How Do You Measure Internet Lead ROI? - Automotive Digest

How Do You Measure Internet Lead?ROI?

By Josh Vajda

We recently con?ducted a sur?vey in which we asked Inter?net depart?ment per?son?nel to share some key met?rics. In one ques?tion, we asked: How much total gross does your Inter?net depart?ment gen?er?ate for every $1,000 spent on Inter?net leads from all sources?

The answers we received revealed that there is quite a large dis?par?ity between auto deal?ers? return on invest?ment (ROI) on Inter?net spend?ing, as well as a sur?pris?ingly large per?cent?age that don?t even know their ROI. So I wanted to know: what should a deal?er?ship tar?get for a rea?son?able Inter?net mar?ket?ing?ROI?

One of the experts we con?sulted for mea?sur?ing this met?ric was David Kain, Pres?i?dent of Kain Auto?mo?tive. He sug?gested that 5X ROI was the absolute min?i?mum that a deal?er?ship should strive for, and ide?ally Inter?net depart?ments should be see?ing 7X ROI on their Inter?net?spend.

But how do you cal?cu?late your ROI? Basi?cally, ROI is what you get for what you spend. Here is a sim?ple for?mula: (Gross Profit ? Mar?ket?ing Invest?ment) / Mar?ket?ing Invest?ment =?ROI.

This for?mula rep?re?sents three?steps.

1. Mar?ket?ing invest?ment should be sim?ple to fig?ure out as it is the total cost of a cam?paign. For instance, if you spend $1,000 per month on a Pay-Per-Click cam?paign, $1,000 per month on inde?pen?dent leads and $1,000 per month on a sub?scrip?tion site, then your total mar?ket?ing spend on Inter?net leads that month is $3,000. For the sake of sim?plic?ity don?t worry about includ?ing labor costs (for staff), web site main?te?nance costs, etc.

2. Gross profit is the next met?ric you?ll need to fig?ure. If you can pull the actual grosses on all Inter?net deals, that?s great. If not, take the num?ber of sales and mul?ti?ply it by your dealership?s aver?age front and back com?bined gross prof?its. So if $3,000 in mar?ket?ing spend deliv?ers 10 sales at an aver?age of $3000 com?bined gross, then your total Internet-related gross profit will be $30,000.

3. Next, you need to sub?tract the ini?tial mar?ket?ing invest?ment ($3,000) from your gross profit ($30,000) for a total of $27,000.

4. Divide that num?ber by your ini?tial mar?ket?ing invest?ment ($27,000/$3,000) and in this sce?nario you end up with 9X ROI, an excel?lent result.

Why is it impor?tant to know your ROI? Any time you spend money on any?thing, whether on Inter?net leads or a mar?ket?ing cam?paign, it is an invest?ment. Like any invest?ment, it should be mea?sured, mon?i?tored and com?pared to other invest?ments so you know where you should be spend?ing your?money.

Josh Vajda is Direc?tor of Inside Sales at AutoUSA Inter?net Sales Solu?tions and can be reached at vajdaj@autousa.com.

Source: http://automotivedigest.com/2012/09/how-do-you-measure-internet-lead-roi/

Ledecky Nadia Comaneci Rebecca Soni Snoop Lion big brother London 2012 Table Tennis badminton