December is the busiest time of the year for the auto industry, which can make or break your year. This is also the perfect time to review your annual marketing budget. However, more often than not a dealer does not review their budget until mid-January, or worse just once monthly. If you do not have a plan of action in place to review quarterly results, it can make it that much harder to make the right business decisions for the year ahead. Not to mention, with the talks of there being a recession it is all the more reason to have an effective, proactive marketing plan in place. Here are some of the top things to consider when reviewing your marketing budget.
Review A List of All of Your Vendors. Do Not Look At the Results Individually. Consistency is Key to Understanding What Your True ROI is For the Year.
It is easy to look at one or two reports and make a decision; however, that is not the best way to make a decision when it comes to using the vendor. The other familiar dealer approach is calling in the GSM or Sales Manager who does not use the product, asking their opinion, which also might not be the best approach to reviewing the vendor. Instead, one of the ways to combat this issue is to survey the dealership. That is asking the employees if they have even heard of the product or if they use it. If they are not using it, then there is a breakdown with your management that needs to be addressed.
As for reviewing the ROI, it is best to look at the dealer's annual performance, which can get tricky when it comes to lead attribution. By that I mean, a customer might have converted off of a few third party sites, but in the CRM it attributed the sale to the last source the customer converted from. That said, there are ways to review the various lead sources the customer converted from seeing what the most common duplicate sources are.
It is also nothing for a dealer to switch a contract with a vendor monthly, which can make it quite difficult to track a true ROI on the vendor. That is not to say that it is not a bad idea to cut a vendor. The reason for cutting the vendor, however, should be more than “we just do not think it is a good idea to continue to work with them because we are not getting enough leads” But this tends to be the case on the dealer level. Instead, take the time to review the reporting they offer. Take that reporting and match it against your CRM. In doing so, you will see the following:
Duplicate Lead Sources: It is not uncommon for the vendor to say that you had “x” amount of phone calls and “x” amount of internet leads (as mentioned above). I will never forget the time where my last GM thought I was ‘deleting’ leads because they were not showing as ‘individual’ leads in the CRM. I had to explain that while both the phone call and Internet lead were in fact in the CRM - the customer had previously converted off of our website. That said, the lead that received credit was the latest lead, which happened to be an inbound phone call from a third party site.
The lead did still show the customer converting multiple times with the inbound phone call being the last lead reported. That said, when reviewing the vendors report they were correct in regards to the fact that one of their leads did sell. However, when looking at the CRM globally, you have to take considering how many sources contributed to the sale. Once you start to compile all of the sources (many CRM’s have a report for this) you can start to pull trend reports on how many ‘duplicate’ not just sold, but what source was duplicate, and did the customer already have an appointment booked on the original source. If that is the case, the last lead might not carry as much weight. But on the flipside, if the customer had not otherwise made an appointment or contacted the dealership then perhaps the lead is more valuable than it was first thought. That being said, you cannot simply look at vendor reports without comparing them to the CRM.
Empower Your Marketing & BDC Manager. Why Have a Marketing or BDC Manager if they Cannot Make Decisions?
This is not saying that they have free reign on all aspects of the budget. However, if the Marketing or BDC Manager does not have a say or ability to make a decision then what is the purpose of their position? If there is a budget in place, and a list of the vendors they are working with then let them work with it. It is equally important for the GSM to work with the marketing and BDC Manager. By working together on the marketing budget the GSM can review their annual goals, monthly goals and what marketing they need to boost their sales. Otherwise, what usually happens is the GM looks at very high-level reporting - not having all of the details in hand - making decisions that can have a negative impact that was otherwise not thought of during their review.
Bottom Line: it sounds best to push the marketing plan to the next month (January) because that is what is the norm, but at the end of the day by starting delayed it can wreak havoc. Causing the marketing plan to be a month to month decision. Moreover, while that might seem to work in the long run it is harder to be proactive; as much of the decisions made on a month to month basis are reactive. Reactive decisions to not allow you to look and review the full picture. Not to mention, waiting until the end of January to review the next years budget means that you will not have a plan in place until mid-February, which is right before the March rush. Whereas had you planned in December - you will be prepared for March allowing you to focus on stronger marketing in January and February which are historically slower months.
When do you plan your marketing budgets? Do you allow your Marketing or BDC Manager to be apart of the discussion? If not, how do you empower them to improve their efforts besides telling them to book more appointments?