There has been a shift in not only the way you do business with your customers, but the way you do business internally. This can range from expanding your view to see each department as a profit center to the way you gauge success. Benchmarks are changing, the way we communicate has evolved and organizational structure continues to adapt to the growing needs of the business. As a result, we have found one key component that has shown to be valuable in the evolution and subsequent success of your dealership or auto group – including your CFO as part of the marketing meetings. Here are three reasons why:
1 Advertising is a top expenditure on the financial statement
It is estimated in 2020 that $7.48 billion was spent in Total Dealership Advertising Expenditures.i Purely from a dollars and cents standpoint, that kind of expenditure cannot be ignored by the position in the dealership whose job it is to manage the finance and accounting divisions. It’s imperative that the CFO understand where that kind of money is being spent and what kind of return on investment (ROI) it is driving.
2 Metrics are changing
Supply and demand curves have completely shifted in recent months as new inventory shortages and high vehicle demand have paved the way for an increase in new inventory turn and healthy gross profit performance. Simultaneously, used vehicles have become more valuable and more expensive to acquire. When you compare this shift to the advertising cost needed to sell a new or used vehicle, we think there’s a new metric in the making:
Gross Profit/Car sold vs. Advertising Cost/Car sold
This margin will highlight whether:
- you’re making more than you spend on a vehicle sale and
- serve as a predictive analysis as to whether the industry is shifting yet again.
3 Checks and balances
As marketers, it’s easy to create our own self-fulfilling prophecy. Consider this situation – a marketing team who speaks the industry lingo create a plan, and everyone agrees to that plan. But who from outside the team is there to validate the direction or strategy proposed? A CFO can serve as a valuable asset strictly from a checks and balances standpoint – someone to help break up the self-fulfilling prophecy and ask questions others may not think to ask. This can help keep your team honest and aligned with the greater strategy of the dealership or auto group.
This direction can help your teams grow and adapt the same way your business has. This may be the first time the two departments have aligned, but it won’t be the last.
For more information, reach out to us at firstname.lastname@example.org.