How To Set Up A Monthly
Advertising Track Record


by Tom Egelhoff

One of the biggest mistakes I see small businesses make is trial and error advertising. They advertise anywhere and everywhere fingers crossed hoping that something works somewhere. They let newspaper; radio and TV people create the ads when these people have no idea how your dealership works. If your yearly gross sales are $250,000 and you set aside 5% of that for your advertising budget you are gambling away $12,500 if you do it incorrectly.

Advertising must be an investment; it can never ever be an expense. It must produce more in profits to your store than it costs. Think of your advertising as any other employee you hire to do a specific job. Each member of your staff must produce results and your advertising is no different. So, how do you know if your advertising is working or not? You need to track the sales results your advertising produces and you do that with a monthly advertising tracking record.

Your computer system may be able to track a lot of what you need but if not you are going to have to keep some manual records. Is it worth the effort? Just keep thinking $12,500 down the drain. Yes it is worth it.

Here are some of the things you are going to be keeping track of:

  • The number of warm breathing bodies that enter your store (regardless of whether they buy or not, some form of advertising brought them in and you need to know how many there are).

  • Your stores average ticket sale.

  • Your closing percentage (this is where the profit is really made).

  • The higher your sales team's closing percentage the more
    profitable and cheaper advertising becomes.

  • Your gross sales for each month

Here are some ways I used to track traffic when I was a salesperson.

Tracking the number of people I talked to each day was easy. I did it with business cards. Each day I started with 50 cards. Every warm body I talked to during the day, whether they bought or not, got a card. At the end of the day I counted the cards I had left and that would tell me the number of customers I talked to that day. If I had 25 cards left that meant I talked to 25 customers that day.

For my closing percentage I took the number of customers I talked to divided into the number of sales. If I had five sales to 25 customers my closing ratio was 20% not too good. But unless I track the results of my efforts how do I know if it's good or not? Twenty customers that your advertising brought in walked. Looking at the total sales for the day of the shop isn't going to tell me how effective my sales people are or who needs improvement. A bad sales person with one or two lucky days per month can look like a top producer at the end of the month when they really need training instead.

Your stores average sales ticket will tell you the quality of the customer your advertising is bringing in your door. Studies show that high-ticket customers will stay with your shop longer and buy more often than lower ticket customers. Your advertising must be in the right place to produce the higher end customer. Or, your sales people need to learn to up sell or stress more product benefits to the customers that your advertising is attracting.

Your gross sales for the month will tell you if you are growing. Look at your monthly tracking records at the end of four months. Are your sales on track to reach your yearly growth goals? If they are then your advertising is working. If not, you could be advertising in the wrong places to the wrong people.

Last but not least compare to last year. If you haven't been keeping the kinds of detail I'm suggesting then start. If you have then how are you doing against last year. In the case of some larger markets the economy may have an effect on your figures. Take this into account and adjust accordingly. Success is bringing in quality traffic and selling them and advertising is the way to do that. Track it and do it right and watch your business grow and prosper.


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