One of the biggest points of discussion at my workshop for NADA 2019 in San Francisco was the stress for dealership owners, marketers and General Managers who bear the burden of handling their marketing budgets. While the original intent of my workshop was to provide a blueprint for dealers who are asked by their vendors to raise their marketing budget, the attendees were equally concerned about what to do when budgets need to be cut.

I want you to take these three tips back to the dealership with you to increase the efficiency of your marketing.

Why Are You Changing Budget?

Whether prompted by your agency partner, internal leadership or yourself, asking the simple question “Why?” before making any change is the first and, in my opinion, the most important question to ask.

Too often, emotions can drive the initial desire to raise your budget. There are plenty of success stories out there that you hear at conferences of dealers making one simple change to their budget, and everything else falling into place.

Do not fall prey to feeling you should mimic this strategy without doing your homework to determine if this change is best for your store.

Conversely, when dealing with emotions, if you had a month where sales are down, cutting marketing might be your knee-jerk reaction. Data should be the driving force behind all of your budget-related decisions. Remember, data does not care about emotions.

Cutting marketing is the easy way out of what could be a harder problem to solve than simply changing a line on your budget sheet. With a little research, you might very well find that marketing is doing its job, but your sales team isn’t converting on the expected percentage of sales opportunities.

Those who aren’t marketing-savvy often view marketing as a light switch that can be turned on and off with immediate results. Cutting marketing funding can impact long term growth, and once you realize that changing your budget wasn’t the answer, it might be too late to fix it.

What Results Can You Expect?

Ask your agency partner or your marketing team what you can expect from the adjustment. It’s not always a cut-and-dry answer, but having that conversation will help both sides understand what you expect, and often you’ll get an idea of the opportunities your marketing team hopes to generate.

Discussing this question with your agency will help you craft a customized strategy for your business. Increasing or decreasing in a targeted campaign can help you optimize your marketing budget.

Who Does This Change Impact?

Let’s say you increase budget, your agency does their job, and you see the increased sales opportunities that you expected. Are you staffed to handle them? I have seen dealerships increase opportunities, but refuse to hire the appropriate staff to handle the increased volume and then blame the marketing for not selling more cars or service.

Any increase or decrease also has to be inspected to see what type of results are generated. For example, if more calls are generated, but customers are just using new car ads to call in to check on the status of their vehicle in service, then you need to ask service advisors why customers aren’t being kept up to date already. The goal is to maximize your budget everywhere it can be, and sometimes revealing deficiencies in other areas of business that your campaign isn’t targeting is a good way to do that.

While a good agency partner will already be asking these three questions before suggesting that you increase or decrease your marketing spend, it’s just as important that you know them so you can self-evaluate in cases where you have an in-house marketing team or your agency isn’t doing its job.

In the end, careful inspection and a thought-out process will stop you from having to rely on hope that your marketing is doing its job. That’s simply too expensive in my book.

Glenn Pasch

Glenn Pasch is a Partner and CEO of PCG Digital. Glenn continues to author articles for multiple industry publications, blogs and forums as well as continuing his writing online at www.glennpasch.com.