Sam, It would appear that you have the advertising expense file. If not, then get it.
Your three largest variable expenses are Advertising, Floor Plan and Salesman's Compensation. Years ago, my dealer bought a custom built Bertram Yacht. It ended up on my floor plan. The captain, in my salesman's compensation and all of his expenses into my advertising. You might be surprised what you might find in these three accounts.
Saying that "the internet is the most cost effective and efficient form of advertising, in the internet age" will not be subject to debate on DealerRefresh. Furthermore; few people will debate that most dealerships spend far more on conventional media (print, TV and radio). While these forms of advertising get far less scrutiny, the internet budget always seems to be under a magnifying glass. As an example, in my last store, in Dallas, the Internet Department represented 70% of total sales but less than a third of the total ad budget.
I have brought this up on DealerRefresh before and nobody has yet to comment. It is past due for dealerships to be "internet stores" where everyone acts like and ISM. To set this up, properly, you have to examine the relationship between the three major variable expenses and the impact of the internet.
If your dealership is using the velocity approach and turning your cars at a much quicker rate, that effects floor plan. Yes, the approach works for new cars, too.
If you are using market-based pricing, you have to look at the profit centers, that are still available: under-allowance, switch to lease and maximizing the back end. You need a salesman's compensation plan that encourages this.
Again, advertising is the most efficient form of advertising. We need to look at the advertising account, like you are doing, with maximizing the internet as the focus.
