Andrew Street
To the dealers that need a quick flash boost of leads, conversations with prospects, and sales, this conversation is for you. It’s not something you always need to do, but it’s certainly something that comes up on every dealer’s radar at some point in time especially at the end of the month when they’re lagging behind a little bit on sales. And this is a technique that we’ve always been apprehensive to do because it seems so hoaky and it’s been done in such a funny way, but this conversation is with Dave Lemmon who’s our head of customer success who’s been pretty aligned with me on being apprehensive to test it. Once we’d onboarded a few clients that were doing it with a different provider and seeing some results we decided to really test it out with them using their BDC, uh, and also virtual BDCs. And this conversation digs in and it worked. We get $6-7 leads coming to the dealer through messenger, through chat. So, I hope you enjoy this converstion as Dave and I dig into Facebook events.

[intro]

I’m joined here with our Director of Client Success, Dave Lemmon. 

David Lemmon
How you doing? Good to meet you, Andrew. Good to talk to you.

Andrew Street
It’s great to talk to you. We talk all the time. Just a heads up. 

David Lemmon
We do. 

Andrew Street
Dave and I met a long time ago, eight years ago competing, but quickly realized that we both look at our industry of automotive and digital in a similar way, and it’s not necessarily like what we’ll sell, but what works, what’s cool, what’s around the next corner? How can we be more precise and more prescriptive and have better looking advertising and what’s garbage?

And can we figure out if it’s garbage and stop doing it and eventually found a way to start working? 

David Lemmon
Yeah, I mean, that’s a, I remember going back, oof, I think you guys had just taken on the Dealer OMG name, from, you know, the previous iteration where you weren’t auto specific. And we met at one of the digital dealers of many, many to come. Yeah, I mean, I think, I think the big thing that you and I always talked about was finding ways to truly serve dealers that aren’t gimmicky, that aren’t shiny objects that are, you know, the, the ways that you build long-term relationships with a dealer so that you become a trusted partner versus a vendor with a shiny object that everybody wants to run out and buy for $599 and then cancel two months later. You know, it was always about building relationships that last years not months. And so it was just a really simple and easy fit for us to start working together a couple of years ago. 

Andrew Street
I agree. I love, I love the story of us and, uh, the background could be a conversation for, for a different , uh, video. So, and, and I think you and I were aligned with the, the ways that dealers can spike sales quickly, and there’s so many things out there that look too good to be true, and the case study is too good to be true, and the return. Like I’ve had dealers who want to that, that have been longtime clients, something walks in their front door and it’s like, Hey Andrew, I need to try this out. Can you guys pause? And they guaranteed that we’re gonna get 30 sales or we get half of our money back is literally something that happened , and it’s like, How much is it? Where are they putting it? Where’s the, where are the ads gonna run?

David Lemmon
$15,000 and we dunno! 

Andrew Street
Yeah. And you’re gonna get $7,500 back.

David Lemmon
Yeah.

Andrew Street
Okay. I’m supporting this. , I’ll leave the front porch light on. As soon as you’re done, like, let us know. Yeah, I’ll keep the pixels, keep everything in place so we can keep growing our retargeting audience. I’m still ingesting your data for targeting an attribution. I can help you see how it performed and then we’ll get back to what was working. But for the, the flash instant thing that that’s always been in our industry since I’ve really been sinking my teeth into the paid digital side of auto has been Facebook events.

David Lemmon
Yeah. I mean, well look here, here’s the reality is, is that, you know, once a month, at least one customer tells me at some point during the month, “oh man, I’m having a really bad month. What can you do? To get our month, you know, really moving to, to help me sell some cars next week with most advertising.” The real answer is a time machine and you call me two months ago cuz that’s just not how advertising works. Uh, you know, if you see a dip in sales in February, chances are it’s related to advertising you did in December, January. We are very direct with our clients, and I do tell them that, you know, I don’t promise them quick fixes.

