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Avoid the Bermuda Triangle of Automotive Sales & Marketing

Bermuda continues to be a wonderful destination to visit; however, the area is famous for the mysterious events that have taken place over the years.  Airplanes, ships and people have vanished without explanation.

Is your dealership in jeopardy of becoming part of the Automotive Bermuda Triangle?

In so many meetings, people ask me, “How much should I spend on my automotive digital marketing?”

While your pay per click and social media budgets are important, what’s more important is how many new and used cars you have on ground, how many motivated sales professionals work for you (emphasis on “motivated”) and how all three numbers tie together.

If  your numbers are not triangulated properly you run the risk of being one of those dealerships that gets lost at sea.

3 factors in your dealership’s digital marketing triangle.  This is where sales operations meets automotive digital marketing. Your dealership needs 3 key items to help you sail past your competition:

  1. Personnel:  A good rule of thumb is for each motivated sales professional, you should expect 10 cars per month.

  2. InventoryApproximately ½ of the total number of cars you have on ground to start the month will be your total number of sales to end the month.

  3. Website visitorsA good goal is 10,000 website visitors with a 2% closing ratio.

You need the correct campaigns with Google, Yahoo, Bing and Facebook in place to help drive customers to your virtual showroom and ultimately to your dealership. For more details on what I call the Moneyball factor you can click here.

Bringing it all together.

Need a real world, working example.  Here’s a dealership that developed a plan that helps them to avoid the potential pitfalls of the Bermuda Triangle.

  • Side 1= 20 sales professionals selling 10 cars per person = 200 sales
  • Side 2= 400 new and used cars on the ground = 200 sales
  • Side 3= 10,000 website visitors that drive a 2% closing ratio = 200 sales

 

Nobody gets lost at sea.  The game plan is on point.  We will sell 200 cars this month!

Take the same scenario with only 10 sales professionals and you will only score 100 sales. You do not have the personnel to close the deals.  This may seem clear to some, but many of the people I meet with miss this all-important aspect.  Many General Managers will believe they’ve hired “closers” so they can get to 15 units per person.  It just doesn’t happen.

Take the same scenario with 20 sales professionals and only 300 cars on the ground and you will run into similar difficulties created by a problem with a different part of the triangle.  The likelihood is you will sell closer to 150 units than 200 units due to timing, PDI, recon and the like.  It’s not only having the car, but getting the cars front-line ready that creates timing issues.

Only after you have taken care of the personnel side and the inventory side of the equation should you begin to worry about how much you should spend on advertising.  Without the first two pieces of the puzzle in alignment, I wouldn’t spend a penny.  It’d be like throwing money into the ocean and hoping that it wouldn’t get lost at sea among all the other dealerships out there.

Views: 138

Tags: Digital Marketing, Jim Flint, SEA, SEM, Sales Operations, Search Engine Advertising, automotive marketing

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Comment by Doug Davis on December 13, 2012 at 8:07am

Jim, Good post and to the point.  This is information that too many don't what to hear.

People, Product and Prospects have been essential elements, to move numbers, from the beginning.

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