Pub. 3 2013 Issue 3

18 AUTOMOBILE DEALER NEWS ILLINOIS www.illinoisdealers.com I BM released a separate report in October 2011, where 62 percent of the automobile executives who were surveyed said they don’t use the new technology because they don’t understand it, and another 68 percent said they felt unprepared to deal with social media. It doesn’t have to be that way. You can do a lot bet- ter than avoiding the technology or spending money without knowing what you are getting for it, especially since it tends to be a lot of money. Many dealerships spend as much as a quarter of their budget on just this one category. What you need to know is actually very simple: what is the return on your investment? You want the cost per sale, not the cost per lead. Every dealership is different, but suppose your dealership uses the following guidelines: • Your dealership will have a certain number of leads. Suppose your staff contacts half of them. • Of that half, another half will end up making an appointment to meet with someone. • That appointment will take place more than half of the time. • A few people will buy a car. Just for the sake of illustration, let’s suppose it’s about 20 percent. The cost per sale at the best stores is less than $200. At good stores, the cost per sale is less than $300. If you had 300 leads and you work down the list, that turns out to be about eight buyers. At $200 per sale, the cost per sale is $1,600; at $300 per sale, the cost per sale is $2,400. Of course, the numbers at your dealership may be different, but you can see what the methodology Weighing the Return on Investment (ROI) for Online Advertising BY SUSAN MORGAN , THE NEWSLINK GROUP, LLC Incredibly, a November 2011 report showed that 40 percent of all car dealerships have no idea what the ROI is when it comes to spending marketing money on the Internet.