And I, and I tell them, you know, that Facebook advertising particularly is more of a long-term strategy as a role. It is going to, you know, build over time. What you’re doing now is going to impact next month, the month after, the year after, and so forth. The exception has been, there’s always been this thing in our space called Facebook events. We’ve all been a, you know, acutely aware of them. Um, because we , you know, as a Facebook agency, we hear our clients say, “Hey, I’m spending $15,000 on a Facebook event this month” and it’s not with us. Um, It’s, I was incredibly skeptical of these things and I, and, and you know, don’t get me wrong, for the most part, I remain skeptical of a lot of them. Um, you know, when you look at them, the way that they happen is they create a fake Facebook page. There’s no transparency. It’s a really small ad spend, um, which you don’t even know what it is, right? So it’s a big, big markup and the upside of it is, is that they’re generating these messenger chats on Facebook, which we’re fully capable of doing, having an, you know, an outsourced BDC

convert them to appointments and deliver those appointments to the dealership. But all those negatives weighed really hard for me. Like it’s, you know, I had companies approach me about working with them to do this and you know, my feeling was always coming up with dummy Facebook pages once a month for all my clients, feels wrong and contradictory to everything that I try to do, and everything else I didn’t like about it either. But we had a, a very good, long-term trusted partner, uh, that wanted to try these and was, was in a position where they were getting rid of their vendor, um, that was doing them. So they didn’t have a choice. They had to find somebody new to do them, and they were either gonna go out to some company that does all the fake Facebook pages or, or we were gonna try it. So we, you know, gave it a spin and tried it a couple different ways. We tried it with, An outsourced BDC, and we tried it with sending all the leads directly to the dealership, BDC. We ran it through their Facebook page. We had fully transparent spending. Um, our costs were a fraction of what most of the other event companies out there were. We had. A million hiccups, as you would expect, you know, the first time out doing this thing, trying to figure out how to make it work around the, the chat management integrations and some things like that. Um, but once we got past those hiccups, we saw some crazy good results. Uh, you know, we ran these for a week, like most of the events run. The ones– we ranged anywhere from about 150 to about 250 leads in a week. The outsourced BDC converted about 40% of those to appointments with name, phone number, email address, everything, and it scheduled appointments at the store. Uh, and actually the, the in-house BDC, who knows their brand better and everything else did what you expect and they, they actually converted an even higher rate. Um, that way I’m sold. Right. 

Andrew Street
Okay. Okay. I’ve got questions. So can you say the manufacturer of the dealership? 

David Lemmon
It was a few, it was four different Nissan stores. 

Andrew Street
Okay. Um, that was always my instinct too, it’s like looking at who would go through and go for this and have that be the hook that pulls them out from just scrolling their newsfeed to going into a dealership immediately would be more of a subprime buyer that could get qualified Right now who has a low, it’s a low down payment this week, or it’s, uh, low monthly payments and I, you know, the, the language of uh, subprime advertising. I feel like that would be the hook. I’ve tested this years ago with vendors who specialized in it, just cause I didn’t want to really have my fingerprints on it cause it felt sticky and it felt gooey and it had all caps and it had a bunch of emojis in the copy of the ads and it didn’t really work. And I looked at why, and it was, maybe it was like $9,000 for the week or something. And you can tell, you can sort of tell how much money somebody’s spending just by, if you’re not spending any money on Facebook, what’s, how many people were reached just through your, through their reach on their reporting, or you can just look in your analytics on your page and see that you, that 50,000 people saw a, a post in a paid advertising way that week. 

