One of the questions I received from one client was:
“Sean, how do I know what strategy to start with using your marketing strategies?”
And
“How do I know if my dealership can be helped with marketing?”
Well, here’s a roundabout answer…and it explains what you REALLY need to think about instead of being misled by a consultant or marketing rep.
There are 7 specific measurements I like to look at that helps me “objectively” coach my clients on the “Strength” of their dealership!
Here are 2 of them:
1. Referral Ratio: you may be thinking to yourself, “What is referral ratio?”
This is simple…and you ‘really’ only need a general ball park. Don't worry about 100% accuracy....
Simply take the total number of referrals you received last year and divide it by the total # of actual customers you had.
Example1: 300 referrals/ 1200 actual customers = 25% referral ratio.
This is “GOOD”, not great…but a good starting place.
Example 2: 120 referrals/ 1200 active customers = 10% referral ratio
If you fall in this range you have some MAJOR improvements to do. The good news is that at least you now know it…and we can go to work on it.
If you hit below a 30% referral ratio, then you would list it as one of your strategic objectives to improve on over the next 3 - 12 months.
If it is below 20%…then it is critical! You need immediate action!
2. Value of a New Customer!
Why You need it? You want to know what a customer is worth to your Dealership. But when first getting started, keep it simple.
The reason you want it is that it will tell you how much profit you are generating per each customer.
This will tell you: “What your Return on Investment Is Per Customer” or ROI
If the cost to acquire a new customer is $300…and your customer value
is $1500…then you know for every 1 dollar you spend…you get approximately 5 back.
That is a good start.
If your ROI is 3:1 or lower, then you are in DANGER…and need to bump it up ASA.!
Either way, even if you have a higher ROI. You are ALWAYS looking to improve this!
Value of a customer is a thing that you will never stop trying to improve. Okay?
Here are some simple steps to increase your customer acquisition ROI
1. increase referrals per customer
2. Bring in more service and improve customer spending
3. Improve your new customer experience
4. Start a customer newsletter so you are communicating with existing customers.
5. Offer more tailored services
There are more ideas, but this gives you a VERY good start!
Looking for more ideas to increase your success: Go to http://www.automarketingprofits.com/automotive-marketing-books.html
to order "52 Free / Low Cost Marketing Strategies Guaranteed to Attract New Customers & Clients Into Your Auto Dealership In Any Economy".
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