Don't Spend $5 to Solve a $1 Problem!


When I was still a dealership Internet manager, we had an expression that we used a lot when we were talking about problems. “Don’t put a five-dollar solution on a one-dollar problem,” meant that we didn’t want the cost of our solution to be more than what we would gain by solving the problem. I’ve been thinking about this a lot lately when I’ve been looking at BDC and SEO expenses for some of our new clients.

In one analysis I did recently, a very aggressive small dealership group was spending $16,000 a month in SEO, website media promotion, website pop-ups, and third-party lead providers. The good news was that they were getting a lot of website traffic, and for the past six months their Internet/BDC team was averaging almost 80 appointments a month, with an average of 42 of them showing up and 23 making a purchase. The Dealer and GM were generally happy, but they were wondering if they should put some more money into additional lead sources, or add some expanded SEO programs that their OEM was promoting.

Once we took a careful look at all the numbers and did some analysis, we strongly encouraged them to take a hard look at their BDC/Internet training and sales process before they put any more money into their digital advertising budget. They agreed, and we put together a solid program that included additional training for their BDC reps, rewriting their Internet response email templates, freshening up their phone scripts, incorporating more text and chat in their follow-up process, and revising their follow-up schedule – along with revising the BDC rep pay plans to be more results focused.

The improvement in results was dramatic after only a few months. We had suggested that they drop a couple of their third-party lead providers that weren’t generating enough quality leads, so they brought their monthly expense down from $16,000 to $14,300. With the help of better trained reps using higher quality templates, scripts, and follow-up, they were now setting an average of around one hundred appointments per month, over 70 of them were showing up, and they were selling over sixty percent of them for 42 sales a month. So instead of spending $695 per delivery on 23 sales, they were now spending only $340, and their Internet generated sales were up 19 cars per month - over eighty percent.

What changed here? Well, several things: better trained reps with better email, text, and phone tools like templates and scripts will do a better job of influencing the better-quality Internet prospects. The best Internet prospects can be demanding in their communications and requests, but if your team knows how to work with them the right way, not only will more of them show up, but a much higher percentage of them buy when they visit the dealership.

It’s easy to get out the checkbook and buy more leads or spend more on digital promotion. Every day, dealerships are getting inundated with “the new best thing ever,” that are supposed to bring them more sales. The reality is that spending more on promotion and lead sources will only bring you more opportunities. And while it’s important that you not get left behind in the digital road race, it’s even more important that you have the best possible people and process in place to manage the opportunities that you’re getting. If you don’t, you’re going to end up with a lot of your budget going to waste, and that's never any fun.  Making an investment in having a team and a process that can convert your opportunities into visits and sales will always put money in the bank.