I’ve often addressed how to maximize your ad dollars, how to get the most from your customer database and how to differentiate yourself from your competition in your customer's mind. All of these issues have a direct impact on your sales. What I have come to realize over time is that dealers are so busy making a living, they do not have time to focus on making money.
Your main goal is to sell cars this month without any consideration towards next month, next quarter or next year. I understand there is a great deal of pressure to achieve short-term goals, but I believe you can still reach those goals – actually, you can reach those goals sooner – while planning your future.
You cannot manage what you cannot measure. You cannot master what you cannot manage. You cannot multiply what you cannot master. These are the four skills companies must practice to gain the kind of success required to be leaders in their industries. You can apply these skills to any segment of your business, but today, let’s focus on your advertising dollars.
Twenty-five percent of all the money you spend on advertising, at a minimum, will not work. The problem is, unless you implement proper measurement tools, you will never know which 25 percent is being wasted. According to NADA, car dealerships spent an average of $610 per car on advertising in 2007. I really don’t know where NADA gets this number and it is really misleading. Dealers spend far greater amounts to sell a car. Nonetheless, during times when dealerships are struggling to make a profit, even this amount is a lot of money. Advertising results change every day for many different reasons. So while perfection is out of the question, advertising results can be very predictable.
Some of you are probably skeptical about my ability to measure wasted advertising dollars. Maybe you even believe that you have this under control and do not waste any money. To you, I offer this challenge: Let me monitor your advertising for 30 days using my measurement techniques. I will not change any of your advertising. I will just watch and measure. Use your agency, the same ads and the same media. At the end of that month, I will provide you with a free evaluation under one condition. After I show you how much money you are wasting, let me interview you for my next article. If you are up to the challenge, send me an e-mail to [email protected] and let's get started.
Once you are able to measure your advertising, you are ready for Step 2: Manage. Suddenly, you will realize which aspects of your advertising work and which do not. From entire campaigns, to radio or tv stations, to time periods, you will know right away what works. With this knowledge, you can now make your initial adjustments. Cancel what does not work and buy more of what does. Then, measure some more.
Through practice of steps one and two, you will become a master of advertising, predicting results before a campaign even begins. You will become more aware of advertising messages and ways to reach your target audience, and you’ll become a master of where and when to advertise.
The final stage, multiplying, is my favorite skill, but it is the scariest for most people. Every client I have ever worked with is scared to increase the advertising dollars they spend. I believe this is because they do not fully understand the other three skills discussed above. You see, multiplying is the easy step when you apply the other skills, because you know how your advertising dollars can be the most beneficial.
By practicing all the marketing skills outlined above, you will become more aware of your company’s needs and better understand how to implement your advertising campaigns. With these simple changes, you can improve your current business situation without doing anything else. The Four Ms of Marketing will help build a better business, this I will guarantee.
Special Finance Insider Vol. 2, Issue 6