At the upcoming DD18 in Tampa, I will be sharing why the Real Market Value (RMV) should decide your advertising – otherwise, you are wasting or sabotaging your marketing efforts. The RMV should also affect your pay plans – otherwise, your pay plan is not incentivizing the right behaviors. Finally, the RMV should determine your sales team’s structure – otherwise, you have too many of the wrong people focusing on the wrong activities and generating average (if you’re lucky) results.
The RMV of a customer is determined by looking at all of the contributing factors that lead to the sale and the post-sale opportunities the customer generates. These factors are monetized and ranked to prioritize the 6 major lead sources of customers: Repeat, Referral, Self-generated Prospecting, Service Conversion, Direct Response Marketing, and Passive Traffic.
Of the 10 metrics that can be used to determine the Real Market Value of your next customer, let’s look at just 3 metrics and how they SHOULD decide your marketing, affect your pay plan, and determine your sales team structure. I’ll go into more detail at the DD18 Conference on Wednesday, April 22nd at 3:30pm.
- RMV factor #1 – Opportunity Cost: The amount of money it takes to create the opportunity to do business with this customer.
- RMV factor #2 – Ease of Conversion: The effort it takes to “convince” the opportunity to become a customer.
- RMV factor #3 – Initial Profitability: The amount of profit generated from the initial transaction.
What is the typical dealership’s approach to a marketing meeting? You’ll probably hear these things: we need to do better with digital and SEO, we need to drive more traffic to our website, we haven’t done an event sale in a couple of months or we need our BDC to set more appointments. All of these goals can be fine but let’s consider the time, energy, money and resources needed and then allocate them according to the RMV of your customer.
Take a minute and rank the 6 possible lead sources listed in the left column on opportunity cost, ease of conversion and initial profitability:
|
Lead Sources |
Rank Opportunity Cost (1=least cost, 6=highest cost) |
Rank Ease of Conversion (1=easiest to sell, 6=hardest to sell) |
Rank Initial Profitability (1=highest profit, 6=least profit) |
| Repeat | |||
| Referral | |||
| Self-Generated Prospecting | |||
| Service Conversion | |||
| Direct Response Marketing | |||
| Passive Traffic |
Are you seeing a pattern yet? Certain leads are less expensive to get, easier to close, and easier to make a profit on. How would knowing this help you make marketing, pay plan, and staffing decisions?
Don’t miss this session and 100+ sessions, workshops and case studies at the 18th Digital Dealer Conference & Exposition from April 21-23 in Tampa, FL!
