Pub. 12 2013-2014 Issue 1

N e w J e r s e y C o a l i t i o n O f A u t o m o t i v e R e t a i l e r s S p r i n g 2 0 1 3 16 new jersey auto retailer Measuring the Return on Investment of Online Efforts By Michael Roppo A re online efforts becoming the new black hole of dealership advertising dollars? Money is just sucked in by the gravity of “needing to do something” online. If you are a typical New Jersey dealership and spending over a million dollars on advertising, $250,000 of that is likely going to online marketing. Are you getting a good return on that investment? If that question is difficult to answer it may be because, in all the effort of signing up for a dozen digital marketplaces and lead generators, you forgot to first determine WHAT you are going to measure in order to justify the ROI on these efforts. While impressions and traffic are all good things the only measurable we can use to determine a solid lead, is whether or not that lead turns into a sale. For example, one area where many dealerships invest their online dollar with the various marketplaces is to be a featured dealer outside of their local market. This comes at a premium but if it does not result in a greater number of leads what good is it? Does that premium expense result in a premium lead? While every store should have, and will have, benchmarks that are tied to their market, past performance and quality of staff, below is a simple guide that works for most stores: • Half of the leads generated will result in an actual human contact. • About half of those contacts should result in an appointment. • More than half of those appointments should actually show up. • Your normal closing rate takes over from here, but let’s assume you can close 20%