For years, independent tiredealers have utilized technology to measure such critical aspects of theirbusiness as inventory turns and mechanic’s productivity.
Why? Because for each of theseitems that contribute to revenue, there is an associated cost. Inventory needsto be purchased, mechanics need to be paid, and owners want to know that theyare getting an acceptable return on their investment.
Surprisingly, though, most ownersignore this methodology when it comes to advertising. When asked whatadvertising programs they invest in and why, most will simply respond that theydo a little bit of everything (e.g., Web site, radio, coupons, Yellow Pages)and hope it generates business. Or, they ‘think’ it does. This feeling is notbased on any measurable results, but more on anecdotal evidence or a nebulous‘feeling.’
Or, perhaps the person sellingthem the programs cited statistics that may or may not be relevant to theirbusiness.
What they don’t realize is thattechnology can help them make more intelligent, fact-based decisions on whereto invest their advertising dollars.
How can this work? The first stepis to evaluate what you are doing today. A truly comprehensive computer systemshould provide you the tools to do this.
First, review each of youradvertising programs and their associated costs. Your system should have an “adcode” or like file to record these programs and costs. Next, when processingsales at the counter, your salespeople should be asking where the customerheard about you and recording that information in your system. If you areconcerned that your salespeople will forget to do this, you should be able tomake it a required field before an invoice is tendered. At any point in timeafter that, you should be able to run reports on each advertising program andthe business it generates (both gross sales and profits).
Based on this information, youwill be able to evaluate the effectiveness of your advertising programs andre-allocate your advertising budget to the programs that truly lead to moreprofits.
Remember, this is not a one-timeexercise. What works today might not work as well tomorrow. By continuouslymeasuring and reviewing these results, you should achieve a measurable increasein profits.
Advertising is an investment likeany other, and your technology should give you the tools to maximize the returnon that investment.