David Lemmon
I mean some of the two of us posted posts, posts even, which is, you know, these aren’t Facebook companies is a general rule, right? These are BDC companies who figured out a really simple way to run a very kind of templated ad. I will say though, I have seen the events outside of subprime be successful with a few other, um, kind of you, uh, catches as well. One of them is buyback. So if you have an ability right now to offer $2,000 over KBB works the same way, right? You’re gonna put that in front of just a mass audience saying, Hey, I’m gonna give you $2,000 over Kelly Blue Book this week only. You’re still gonna get a ton of of high level responses on that. If you are able to generate an extremely low payment. On a new car– I’ve got a Cadillac dealer right now, um, who is able to do, I wanna say $349 leases on one of their, you know, very nice SUVs and it would work for that, you know, zero money, zero money out of pocket and $349 a month. That’s gonna generate a lot of hits as well, you know, drive off today. Zero out of pocket, $349 a month. So there are other hooks that you can build, um, that that’s gonna suit your dealership better, I think, certainly subprime is always gonna have your maximum result. It’s gonna have, you know, these are people that need a car and these are people that are struggling to get one. These are people that are gonna see that ad and immediately respond and be like, yes, let me give you my social over the phone and , you know? 

Andrew Street
Right. Unless it’s an incredible offer that’s unique, that would stand out to a new F-150 buyer. 

David Lemmon
Yeah, and that’s, I, I think what’s gonna be interesting and kind of exciting as a true Facebook agency. I don’t know of any other, you know, kind of mainstream Facebook agencies like ourselves that are doing these events. It gives us a lot of ability to do some custom things with these events and see how they work. Um, and you know, partially because we’re also not charging nearly as much. I’m talking, I’m literally right now looking at an email today that I’ve been going back with on a Subaru store, and they have some very specific ideas about the hook that they wanna run for an event. And he’s like, Hey, can you, do you know, I know everybody does like subprime. Can you do this? We can do anything. Yeah. I mean, you tell me what you wanna run. We’re, we can do anything. We’re an agency, so we’re gonna be able to do whatever you need to do. Um, so I think that’s gonna be really interesting is somebody could call me 10th of the month and be like, man, I gotta get cars. I, I have to get cars. Okay, well let’s run a buyback event. What’s the best you can possibly do over KBB? And now we run a buyback event. Um, Hey, I’ve got this crazy low $179 lease payment that I can offer. Awesome. Let’s give it a go. Let’s hit a mass audience with it. Let’s generate leads, let’s have the BDC convert ’em to appointments. You know, if you spend $3000 or $6,000 on it, it’s really, it’s a really, really fast path to solid return on ad spend. I mean, you’re–. I mean, you know, if you sell six cars from a one week event that cost you $3,000, I don’t care what your gross per unit is, you’re fine. Like that’s a good week and that’s a good investment. So, you know, and we can target audiences too. You know, if you wanna do, uh, a one time, you know, one week event for all your former customers. That’s a, that’s an, an event you could do. Put every former customer into a Facebook audience. This is a, an a sales event only for , you know, customers of Smith Dodge. And that loads in, you know, and this is the, the biggest savings we’ve ever offered, and we’re only offering it to our own customers. That would be successful.

Andrew Street
Um Right. And do it, you know, but, but for the 10th of the month, we’re offering this sensitive special right now. Start by having, filling out this message, getting a conversation started with our team who knows their stuff about our cars and about the offer. Uh, and I think there’s more opportunities, so like, as marketing firm first, technology company second, then like BDC is like number 150. We’re not nowhere close to being in BDC opposed to like other companies that I see are doing it, they’re BDC that have that machine oiled. Now it’s like, okay, let’s put $500 into ads and target people who– let’s optimize the campaign so Facebook will put it in front of people who have a high likelihood of filling out the message. Opposed to, I think there’s like, or I know that there’s endless opportunity to be really good with the targeting and the creative. So it’s for that Dodge store. It’s, it’s, uh, you know, we are– “This week only in Saturday, our owner wants us to fill the lot with pre-owned Durangos, so we are paying a premium this week only for Durangos. And that ad goes to everybody who’s bought a Durango from me and everybody who, according to the DMV live in my city, who drive a Durango. Now that ad is not like, Hey, we’re buying cars. It’s, we’re buying cars before Saturday. 

David Lemmon
You know, you can go trucks, go even more general, you know, to, to really build the audience out. And that’s, so we did a few things when we tested this that were interesting. Um, we know that most of these event companies when they run the ads are just running a geo.

