1000% ROI With Facebook - Do I have Your Attention Yet?
As the cost of running a dealership continues to rise, and savvy consumers are further enabled by tools like Auto Trader, profits are suffering. In a time when margins are decreasing, the only answer should be to sell more! I'm going to show you how to do exactly that, using Facebook.
What Are Facebook Ads?
Facebook Ads are a low cost, highly targetable, extremely effective tool, that all dealerships should leverage. For the price of your daily coffee run, your dealership can generate dozens of qualified leads each week.
Several types of Facebook Ads exist, but for the purpose of this article i'm going to be talking about "Lead Generation" ads. As I believe them to be the most under rated, yet highly effective way to schedule more test drives and ultimately increase your dealerships sales. .
What Are Lead Generation Ads?
Simply put, when building a Facebook Ad campaign, you're given a variety of Ad types to choose from. Each Ad type is optimized a little bit differently and provides slightly different functionality. So for the purpose of this article, as mentioned above, we're specifically talking about "Lead Generation" Ads.
As described by Facebook, lead generation ads "Collect lead information from people interested in your business." So what exactly does this mean?
Basically, lead generation ads allow you to show an advertisement via Facebook to your target audience. If they like what they say, they can click to learn more. If they'd like to take advantage of whatever it is you're offering, they will be shown a page containing their pre-filled contact information. They will then submit this to you, and expect to hear back from a representative of your company. You will receive their contact information, and can follow up with the customer accordingly. That's pretty much the basics of how a "Lead Gen" advertisement works.
Using Lead Gen Ads To Generate Test Drives
The intricacies of creating a high performing ad that convert, are far beyond the scope of this blow post. However the graphic below will give you an idea of how we're using Facebook lead generation ads to book test drives.
Now the idea behind all of this is real simple. Show people an ad with something of value that they might want, tell them you will give them that "thing" in exchange for coming in for a test drive, and let them opt in right on the page. That's the beauty, lead gen ads make it so easy for customers to complete a form and opt in right from the ad it self. Check out the screenshot demo below of the 4 steps a customer goes through to book a test drive.
The 4 Parts of a Lead Gen Ad:
A lead gen ad is not simply just an ad. It's actual a 4 part sales funnel in which the customer discovers your offer, clicks through to learn more, opts in to claim the offer, and is brought to a thank you page. The whole process is outlined below.
After the user "converts" by going through the whole process above, now it's all up to you. In your Facebook ads dashboard, you will have access to download each lead in realtime. Simply check back once a day, download the leads, and send them to your sales rep or BDC. All leads should be contacted within 24 hours maximum, but the faster the better. If a sales rep can contact them within an hour of filling out this form, you have a 99% chance of having them come in for a test drive.
Your Big Question: How much does all this cost?
The answer is... as much as you want it to cost!
Facebook allows you to allocate as much, or as little as you'd like to any give ad campaign. My suggestion is start with at least $20 a day. That should result in at least a dozen or so leads each week. But the more you can invest, the more customers you'll be able to bring through your dealerships doors.
The Bigger Question: What's my Dealerships ROI?
Actually it's pretty incredible. Think of it this way, for pre-owned vehicles the margin can range, but typically dealers are aiming for between $1000-$3500 in gross profit per vehicle depending on a few factors. But lets say you ran a Facebook Lead Gen ad, for $20 a day, promoting test drive for one month. You would spend a total of $600.
For a total spend of only $600, you would acquire somewhere between 35-45 leads! That is 35-45 customers who are telling you they want to test drive a car, and want to know when they can come in to do so. Now... if you convert just 1 customer out of all these leads, even worst case scenario you are making $1000 profit, and nearly 100% ROI! If your sales team cant convert 1 lead out of 45 who are asking to come in for a test drive. You have bigger problems here.
Most likely you will actually convert between 5 - 7 leads each month depending on your sales team and capabilities. Now assuming you net an average of $1500 per vehicle, you would be generating $7500 - $10,500 net profit each and every month. That's nearly a 1000% ROI.
Let me RE-CAP:
AD SPEND $600/MONTH = $7500-$10,500 NET PROFIT
The numbers don't lie! This is something you as the Owner, GM, or Sales Manager need to evaluate. An extra 10k per month for spending even $1000 a month is an incredible opportunity. Especially if you own a dealer group, and implement this strategy across 10 of your locations, we're talking an extra $1,000,000 per year!!!! Why aren't you doing this already!
So why aren't more dealerships using this?
Because most of them have no idea this exists, and they are too busy shoveling buckets of money over to AutoTrader. But seriously, most dealerships are not even aware this functionality exists. Ask anyone you know that works at a dealership about Facebook Lead Gen ads. Unless they are already my client, chances are they won't know what you're talking about.
The bottom line!
Make no mistake, once this catches on in a few years, and every dealership is doing it, it will cost a lot more to get the incredible results we can get now. But for now, there is massive money to made relatively easily. At least until everyone else catches on and joins the party. But for the next few years at least, this method is going to be a gold mine for a few select dealers.
Now to be honest, the true secret to success here is not just running an ad. It's all about how you run the ad, your audience targeting options, demographic settings, time of day and week you run the ads, etc. These are things that we've narrowed down here at Suits Social. We have a simple plug and play formula, and once you set up your ads once, you can just keep them running all year and easily maintain them yourself.