I’ve been told it’s too complicated for Dealers to grasp

My guys in the field and everyone else tell me that dealers understand UPs, Traffic and volume.  They don’t understand Market Share, Point of Diminishing Return and Out-performing their brand.  I’m told ‘It’s too complicated’.

I’m not giving up.  Three concepts that need to be applied to marketing dollars are essential even though I appear to be shouting in a vacuum.

Simply put:

Point of Diminishing Return: You spend 1 dollar, you make 2 dollars.  You spend another dollar, you make 2 more dollars.  You spend a third dollar and you make 75 cents.  You have passed your point of diminishing return.

Market share:  There are 10,000 vehicles sold this month in a 15 mile radius of your store.  You sell 200 – that’s 2% market share.  The next month, 12,000 vehicles are sold in that same 15 mile radius and you sell 220 – your market share that month is 1.83%

Out-Performing your Brand:  Over the last 6 months your brand’s market share in the same 15 mile radius of your store goes up 2% for those 6 months.  Your market share goes up 5% during the same period – You’ve Out-Performed your Brand.

I can break all of this down more comprehensively, but this is the simple introduction to market performance and dollars you spend on advertising.  Hopefully this might start an intelligent conversation that goes beyond UPs, Traffic and Volume.

These are the reasons I am so adamant about the concepts above.

  • Your dealership does not control the market.
  • You only can get a piece of what is out there.
  • You don’t control the demand for your brand.
  • You shouldn’t be spending money on marketing that goes beyond your point of diminishing return.

About dealerite/in association with AP Level 4

National affiliations of professionals who are engaged in changing the culture of the automobile retail business. Associated with AP Level 4 and Edifice Group. These companies are bringing sustainable marketing which has proven quantifiable improvements in a dealer's market share performance
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