Like there’s, there’s no audience select. It’s just everybody in a radius surround zip code. Um, we tested it with some near prime. Credit audiences as well, you know, side by side, A/B test we ran. You know, here’s the go. This is every single person. This one is specifically near prime audiences. The near prime audiences outperformed. Um, and that’s, you know, that’s an audience that we have that I’m gonna assume that most Facebook event companies, don’t have that kind of integration. Um, that they don’t have credit audiences, they don’t have year make, model owner data that they can create audiences out of. They certainly don’t have first party data. You know thats part of the reason they create the dummy Facebook pages is they’re not Facebook companies. These are it, it’s not the easiest thing in the world to get all the access required to run ads through a dealership’s Facebook Page. It’s not, it’s, you know, there’s steps involved. There’s, you know, things that, there’s things you have to do and have to know how to do in order to, to do that. We do it every day. So for us it’s a huge advantage. You know, I, if you don’t do it every day, and I’ve worked for other companies where we. Man, it was a struggle. You know, we, we’d be sitting on setups for 2, 3, 4 weeks that, that still weren’t done because we hadn’t had gotten the Facebook access, gotten the pixel installed, gotten any of those kinds of things. You know, we do that in three days now, uh, with anybody. So, You know, our expertise allows us, and, and I think you hit it, right, like these are face, these are BDC companies that figured out how to generate some cheap leads on Facebook. We’re a Facebook company who is better than anybody in automotive at Facebook advertising. We can figure out the BDC part. For one thing, most dealerships have their own, and as cool as it is to just say, Hey, I delivered you 40 appointments. It might have been 60 if your own BDC that was managing those leads, because they know your store, they know your inventory, they know your value proposition, and you know, if they’re converting at a higher rate, why wouldn’t we want your BDC, you’re paying ’em.

Andrew Street
Yeah, and I, and this isn’t a hit job on companies out there that are BDC companies doing Facebook events. I think it’s opened my eyes to being like, hell no. We’re not running those ads. We’re not running these ugly ads with all that copy. With that ugly picture. No, but then doing it deliberately.

David Lemmon
We are now cutting those costs. Yeah. I mean, look, here’s the thing. I was very critical of those companies for a very long time, um, you’ve heard, you’ve heard me do it because I had a huge amount of skepticism. I just didn’t believe in it. Um, I didn’t think they were providing value for their dealers. And at the end of the day, that’s my gauge. Right? That’s what I gauge other vendors by As a general rule, I, I, you know, most of my friends are vendors, so it’s, it’s not like I don’t, you know, get along with most vendors in the space. Cause I think most of them try very hard to do a good job. I firmly believed that the event companies were not operating a, a true value offering. They are. Do I think that they’re not doing the best job of delivering it because of those things we talked about earlier, the, the markup, the lack of transparency, the, you know, fake Facebook pages and all of that. Yeah. Those are all issues. However, I really do think even a 10 or a $12,000 crazy marked up Facebook event through a dummy page with no transparency, probably still helped the dealership sell cars. Probably still had a solid return on ad spend. I just wanna make it better.

Andrew Street
Okay, so it sounds like there’s two options that we are really, really exploring outside of all the different permutations of, is it trade-ins, is it sales, is it CPO? Uh, and it’s using the dealer’s BDC or using an outsource BDC. 

David Lemmon
Those are the two that, that’s really the big option that a dealer has to decide on. Um, I was, I will say, completely blown away by the BDC of choice that we’re working with. Um, 40% conversion rate is massive. I, I would’ve expected half that at best, so, way– 

Andrew Street
Do you know if that’s appointments that showed, or appointments that scheduled? 

David Lemmon
I don’t have show rate for it. 

Andrew Street
So we’ll assume it’s 50%, so it’s half that maybe? 

