Continuously Measure the "Big Three"

“That which gets measured tends to improve”

Closing Ratio – will be heavily dependant on your lead source ratios. For example, if you purchase the bulk of your leads from third-party lead providers (AutoTrader, Dealix, AutoUSA) then you will have a lower closing ratio than if your primary source of leads is your own web site. Leads from your own web site will almost always be about specific vehicles, be from “lower-funnel” prospects and close at the highest rate. You have LOTS of lead sources available to you. Regardless of whether you get a lot or a little number of leads from Toyota.com, your web site, SEM or third-party sources; you need to track and measure your closing ratio by source and make certain that whichever source it is, you are getting an excellent closing ratio.

Cost per Sale – has a lot to do with closing ratio. The more sales that you close per lead source, the lower your cost per sale will be with that source. Leads from Toyota and your own web will have the lowest cost per sale (CPS). This is because Toyota leads a free and once you pay for your web site, the more leads you get from it, the lower your cost per lead is. That is why we encourage you to heavily promote your web site in every way possible. In general, your CPS for any third-party source should average less than $200. If you have a source that is higher than $200, there needs to be a very strong, compelling reason to keep them – a high per car gross profit average may be an example of such a reason.

Return on Investment – is determined by the percentage of revenue that you are able to keep, after removing the costs of doing business. For example, let’s say that you sold 100 units and made $120,000. Your lead costs were $9,000 and your other costs (compensation, advertising, etc.) were $33,000. Divide your expenses by your gross and you find that your expenses were 35% - meaning your Return on Investment equals 65% - a very healthy return! Always remember – “More important than what you make, more important than what you spend, is the difference between the two – what you get to keep!”