As always, accountability and tracking play a major role in determining your true cost per car sold. Put a different phone number on anything and everything you run. Call response is your first indicator. Starting from the top down, use a call tracking service; then, move downstream and look at your customer base. Drill down the repeat business, drive-by traffic and referral business as best you can. These areas are never going to be an exact science. Assumptions will have to be made, but it will still get you closer to the true cost per car sold than just taking your advertising budget and dividing it by total units sold.
Distinguishing direct advertising sales from sales generated by repeat, drive-by, and referral business is critical for you. I suggest you begin to make assumptions right now as I have done in the table above. I normally dismiss asking your customers how they heard about you, but in this case, it will help. Go ahead and do it. Never use it as a barometer to determine which of your multiple advertising mediums and campaigns work best. However, let your customers guide you when it comes to making assumptions about your true cost per car sold.
You may find out that 60 percent of your business is generated by repeat, drive-by and referrals. If you are in a great location, this may be the case. If you are at $800 or $1,000 per car sold, it doesn’t need to be a cause for alarm because these are numbers are not all that uncommon. Moreover, you need to get closer to the truth if you are going to make your advertising more efficient. Before you figure out which campaigns, promotions and programs work better for you than others, you have to figure out if anything is working at all.
To consider which customers buy because of an offer or promotion versus referral, drive-by and repeat may seem like the most basic analysis in advertising and marketing. It may be, but it is an area to monitor and take very seriously. Get back to the basics. This time make sure you get calculate an accurate cost per car sold because it really is the most important number in automotive marketing. Even the guy who was knocking my leads at the convention knew the importance of this concept. However, he just didn’t know how to get to the true number. Now you know how!
Vol 5, Issue 2