industry expert / special finance
$6,000 higher than the inde- pendent, resulting in nearly $300 more gross profit on the vehicle and pushing $400 more in F&I; gross profit.
While deal volume enjoyed by the top-performing franchises is 41 percent greater than the top-performing independents, much of that can likely be attributed to the larger staffs (including BDCs) employed by the franchises which allow marketing budgets nearly double that of independents.
Advertising appears to be one area that the independents are enjoying an advantage in even with lower per-deal gross profits Their advertising expense as a percent of total SF gross profits are less, and their cost per salethe true tale of the taperuns just $320 versus $447 per car for franchise dealers.
While the franchise dealers are able to convert a slightly higher percentage of leads (third-party, Web leads, credit
Advertising Percent of Use
Web Site Referrals Digital Radio
3rd Party Lds Television Other
Direct Mail Print
78% 84% 61% 51% 19% 23% 24% 3%
Percent of Budget
Franchise Independent Franchise Independent 91% 87% 82% 68% 32% 32% 23% 19% 4%
11% 3%
17% 73% 41% 47% 8%
21%
69% 12%
9% 5%
36% 76% 31% 72% 17% 58% 22%
* Columns do not total 100%. Represents % of budget for avg dlr using.
of their budget), television (32 percent using, spending 47 percent of their budget) and third-party leads (32 percent using, spending 41% of their budget).
Independents, spending about half as much, also have shifted to radio (51 percent using, spending 76% percent of their budget) television (23 percent using, spending 72 percent of their budget) and digital (61 percent using, spending 36 percent of their budget).
With the dealer ad spend reaching unprecedented levels for SF, a good bit of insight can be taken away, as dealer confidence can often be meas- ured by their willingness to open their purse strings. The 2012 Subprime Benchmarks
18
Percent of Total Retail Franchise
Independent
hotline and phone calls), the independents showed their mettle with the walk-in oppor- tunities with more than 31 percent resulting in sales compared to less than 20 percent with franchises.
The areas where franchise dealers are spending the biggest portion of the SF advertising money are radio (68 percent using, spending 73 percent of their budget), direct mail (only 19 percent using but spending 69 percent
certainly indicate dealers are willing to spend once again, and as a result, you should expect both their business and the SF industry to be bullish for the next 12 months.
Until next month, great selling!
SF Management Pay Franchise Independent
$15,008 $14,614
35.1% 92.5%
Average Units Sold Franchise Independent
9 8
Cost per Sale Franchise Independent
$447 $320
Advertising as a Percentage of
Total SF Gross Profit Franchise Independent 15.1% 14.0%