David Lemmon
Show rate’s probably 50% and then close rate’s probably 50% based on some of the numbers we’ve seen. But, you know, a 40% conversion rate to getting phone number, you know, email address, appointment set, is very high and it’s– especially for these type of leads, much higher than I would’ve expected it to be. Um, again, in-house, BDC still outpaced that a little bit and probably, if I had to guess, set stronger appointments that might’ve had a higher show rate, might’ve had a higher close rate, but it’s gonna come down to bandwidth at the end of the day.

Andrew Street
Right? If you, if you’re sitting at a store that you know your BDC has some extra bandwidth, cool. This is a great way to get them busy. If your BDC is already at their breaking point and threatening to quit every two days, and your BDC manager is, you know, looks frazzled and, and run down because they’re already overwhelmed, outsource it.

David Lemmon
Right. Yes, dude. In my experience, like if we start pumping it like Facebook leads suck, we’re uh, they just suck. Leads suck. But if we’re doing a great job and it’s just a retargeting audience for general, Facebook leads to a dealership and they’re people who know about the dealership or they’ve bought from us before and we’re not getting ice cold people that are just filling out leads. Maybe we’ll see three, maybe 4% close into sales, which is reasonably low. But then if we start doing this type of strategy to a, BDC that’s already a little bit overwhelmed, they’re gonna stop working these leads immediately. 

Andrew Street
Exactly right. 

David Lemmon
Yes. 

Andrew Street
Exactly right. They’re gonna be like, oh, it’s another one of those. Yeah. Okay. Now we’re good. You know, just hang up. 

David Lemmon
Okay. So, so it’s just bandwidth. If you have the bandwidth, have your BDC do it. If not, we’ve got the outside BDC that just sets appointments. 

Andrew Street
Yeah, yeah. Who is, who is good. They’re, they’re, it’s not the perfect situation, but it’s a pretty good one. Um, and again, I was very surprised at how well they did. I would not try to let this run through a chat provider. I mean, you know, don’t get me wrong. I love CarNow. I love, you know, Active Engage. These are really good companies who provide a huge value. They are not set up to handle a Facebook event for you. Like, that’s not how they’re, that’s not what they’re built for. Um, so it’s gotta be one or the other. It’s gotta be your BDC or it’s gotta be our BDC. But either way, The, the return on enhancement is there, the ROI is there. It’s– 

David Lemmon
Right, and it’s, and it’s, uh, it’s not, “Hey, let’s do the branding. Let’s go do the full funnel.

Let us have a crew come out there and do some creative shooting. We’re gonna interview the general manager in the princ–” you know, it’s like, “Hey guys, this week I need to sell nine RAMS. You know. 

Andrew Street
This is one of two ways that I know of that you can impact, it’s the 2nd of March, if you’re a dealership and you’re trying to figure out how you can change your March results using Facebook based on something you’re gonna do today, there’s two ways to do it. That’s it, that I know of. It would be one of these Facebook events, or it would, be doing a big blitz to your former customers. They’re people that already know you already trust. You don’t need the, the cadence of advertising to build them into a trust decision. These are people that, you know, you could put an ad in front of for a lease pull forward. You could put an ad in front of for a trade in, trade up, and you know, They don’t need any more questions answered about you as a store. Those are the only two ways I know of that. You can call me on March 2nd and say, “Hey man, I’m really worried. I gotta have a big march. What can we do?” Every other time

I’m gonna tell you, call me in January next time. You know, if you wanna have a big March, let’s talk January 1st. 

David Lemmon
Right. Yeah. But I, I feel like too, like March is uniquely positioned to be a month where you can do a lot more of these kinda like experimental, especially if it’s tax season. Your tax payments, your down payment kind of thing. That’s hot right now, but everything else, it’s like you, let’s get creative and let’s figure out what you have in your inventory. Let’s look at your customer data of, you know, how many people we know that have your vehicles out there on the road, what they’re driving, and let’s come up with something creative and let’s come up with a nice design that comes through their newsfeed and reminds them about the experience they had with us. And let’s thank them after they purchased by targeting people who’ve purchase and have that, you know, the CSI, you know, get that customer feeling welcome and, and like, they made a good decision with us. 

