How much does it cost to attract one used car buyer to an auto dealer?

[Mustafa Mustafa]

Marketing is very broad and there are many examples that dealerships use. A successful dealership will have their own marketing recipe that they have created over the years and will continue to change over time.

Email list: weekly newsletters sent to customers with tips or stories related to the brand or dealer group.

Mail marketing: Sending flyers, magazines, calendars etc.

Leads from external sources: automotive marketplaces

Social media: Youtube videos, facebook, instagram etc.

Advertising campaign: Google ad campaigns, facebook ad campaigns

Branding: Creating an image, giving back to the community, story and buying experience to retain buyers and get referrals. Examples of this are partnering up with a schools drivers ed program to provide a unit for use.

 

[Mric1]

Marketing is very broad and there are many examples that dealerships use. A successful dealership will have their own marketing recipe that they have created over the years and will continue to change over time.

Email list: weekly newsletters sent to customers with tips or stories related to the brand or dealer group.

Mail marketing: Sending flyers, magazines, calendars etc.

Leads from external sources: automotive marketplaces

Social media: Youtube videos, facebook, instagram etc.

Advertising campaign: Google ad campaigns, facebook ad campaigns

Branding: Creating an image, giving back to the community, story and buying experience to retain buyers and get referrals. Examples of this are partnering up with a schools drivers ed program to provide a unit for use.

Thanks for the detailed answer. And how much does such a dealer, on average, have an indicator CAC? What percentage can be spent on attraction from auto marketplaces?

 

[Mustafa Mustafa]

You're welcome, unfortunately I do not have an answer for that. Every marketing department will have its own metrics, there is no industry average. Too many variables at play as my peers above have said.

 

[Mric1]

You're welcome, unfortunately I do not have an answer for that. Every marketing department will have its own metrics, there is no industry average. Too many variables at play as my peers above have said.

And what is yours, or is it a trade secret?

 

[Tallcool1]

And what is yours, or is it a trade secret?

I think you are missing his point. To know a dealerships metrics is of no value without knowing each and every one of the variables that play into those metrics. This becomes a very long and drawn out study in something that provides very little value at the end.

Market size, brand, national support from that brand, regional support from that brand, advertising co-op money, presence of various marketplaces within that market, population base, market presence within that population base, median household income, lease programs available for the brand, and this goes on and on.

There is no secret sauce. It is different for every organization.

 

[DrewAment]

I want to also chime in here - mainly for trying to compare X to Y and get an average. 20 groups, and even the NADA number is kinda bunk - as they only have limited access. And....

Because it all depends on WHAT the dealer puts in the advertising account on the statement. Some dealers charge my fees to advertising (I think it should be outside services). The company that takes the vehicle photos .. advertising or outside services? How about the dealership website, chat, trade app tool? CarFax reports? What about KBB.ICO? SnapCell? Etc etc. Just a few of what I have seen charged to "advertising" when reviewing financial statements. Do they all make sense to me ... doesn't matter, that's what the dealer/owner wants.

For this reason, and a few others -- no real way to compare yourself to another dealer and spend per unit.

But - just to give you a number... one group I work for sells approx 1200 vehicles a month at a advertising cost of $145 per unit. This is AFTER co-op (OEM) support.

 

[Mric1]

I think you are missing his point. To know a dealerships metrics is of no value without knowing each and every one of the variables that play into those metrics. This becomes a very long and drawn out study in something that provides very little value at the end.

Market size, brand, national support from that brand, regional support from that brand, advertising co-op money, presence of various marketplaces within that market, population base, market presence within that population base, median household income, lease programs available for the brand, and this goes on and on.

There is no secret sauce. It is different for every organization.

I want to also chime in here - mainly for trying to compare X to Y and get an average. 20 groups, and even the NADA number is kinda bunk - as they only have limited access. And....

Because it all depends on WHAT the dealer puts in the advertising account on the statement. Some dealers charge my fees to advertising (I think it should be outside services). The company that takes the vehicle photos .. advertising or outside services? How about the dealership website, chat, trade app tool? CarFax reports? What about KBB.ICO? SnapCell? Etc etc. Just a few of what I have seen charged to "advertising" when reviewing financial statements. Do they all make sense to me ... doesn't matter, that's what the dealer/owner wants.

For this reason, and a few others -- no real way to compare yourself to another dealer and spend per unit.

But - just to give you a number... one group I work for sells approx 1200 vehicles a month at a advertising cost of $145 per unit. This is AFTER co-op (OEM) support.

Thanks for answers. Then it's easier to ask the original question I wanted to find out. How much is spent on the sale of one car per users from auto marketplaces? Because we are making a marketplace and we need to understand a very approximate income from this type of auto marketplace monetization.

 

[Tallcool1]

Thanks for answers. Then it's easier to ask the original question I wanted to find out. How much is spent on the sale of one car per users from auto marketplaces? Because we are making a marketplace and we need to understand a very approximate income from this type of auto marketplace monetization.

Man that is a tough question to answer.

This will depend upon a few factors, but number one (in my opinion) is the price point of the vehicles sold by a given dealership. Dealerships that focus on lower priced used vehicles will spend a fraction of what higher priced dealerships spend on a per vehicle sold basis.

What type of Marketplace are you building? Who have you identified as your primary competitors? What is going to be better about your mouse trap?

Cars..com or Car Gurus may have this data somewhere in a White Paper if you would want to search for it. It won't provide specific data on a per dealership basis, but you aren't really looking for that anyway.

 

[Ryan Everson]

Thanks for answers. Then it's easier to ask the original question I wanted to find out. How much is spent on the sale of one car per users from auto marketplaces? Because we are making a marketplace and we need to understand a very approximate income from this type of auto marketplace monetization.

Let me challenge you a little.

What is going to differentiate you from other marketplaces and make dealers want to sign up?

Or perhaps more importantly, how are you going to get consumers to visit your marketplace? Dealers won't sign up unless you have a lot of in-market eyeballs to offer them.

Many have tried and failed to create a new marketplace site. I would just urge some caution before you sink too much time and resources into creating yet another run-of-the-mill marketplace.

 

[joe.pistell]

Grandpa Joe weighing in.

we are making a marketplace and we need to understand a very approximate income from this type of auto marketplace monetization.

Mric, your question reveals where you are in your journey. If you had interviewed a dozen dealer decision makers face to face, then you'd not be here and... you'd probably given up your vision