Effectively Managing Your Advertising Budget

In many dealerships, determining the true success of a marketing campaign or advertising source is difficult at best. While this is often the case it really is not as complicated as many dealers and managers think. To determine the effectiveness of a campaign you must have consistent tracking mechanisms in place and discipline. Once you accumulate date that enables you to determine the success rate of various sources of advertising you are able to apply this knowledge to the management of your advertising budget.

How do you track and accumulate the necessary data? What procedures must you have in place to prevent “contaminated” data? How do you forecast and budget your advertising dollars to maximize their effectiveness? Let us first start with the basics.

Before you spend one additional dollar for advertising you should insure you have a detailed tracking system in place. At a minimum this system must be able to capture the following data:

Customer’s name and phone number
Method of inquiry – phone call or walk in
Source of inquiry – newspaper, radio, television, direct mail, etc. If you advertise with multiple providers within these sources capture that data. For instance, if you advertise on two radio stations, have the customer identify the specific station.
Brief description as to the outcome of the inquiry.

The collection of this data must be complete and consistent. You must count every phone call and every customer that enters your lot. We referenced “contaminated” data. Make sure the scorekeeper or person tracking this data is diligent in determining the source of the customer inquiry. For instance if a customer claims to have responded to a television ad, you must determine what station. The same goes for radio and print. Determine the real source. Don’t let a salesperson enter “radio” for the majority of his or her calls just because that salesperson likes radio advertising. If this occurs, the result will be contaminated, meaningless data.

Many dealers will appoint or designate a third party to count and track this data. For instance, a receptionist or greeter may be charged with the task of tracking the above data for every customer inquiry. This person will either capture the data before transferring a call to a salesperson or have each salesperson register and “log” a lot up after the customer leaves the dealership.