What does a marketing budget look like for a dealership? If you’re like most people I talk with, you’re having one of two reactions. The first reaction I get is that when I say the word “budget” the first group says, “No! Not a budget!” However, when I mention a budget to the second group they say “Yes, a budget! Where has this been my whole life?” A budget is simply giving us permission and a strategy to spend our marketing money. We work with about 4,000 dealerships across the country and we have found that a well-rounded budget isn’t rocket science but can be broken down into five categories.

Store – 20%

If I woke up in your shoes, I would spend 20% of my marketing money on my store. This may mean repaving your parking lot or putting a fresh coat of paint on your dealership. Maybe it means upgrading your interior displays. Whatever it looks like for you, the rule of thumb is that we want to be right around 20% on our store.

Statistics say if a customer comes in and has a positive experience at your store, but your store doesn’t look pleasing from the road, 1 out of 3 of them will not recommend you to their friends. They will not give you the word of mouth advertising that has the biggest impact. That is the impact of your physical location on your marketing. Walk outside your dealership with a fresh set of eyes and identify one or two things you can do to make the curb appeal of your dealership better.

Customer Retention – 10%

It costs five times as much to get a new customer as it does to retain an existing customer. Depending on your situation, your percentage might be different, but we typically encourage dealerships to spend 10% of the marketing budget on customer retention.

Now, I don’t want you to send out a Christmas card to all of your customers. Everyone else is already doing that. I want you to think about times that you can be in front of your customers when no one else is. Think about off-holidays like St. Patrick’s Day or National Ice Cream Day. This last year, we celebrated National Ice Cream Day with all of our Dealer Success Group members by sending out a $5 McDonalds gift card and telling them to have ice cream on us. How many other companies do you think did that? Not many. Find a holiday that resonates with you and be creative on ways that you can be in front of your customers for those holidays.

Online – 25%

Online is a broad topic that typically takes up a lot of the marketing budget in a dealership. Things like websites, social media, Google ads, and YouTube videos all fall into this category.

One of the best things I have seen in recent years in regards to making the most of social media marketing was a dealer who came up to me last year at the GIE+EXPO and said that they had started taking a picture of every new customer with their equipment. Then, they would post it on their Facebook page and if they could share it and get 100 likes on it, they would send them a $100 prepaid gift card. Not only are you solidifying a relationship with an existing customer, but you are utilizing word of mouth advertising.

Advertising – 25%

If I woke up in the shoes of a dealer, I would plan to spend 25% of my marketing budget on advertising. This would include radio ads, billboard, tv, print ad and direct mail.

One thing we are encouraging dealers we work with to think about is utilizing some of their advertising money on Pandora. Pandora is currently the most listened to radio station in the US. You are able to target your ads to reach your customers and you can receive analytics on your ads as well.

Events – 20%

Many dealers we work with find a lot of success using events as marketing for their dealerships. Everything from open houses, state fairs, and VIP events would go into this category.

Some of our dealers have been doing charity events over the last few years, with great success. To set up a charity event, they simply reach out to their local PTA, church group, or high school band and tell them they would like to help them set up a fundraiser. The dealer then pays for the food, and the kids come work the event. The kids keep the profits from the event for whatever cause they are raising funds for. The kids promote it on social media and tell their family and friends. What our dealers are finding is that after the event, when a parent, grandparent or friend is looking for a piece of equipment they typically will come to them first, because they helped out someone they cared about.

Every marketing plan will be unique based on your location and your plans for your dealership. But one of the best things you can do is actually make a plan and use it as a guide for when and how to spend your valuable marketing money.