase the lifetime value of your customer.

    Secondly, there is just so much for us to learn in the offline world if we pull our collective heads out of our collective asses.

    Pretty much the online breakthroughs are just established offline methods geared to the online marketer.

    Next week, I'll share my espresso machine experience and how I used it to slash my refunds... true.

    Sal
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    Internet Marketing: 20% Internet - 80% Marketing!
    You Won't See The Light Until You Open Your Eyes.
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    • Profile picture of the author Steve Faber
      Originally Posted by sal64 View Post

      Thanks for the input, folks.

      There's 2 issues here...

      Firstly, if you want to use a low entry price point, then make sure you have something in place to increase the lifetime value of your customer.

      Secondly, there is just so much for us to learn in the offline world if we pull our collective heads out of our collective asses.

      Pretty much the online breakthroughs are just established offline methods geared to the online marketer.

      Next week, I'll share my espresso machine experience and how I used it to slash my refunds... true.

      Sal
      It's all so true, and it's because Internet marketing isn't a business model. The Internet is merely a communication medium to facilitate whatever business model you're using. That's why all the same principles apply so well both on-line and off.

      Sure, there are some differences, such as the ability to rapidly split test marketing initiatives, or bootstrap a relatively large business, but those all stem from the Internet's speedy and powerful communication, and it's unprecedented accessibility for virtually everyone, not from fundamental business model differences..
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      • Profile picture of the author sal64
        That's exactly correct in my opinion.

        Sadly too many focus too much on the internet and not enough on the marketing.

        Sal

        Originally Posted by Steve Faber View Post

        It's all so true, and it's because Internet marketing isn't a business model. The Internet is merely a communication medium to facilitate whatever business model you're using. That's why all the same principles apply so well both on-line and off.

        Sure, there are some differences, such as the ability to rapidly split test marketing initiatives, or bootstrap a relatively large business, but those all stem from the Internet's speedy and powerful communication, and it's unprecedented accessibility for virtually everyone, not from fundamental business model differences..
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        You Won't See The Light Until You Open Your Eyes.
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  • Profile picture of the author marcuslim
    Good post. We can do well to learn from the masters of offline advertising. Claude Hopkin's Scientific Advertising is as relevant in the online world as it was in his day. The kind of stuff Dan Kennedy teaches is also applicable online, because the fact is human psychology is still the same whether online or offline.
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    Marcus Lim
    Silver Bullet Publishing

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    • Profile picture of the author sal64
      Yes, humans do have a somewhat consistent behavioural pattern. And as long as they are driven by these emotions, the concepts stay the same.

      Thing is...

      If one opens their eyes, there are great learning examples to be found everywhere... and not just online.

      Sal

      Originally Posted by marcuslim View Post

      Good post. We can do well to learn from the masters of offline advertising. Claude Hopkin's Scientific Advertising is as relevant in the online world as it was in his day. The kind of stuff Dan Kennedy teaches is also applicable online, because the fact is human psychology is still the same whether online or offline.
      Signature
      Internet Marketing: 20% Internet - 80% Marketing!
      You Won't See The Light Until You Open Your Eyes.
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  • Profile picture of the author Folusho Orokunle
    Awesome Sal! This is how REAL businesses are run, even the "at home" ones.

    Amazon makes no money on the kindle but in doing so, they undercut a lot of competitors while their Kindle is now the best selling product on Amazon.

    The infomercial formula is to charge $19.95, lose money on the first product, then make it up on the upsells.


    Originally Posted by sal64 View Post

    Reality is...

    I've probably been doing this too long now and I need a break.

    The problem is that I can't buy anything without analysing it through the eyes of a marketer. Every store I walk in to... I find myself reading between the lines.

    Today was no different. There's a good refresher lesson here for me and possibly a new one for you.

    If you're like me, you can get sucked in to the vortex that this business is. We lose focus and become side-tracked with doo-dads and gadgets. In our never ending search for page 1 ranking or that non-existent magic bullet, we take our eye of the ball about what this business all boils down to... marketing.

    Used cars? I'll get to them in a moment.

    But first...

    In our quest to discover the real "secrets" to success, we often can't see the forest for the trees. Or in our case - we step over $100 bills in order to collect pennies.

    So anyway, back to the cars.

    I have decided that it was time to upgrade to a larger car. One that runs on LP gas (half the cost of petrol). And frankly, I am past the whole shiny new car thing. Been there, done that. Whoopee. Not that I'm saying that it's a bad thing, it just isn't for me any more.

    I visited what is probably the biggest used car yard in Melbourne. They proudly market themselves on being the cheapest prices (not cheap quality). The turn over around 150 cars per week... so they are doing something right.

    Here's where the lesson kicks in...

    Firstly, there are no secrets to success on the internet. Everything you need to know has been happening in the real world for hundreds of years... maybe thousands. So why people treat IM as something completely different is beyond me to be honest.

