Digital Dealer - July 2019 - 47

Road Trip to DD27 | AUG 19-21, 2019 | Las Vegas

DD27

SA LE S & VA R IAB LE OP S : C R M

FEATURED SPEAKER
By Sean V. Bradley, CSP
Founder & President,
Dealer Synergy

The Real Cost
Per Lead, Wasted
Spend, & How
to Boost ROI
with CRM
According to the
National Automobile
Dealers Association, the
average franchised dealership spends approximately
$61,500 in advertising and
delivers approximately 96
units per month, with an
average cost per sale in
advertising estimated at
$640 per car sold. That
means that the average
automotive sales consultant
delivers approximately 9.6
units per month.
Let's pause here; If you
invest $61,500 in one month
and deliver 96 units, and
the average cost per lead
was $640 per car sold, that
would mean that every
single sale was directly attributed to marketing/advertising spend. It's unrealistic
to believe that a Chevrolet
dealership in NJ (as an example) did not generate buyer interest simply by being
a Chevy dealer. Now, also
consider some of the other
situations outside of marketing/advertising that may lead
a buyer to a particular store.
Here are a few examples:
 A buyer decides to buy

from ABC Chevrolet simply
because it was the most
convenient with the dealership based right around the
corner from his/her house.
 A buyer with low credit
that goes into car buying
with a 'spray-and-pray'
approach, just hoping that
someone will get them
approved.
 Prior customers that
have purchased a vehicle
before from ABC Chevy,
who even if the dealership
does nothing or very little to
stay in contact with them,
still come back there to
purchase again.
 What about referrals?
If the average dealership
has 10 sales consultants,
3-4 managers, service
personnel, office personnel,
it's highly unlikely that no
one ever buys a car based
on knowing someone who
works in the dealership. I
can go on and on with this,
but I think that you get my
point.
After speaking with numerous dealerships about
this, I estimate that "average
cost per sale in advertise-

ment" is not $640 but actually closer to $1,230. Which
to me is unsettling because
sometimes dealers don't
even gross that much on
a sale! The problem is that
most dealers only calculate
what they spend and what
the sell, but rarely do they
forensically dissect true ROI.
So, out of the 96 units
that the average dealership
delivers, I believe an estimated 46 units did not come
from the money invested in
the marketing/advertising
efforts. This means that
dealers are overspending
with marketing/advertising
vendors (online classifieds,
website providers, SEO/
SEM companies, etc).
I'll give you an example.
I was just on-site at a three
roof-top dealer group in
Louisiana. BMW, Mercedes,
and a used car superstore.
These people are personally
super awesome and just trying to sell cars and support
their community, but when I
audited their marketing ROI
for their Mercedes store,
I could not believe what I
found. They were spending

D I G I TA L D E A L E R . C O M

approximately $9,438 per
month on:
 Their OEM-recommended website provider
 An SEO/SEM / social
media company
 A third-party API on the
website to convert traffic
Their total lead count for
the month was only 20 leads
from both email and phone
ups! That is $472 per lead not
"per sale" - per lead!
Here is what I am getting
at... Dealers overspend in
large amounts when it comes
to marketing and advertising
when they really can cut
back spend, and optimize the
CRM technology they already
have, to increase sales and
with great ROI. CRM platforms are largely underutilized and/or used incorrectly,
often due to poor setup, lack
of company-wide training,
and accountability systems.
THE COST SAVINGS BY
REDUCING MARKETING/
ADVERTISING SPEND:

If the average dealership
simply cut 25% of its marketing budget, approximately
$15,375 per month for one
year, that equals $184,500.
Now, let's explore the
added sales revenue that
results from proper setup
and integration of a CRM
system. Dealers that set up
their CRM correctly and train
everyone in the dealership
from executive management,
middle management, sales
team to Internet / BDC, etc,
on how to use it effectively
(and hold them accountable),
can expect a 'Net Lift' of 20 30 units per month.
Here is the logic:
 The average sales
Continued on pg. 48

J U LY 2 0 1 9

47
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Digital Dealer - July 2019

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