It is Q1, which means budget allocation for the current year and I guarantee you’re asking yourself “How much do I invest in my automotive marketing strategy this year?” Well, there is no one magic number because it really depends on your goals in 2015. Are you just starting out or are you looking to expand? Are you really trying to push inventory or are you seeking brand recognition?
Maybe you have a number in mind because that is what you HAVE to spend, but that doesn’t necessarily mean that is what you SHOULD spend. Sadly, the current way of thinking is that you use almost of all of your money on overhead and daily operations and if there is anything left over, use it on automotive marketing. Instead of rushing to a number, strategically plan and you can budget accordingly. On average, businesses spend 10.4% of their annual revenue on their marketing strategy, but it generally falls between 5-15% each year.
Just Entering the Market
If you are just starting out and want to make a big impression, you may need a more aggressive budget. This means extensive Google AdWords, SEO, public relations, and social media campaigns. A similar formula can be used if you are already established in a community and you’re looking to launch a second or third location in another market. With this strategy in mind, your business should look more towards the 12-15% end of the spectrum. But I know what you’re thinking “If I am just emerging, how do I spend 12-15% of revenue that I haven’t made yet?” Well, only you can tell what your potential income will be but you may be able estimate a number based on your operating costs and current inventory. Once you have a better idea of your projection, you’ll then have a better idea of your marketing budget.
So you’re a well-established used car dealership, you’ve had steady sales numbers in your local market over the last few years and you’re mostly focused on pushing current inventory as well as defending market share. You’re not expanding, but you’re still wondering where you should be on the budgeting scale. Since marketing budgets depend on your goals for that year, you need a strong inventory exporting tool such as WebManager which exports to 100+ automotive listing sites. However, with such a focus on pushing inventory; detailed listing copy and high-res photos are a must. A strong social media presence this year will also help you push inventory and keep brand recognition. With more of an internal marketing focus, your marketing budget will be between 7-10%, but this means more manual updates and monitoring to be sure your marketing dollars are spent well.