Nate Tilley argues car dealerships should measure ad success by cost per car sold, not lead volume. Spend $300 to get 60 leads at $5 each and sell one car for $3,000 gross profit: that's 10x ROI. One more sale cuts your cost per acquisition in half.
A lot of car dealerships are tracking the wrong metrics when they're looking at their advertising. You guys get super caught up on how many leads you're getting and then the percentage of those that are actually closing. Okay, but if you're looking at social media leads, where volume is the strategy, this is the complete wrong way to do that. For example, let's say that you're getting leads for $5. You spend $300 on your ads, and you get 60 leads. Well, if you only close one deal from that, then you might say, Well, I got 59 leads that didn't convert. My closing percentage is terrible. I hate this. But you're not thinking about your cost per car sold. Spent $300, and then you make back $3,000 gross profit. That's a 10x ROI right away. All you have to do is go out there and get one more deal, and that drops your cost per acquisition now to $150 cost per car sold. So it doesn't matter how many leads you get that don't buy. It only matters how many leads you get that actually buy. If you want to see more about this and how we've lowered the cost per sale consistently for a lot of different dealerships that we work with, click the link below. I got a free training and I'll see you over there.
