Far too frequently those in charge of dealership marketing decisions rely on one of two things: peer conversations/feedback, or data from a vendor showing results from a comparable dealership.

While both can be valuable in the right situation, the problem is that not all marketing solutions are effective when used in different markets. What works great on the East Coast may not work well on the West. For example, population density can affect what form of marketing works. The biggest issue, however, is that by “following the pack,” you never get ahead of anyone. You simply maintain the status quo.

The automotive industry is incredibly dynamic. Look at all the technologies available to your dealership. Those dealerships which take risks with new technologies and marketing solutions tend to benefit greatly and pull ahead in the race against competitors. However, there is an inherent risk with anything new and, the opposite can happen; that marketing investment could fail. Instead of pulling ahead, you could lose money.

So, is there a way to safeguard your investments while testing and adopting new high risk/high reward technologies?

I recommend that you place ninety percent of your marketing budget in safe marketing strategies. Choose those which have proven effective with a good return on investment in the way that matters most -- selling vehicles.

The other ten percent should be used to experiment and try new things, adopt new technologies and take risk. When those high-risk solutions take off, prove effective and are adopted by the masses, they typically tend to get less effective or more expensive. As an early adopter, you can get that lead and then keep it.

If the new thing reaps high rewards, it’s relatively easy to take that solution and transfer it into your ninety percent bucket, freeing up money in the ten percent bucket to try even more new things.

Okay, so once you get to this point, how do you know what is working and what is not?

Well, that is probably the most important point in all this. And the most important thing here is which KPIs you choose.

The thing NOT to do is to take the mountain of reports provided by your marketing vendors. The KPIs they choose may not perfectly align with your dealership’s marketing goals. Most vendors choose the KPIs THEY feel prove their solution is successful in your dealership. But who defines what is, or is not successful? Typically, the vendors!

A better way to judge performance is to look at outcomes and work your way backward. If you judge your vendors by cars sold, or profit per lead, you can create a common thread that is shared by both your business and your vendors. These KPIs hold both your vendors and your dealership accountable -- a win-win. The most important goal for any car dealership is sales and profit across all departments – not if your vendor said the marketing was a success. Then use A/B testing to measure what performs the best. This allows you to identify solutions that benefit each other while maximizing your investment in those solutions.

In summary, identify KPIs that complement your dealership’s goals. Define what measurements within those KPIs equal success or failure and then test strategies within any given solution across the marketing spectrum of all your marketing channels. This will maximize your marketing spend, optimize its effectiveness and hold your vendors accountable for performance metrics that matter to your business. This way the vendors win too!

Views: 44

Comment

You need to be a member of DealerELITE.net to add comments!

Join DealerELITE.net

Latest Activity

Crystal Hartwell posted a blog post

SureSale Certified, the Gold Standard for Quality Used Vehicles and Purchase Protection, Expands to Louisville

SureSale enters the Louisville market with certified used vehicle program that offers consumers…See More
1 hour ago
Michael Trasatti posted a blog post
6 hours ago
Michia Rohrssen posted a blog post
6 hours ago
Simon Hopes posted a blog post

Things you need to know before you buy Mahindra XUV300

A lot of people fall for the bigger, stronger and more masculine look in the cars. However, this…See More
13 hours ago
Walter McNulty posted a video

Preferred Dealer Solutions 07/12/19

The many #1 in the industry products we offer.
Friday
Scot Eisenfelder posted a blog post
Friday
Jim Flint posted a blog post

Digital Ad Budget Allocation

In this video blog, Jim Flint, CEO, and Founder of Local Search Group discusses advertising spend,…See More
Friday
Simon Hopes posted a blog post

What happens in the world of construction equipment?

Komatsu Europe launches PC360LCi-11 hydraulic excavatorSince its introduction, the intelligent…See More
Friday
Terrel Watkins posted a blog post
Friday
Dave Anderson posted a blog post

Mission Unstoppable Seat Giveaway

Don't miss this opportunity to attend Mission Unstoppable free, and gain strategies on developing…See More
Thursday
Jeff Cowan posted a blog post

Write Service Podcast: Episode 69- Service Advisors Hitting Their Goals? Time to Re-Evaluate and Re-Train!

This week, Jeff discusses the important topic of goals. We are at the halfway mark, so it's time to…See More
Thursday
Walter McNulty posted a status
"Start the 3rd Quarter Strong with the best traffic driving mail in the industry. There is still time to have a Staffed Sales Event."
Thursday
Walter McNulty posted a video

July112019PDS

Start the 3rd Quarter Strong with the best traffic driving mail in the industry. There is still time to have a Staffed Sales Event. Contact Us Today. www.pds...
Thursday
Jeff Giere posted a blog post
Thursday
Ed Barton posted a blog post
Thursday
Erik Nachbahr, CISSP posted a blog post

Warning: BlueKeep Malware Could be as Bad as WannaCry

Dealers, do your computers still run the Windows 7, Windows XP, Windows Vista or Windows 2003…See More
Wednesday
Dave Anderson's blog post was featured

Make Your Own Momentum!

Momentum is a powerful force that can work for you or against you. When you have it, things can be…See More
Wednesday
Walter McNulty posted videos
Tuesday
Crystal Hartwell posted a blog post

CULA Makes Vehicle Leasing Seamless For Credit Unions

New 'Seamless Lease Connection' from Credit Union Leasing of America streamlines the lease…See More
Jul 9
Dave Anderson posted a blog post

Make Your Own Momentum!

Momentum is a powerful force that can work for you or against you. When you have it, things can be…See More
Jul 9

Get Newsletter

© 2019   Created by DealerELITE.   Powered by

Badges  |  Report an Issue  |  Terms of Service