How to Keep Your Digital Vendors in Check


Every 30 days in the automotive industry, dealerships from coast to coast create their monthly financial statements they rely on to measure their operational results. I know this activity having intimately worked in our family dealership for 20 years with 10 of those responsible for the overall operational performance. This activity provided us with a clear understanding, department by department, of where we were sales and profit wise. We reviewed every line of the seven-page document at the management level and made decisions about what needed to change or improve to drive better results.

The dealership financial statement became our guidepost of the past and whether the decisions we made had previously paid off as expected. We generated this report using OEM Guidelines and Accounting Principles and knew it could be relied on. The foundation of the financial statement is also needed in your Digital Marketing Operations. Rather than wait for your vendors to provide you their report (which are not surprisingly going to show how well they are doing and how much you needed to do to improve results) it is better to create your own report every month.


The only way to truly keep your Digital Vendors in check is to measure their performance each and every month using your own scorecard and compare your report to the one they provide. If you need help creating your monthly report, please let me know and we can give you free access to our monthly report generating tool which you can leverage to hold your vendors accountable each month.

To create an effective Digital Marketing Performance Report you’ll need some fundamental information to start as is outlined below:

1. Your lead sources and your traffic sources by name.

2. Your lead count and call count from each lead source.

3. Your lead source cost and your search engine traffic source cost (add your search engine traffic source cost to your website cost) so you can account for the true cost of dealership website leads and calls.

4. Your sales from Internet leads and trackable calls.

5. Your gross profit from your Internet leads and trackable calls.

With this data, you are able to generate a simple spreadsheet by column and it will help you to identify the following outputs.

  • Close Rate by Source
  • Monthly Gross by Source
  • Gross Per Vehicle Sold by Source
  • Monthly Cost by Source
  • Cost Per Vehicle Sold by Source
  • Cost Per Lead by Source

We ask our clients to look through three windows when they determine the viability of a lead source and whether they should keep them or repurpose their marketing in more productive ways.

The 3 windows to look through are…

  • Close Rate
  • Gross Average Per Vehicle Sold
  • Cost Per Vehicle Sold

What you’ll want to do next is look at your averages in each of the columns and determine whether any source is performing above or below that average. The exception is, of course, the cost per vehicle sold where the lower the cost, the better the benefit.

vendorsWhat you will find when you engage in this exercise is that lead sources such as Autotrader and have close rates and gross averages in line with the averages but their cost per vehicle sold is typically higher than the average. Don’t freak out but arrange a call with your market rep and show them the report and have them prove to you the value of the peripheral traffic they provide as walk-in and web traffic. If they are good at their job and their information is accurate, you may find it worthwhile to retain them in your Digital Portfolio. If they can’t, repurpose the spend in areas that are more productive.

We like to see sources that exceed averages in each area but in the balance, you’ll likely have some that don’t perform well in each key category. Those sources that don’t meet or exceed the averages in two or more areas should be put in a review status and you need to schedule a call to let them convince you they are worth keeping.

What’s great about this exercise is you are now judging the sources with your own self-generated report, instead of relying on just their report to determine if you should keep them. Rest assured, their report may show you are not performing as expected but it will likely show that the vendor is doing everything right. We both know that not every source is worthy of your precious budget so be wise in your reporting and judge them accordingly.

Focus on what works with your Digital spend and you’ll find yourself working with the best of the best vendors which will afford you great opportunities and increased sales.

Give it a try, I think you’ll appreciate it. Once again, if you’d like to use our free online reporting tool, just message me and we will get you set up right away.