Andrew Street
I mean, COVID mania is over, right? Like it’s, it’s now time to go back to advertising, payments, advertising specials, trying to actively and aggressively sell cars. They aren’t just, you don’t have a lobby full of sales guys just waiting for the next person to walk up and beg to give you their money. That’s over. That was great. It was cool. It lasted longer than anybody thought. Um, but it’s over now. It’s all about more traditional dealership advertising of you know, payments, no down payment, interest, you know, high trade. All of those things that drive sales event type messaging, we’re back to it. We have to be back to it or you’re not gonna sell that many cars. You know, another opportunity that something like this could be valuable is if you’re sitting on a whole bunch of cars you paid too much for. Um, a lot of our independence right now are sitting on inventory that they’ve had 60, 90 days. They paid too much for it. I don’t know whether they’re hoping that it just magically bounces back to where they’re gonna be able to sell it for, for the amount that gets them right. They’re not so your best bet, get rid of it as fast as possible. This would be a great way to do it.  liquidation event. Everything must go, you know, , and it is a real liquidation event. You’ve got 50 cars that you’re upside down in and you need to get rid of right away. Take the hit, let’s get ’em sold in the week and move on with your life. 

David Lemmon
Right? And if you’ve taken a hit, like that’s where you can get a cheap, a, a relatively cheap ad spend, especially if you’re using your BDC. With a compelling message and then it’s gonna flow Plenty of leads. 

Andrew Street
Yeah. I mean, look with the, with the non outsourced BDC, with, with the, the dealerships that we did this where their own BDC did it, they paid us $3,000. That’s it. That’s all they spent. Um, one of them had 267 leads. In a seven day period, 

David Lemmon
It’s 272.I have it pulled up. 272, Okay, that was close. You know, five off, not bad off the top of my head. Um, Yeah, like that’s, that’s a no-brainer. It, it’s, so if you have 270 leads next week that are incremental leads that you weren’t going to get otherwise, these are not people that were going to call your store. These are not people that were going to walk in. These are not people that were doing, doing a Google search that would’ve popped up your VLA. These are not, these are incremental opportunities. These are people that were not in any way going to be visiting your. That now are 

Andrew Street
Right. And while you’re doing this, are you wanting to do all the same, same advertising you’re always doing with the retargeting and the specials and the incentive?

David Lemmon
Yeah, that’s, I mean, look, do 25%, 25% on that number, right? So 270 leads, 25% is roughly 70. Um, 25% of that is roughly 18. So 25% show rate, or 25% schedules, 25% show rate, and then most dealerships close at 50%. So that puts nine sales for $3,000. That puts nine sales into your dealership next week that are incremental, that we’re not going to be visiting your store. That’s makes sense all day to me. 

Andrew Street
Well, let’s do some more of this.  

David Lemmon
Yeah, agreed. 

Andrew Street
Let’s do it. Let’s do it this month. Um, well maybe we’ll follow up and keep talk–, seeing what creative, what copy can we get outside of the subprime(y) type of gimmick that has worked to get a volume of leads and get more, uh, high quality, low volume, and start to really hone these in. I think we should follow up about this. 

David Lemmon
For sure. We’ll have some feedback on that as well. So I mean, it, again, we’re custom, right? Like we’re an agency. So if you go to the event company, this is the event they sell. If you come to us, let’s make an event, let’s come up with one ourselves, you know?

Andrew Street
Right. It doesn’t take forever. It takes five minutes to come up with something. But it’s a little more deliberate and smart based on what your store needs. Exactly. Uh, I, I don’t have an intro or an outro for this, but David, how do people get in touch with you? 

David Lemmon
Uh, really easy. LinkedIn, uh, or dave@dealeromg.com

Andrew Street
Sweet. All right, guys. I’m Andrew. We’re signing off.