    Bottom line: It isn't. A business is a business no matter where it is located. But I digress...

    Whilst I was doing the paperwork, I got asking the rep some questions.

    This place is different from traditional car dealerships.

    Their USP or unique selling proposition is their cheap prices. They rely on volume sales. In fact they don't live or die by the profit margin on the cars.

    Where they make their money is on the back end. Financing, insurance, parking sensors, paint protection, window tinting etc.

    In essence, they have a sales funnel in place and the cars are the front end, despite being the highest cost product.

    Now the moral and point of this story is this...

    Many newcomers and oldies to IM get too front end-centric and their sole focus is to make money on their first product.

    What I took away today apart from my new 2nd-hand Ford, was a timely reminder that if your survival depends on the sales of 1 product, then your chances of failure will be in the top 10 percentile.

    These people had nailed it offline.. and their system is no different to what most of us a trying to do. Funny because on the table, there was a laminated A4 with this week's special offer of half price front sensors if you purchase rear ones for $699.

    This may not sound like much profit, but as the rep pointed out... multiply this over 10 cars per week and it all adds up.

    They also sell on no haggle fixed prices. Their policy is that if they discount every car by even $100... then with 150 sales, that's $15000 in lost revenue per week! That sort of logic should also rule your business decisions. Undersell your product by $10 and look at how much you leave on the table.

    Are you over paying for regular services like hosting etc? What subscriptions do you have that you don't need?

    Now the used car market is as cut throat as it gets. BUT because they have a kick-ass USP, they can undersell cars and still make more money that their competitors. What's yours?

    And the truth is, they ain't that much cheaper. So go figure.

    Are you competing in a market that determines what your price point is? Then you are selling a commodity. Which is ok if you have other complimentary products to sell like our car guys.

    Maybe it's time for a slight tweak and rethink about how we do business?

    It pays to have a funnel in place. Your primary product should be a means to get a prospect through the door so that you can offer them additional high profit margin products.

    Have these systems in place and ready to go. Don't wait until you make enough quick cash... because quite frankly, you may not last that long.

    Sal
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    Need premium biz opp traffic? Email me: folusho at eliteecoach.com

    Internet Marketing Television

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    • Profile picture of the author sal64
      lol... I wrote about this a while ago.

      If you are not in the IM niche then you have to understand that consumers like familiarity. hence why the Amazon pay buttons have been so effective for us.

      Sal

      Originally Posted by Folusho Orokunle View Post

      Awesome Sal! This is how REAL businesses are run, even the "at home" ones.

      Amazon makes no money on the kindle but in doing so, they undercut a lot of competitors while their Kindle is now the best selling product on Amazon.

      The infomercial formula is to charge $19.95, lose money on the first product, then make it up on the upsells.
      Signature
      Internet Marketing: 20% Internet - 80% Marketing!
      You Won't See The Light Until You Open Your Eyes.
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  • Profile picture of the author Bananaprod
    This post is very clear and comprehensive without being lengthy. Thank you for sharing this.
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    • Profile picture of the author sal64
      Do I win a prize for this? A new Fez dispenser would be nice.

      Originally Posted by Bananaprod View Post

      This post is very clear and comprehensive without being lengthy. Thank you for sharing this.
      Signature
      Internet Marketing: 20% Internet - 80% Marketing!
      You Won't See The Light Until You Open Your Eyes.
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  • Profile picture of the author funkynassau
    My husband's day job is in the car industry and he says they dont make much money on any car they sell, new or used. The money is in the "extras" they get you to buy, from undercoating to paint protection to upholstery spray to repel spills etc. That's where the money is. The car itself gets you in the door.

    Hubby is in one of those after-market things, he does stone chip repair on cars for the car dealers. If he charges $100 for his work, it gives the dealer an extra $500. on the sale of the vehicle because it now looks perfect.

    Funkynassau
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    ChipFixx custom mixed auto touchup paint kits.
    http://www.chipfixx.ca

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  • Profile picture of the author sal64
    Funny thing is that online influence is a powerful beast. As more and more fads and methods are being introduced, it clouds the water. The end result has been that the conversation has moved away from traditional marketing topics.

    If I could wind back the clock, I suspect this place would look very different.

    But here's the thing...

    The concepts that are discussed on this thread... ask any of the successful old school marketers, and they would mostly reveal that it's these traditional methods which they use.
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    You Won't See The Light Until You Open Your Eyes.
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  • Profile picture of the author sal64
    Speaking of cars...

    Another great marketing ploy is how they appeal to a customer's status with all the little badges they stick on the car. Engine size, equipment level etc.

    That's why we always name our products things like Gold, Platinum etc... don't we?

    Make your customer feel special about their purchase.
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    You Won't See The Light Until You Open Your Eyes.
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