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Derrick Woolfson

Derrick Woolfson Business Development Manager

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Stop Spending Money With Vendors That Do Not Work!

Unless you look at your dealer’s marketing budget regularly, you would be surprised as to just how many vendors your dealerships work with! Everything from the CRM, Digital Marketing (websites, lead providers, AdWords), & Traditional Marketing (mailers; TV Ads, Radio, & Mailers), to name a few. All of those vendors’ fees, along with your actual ad spend adds up. So we have to ask ourselves, do we really know what we are spending? Instead of worrying about how much you are spending with each vendor,  focus on what is getting results. Stop hanging onto to a vendor for the sheer fact of “you have known them forever, we cannot cut them.” If they are not generating revenue, they are not doing you any favors. If anything, you are doing them a favor by giving them money every month. 

Here is an example of a monthly Budget and key takeaways.

Monthly Marketing Budget Sample - OEM Franchise - One Store



Monthly Cost

Annual Cost

Marketing Company



AdWords Budget



TV Spend 






Lead Vendors



Social Media AdSpend



Total Spend: 



Looking at the above budget, which is solely an example, and in many cases, dealers spend more than the above per store every month when it comes to marketing expenses. So what should be getting your gears spinning is that if you are averaging $1,250 front-end gross on a new unit (after OEM Kick-Backs, etc.) & $2,000 front-end gross for pre-owned, it will take more than 110 units to simply recoup the costs of the above marketing plan. And that is only paying back the vendors. That, of course, does not include the costs of commissions, dealer packs, operating costs, amongst other expenses. That said, rather than continuing a partnership for the sake of it - take the time to honestly review your current marketing initiatives. 

What to Consider When Reviewing A Vendor Partnership 

It is no secret that in our industry, it is difficult to define lead attribution where there are multiple points in the process when the customer converts - on multiple platforms, whether that is click-to-call, lead-form, etc. That said, most, if not all, CRM’s allow you to check all of the lead sources attributed to the lead. The purpose of doing so is to see how many leads you are getting from each lead source. If you are selling a decent amount of leads and are otherwise recouping the costs, then it obviously makes sense to keep the lead vendor. 

However, if the quality of leads is not there and it is not making you money, then why are you paying them?! It does not make sense. And let’s forget about the age-old argument “if you stop advertising with us, you will not get as many phone calls.” This argument was arguably before dealers could easily create their own tracking lines and easily review the actual results from the campaigns, etc. There is far more transparency when it comes to analytics. 

Less is More. Spend More On What Works! 

Imagine cutting your budget by ¾ and still getting the same results, and even perhaps getting better results. One of the ways you can easily do this is cut a third party lead source vendor, especially ones where you have to pay a flat rate no matter how many or little leads you get, and you have zero control on the targeted audience! And spend that money on AdWords or Display Ads! Ads that your dealer can control not only the audience but the creatives for the Ads! But make no mistake; for the dealers that do not have an in-house marketing team, be sure to review the Ads your marketing company has put together. You would be surprised as to how many dealers who do not take the time to review what their marketing companies are putting out, much less actually taking the time to review the marketing reports. 

Bottom Line: If your dealer is spending hundreds of thousands of dollars to increase traffic make sure that the vendors you have partnered with are holding their end of the bargain up. It does no good to hold onto a vendor - spending thousands of dollars - if they are not up to the ask. Much less the fact that their results all less than satisfactory. If you are unsure as to how to analyze or make sense of the reports, there are multiple outlets out there where you can get up to snuff with the new marketing trends. 

How do you manage your vendors? Do you take the time to truly analyze the ROI from each vendor? 

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