Get a Grip on your Trade Me spend.

Trade Me costs are a hot topic with dealers right now. Price rises feel like they keep coming. Dealer Principals are looking at the monthly bill and asking the question: are we really getting value? That is the fair question; but it is not the only question. The better question is this: are you getting the most out of Trade Me, or are you just paying the bill and hoping?

Start with the question that matters

If Trade Me is one of your largest marketing costs, you should be able to answer two simple questions:

your cost per lead; and
your cost per sale.

Not knowing your cost per lead is poor. Not knowing your cost per sale is worse. And if Trade Me is one of your largest lead sources, not knowing either is a problem you should fix this month. Part of the challenge here is that your marketing department manages all your marketing activities especially those responsible for generating leads, but they're probably excluded from your biggest marketing expenditure of all, Trade Me, which is typically managed by the sales manager or the dealer principal. Which naturally means your analysis is likely disjointed too.

Comparing Apples with Apples: Photo by Raquel Martínez on Unsplash

Do not confuse activity with results

Before we get to AutoPlay, let’s challenge the way marketing performance is often reviewed. If your marketing report is built around clicks, impressions, engagement, or website activity, it may be useful. But it is not enough.

Those measures are often driven by the platforms themselves. They show activity. They do not always show dealership results. Dealer Principals need to connect marketing spend to leads, test drives, sales, gross opportunity, and cost per sale.

Trade Me is the obvious place to start

Trade Me is a good test case because it is usually big enough to matter. It is also one of the easier sources to review because Trade Me enquiries are normally tagged clearly inside AutoPlay.

Even a dealership with patchy AutoPlay habits will often still have usable Trade Me source data. That means you can review Trade Me performance by yard, brand, location, stock type, and listing type. You can also compare it against dealership visit, prospecting, repeat customers, Facebook, website leads, and other sources.

Lead volume is not the answer

As a robust rule of thumb, Trade Me is very good at generating used vehicle leads. It is usually weaker for new vehicles and demonstrators. That does not mean Trade Me has no role for new or demo stock. It does mean those categories should be measured separately. The easiest way to do this is to check your report by Listing Type – treat new and demo as new and used and no listing as used. More on that later.

The same applies to geography. Trade Me may generate enquiries from outside your immediate market, especially if your listings rank well and the photography is strong. But out-of-town enquiry does not always become out-of-town sales. After all, if I am spending $60,000 on a vehicle, I might travel 500 kilometers to buy it. I might. But I probably won’t, so locality matters, and conversion rate will help you understand whether conversion rate is affected by locality.

The answer is probably already in AutoPlay

The good news is that this is not a complex project. AutoPlay’s Analytics Reporting dashboard suite gives you the starting point. Go to the pre-populated Lead Source dashboard and review your top lead sources by:

· leads generated;

· test drives created;

· sales completed; and

· cost per lead and cost per sale, where campaign costs are entered.

This is where the conversation changes. Once campaign costs are added, the dashboard becomes more than a reporting page. It becomes a practical tool for deciding where to spend, where to improve, and where to push back.

What you may find

In one large dealer group for example, Trade Me was the top lead source. But it was only the second sales source. The dealership was good at generating leads (many out of town) but poorer at converting them, which could support the idea that out-of-town leads convert less than local leads. Dealership visit was the strongest sales source. Prospecting converted at a lower rate, but at negligible cost per lead – meaning as an activity its ROI was massive.

The same analysis showed that Trade Me performed very differently across new, demo, and used stock. The cost per sale for new and demo vehicles was materially higher than for used vehicles. That is exactly the sort of insight you miss if you only look at total lead volume.

Facebook created a different question. Sales teams often describe Facebook leads as weak, and sometimes they are. But if Facebook leads cost a fraction of Trade Me leads, the commercial comparison becomes more interesting. If you had $100 to spend, would you rather generate two leads from Trade Me or twenty leads from Facebook? The answer depends on conversion rate and cost per sale, not on opinion.

This is not an anti-Trade Me argument

The point is not to stop using Trade Me. For many dealers, that would be unrealistic and probably unwise. The point is to make Trade Me work harder.

That means asking sharper questions:

· which stock types justify premium listing support;

· whether new, demo, and used vehicles should be measured separately (they should)

· which yards or locations convert Trade Me leads best;

· whether out-of-town leads are producing enough sales to justify the spend;

· whether photography and descriptions are improving conversion, not just enquiry volume; and

· whether other channels produce a better cost per sale for some vehicle categories.

If the marketing team owns this dashboard and inputs campaign costs consistently, you get a monthly learning loop. Sales and marketing can then have a better conversation. Not “how many leads did we get?”, but “which sources created the sales outcomes we actually wanted?”

The practical challenge

Before approving next month’s Trade Me package, ask one simple question: what was our cost per sale by source last month?

If you cannot answer that in ten minutes, the first job is not to negotiate harder with Trade Me. The first job is to get your own reporting in order. Once you have the answer, you can make better decisions about package levels, listing quality, stock mix, campaign spend, and whether Trade Me is being used in the right way for your business. You might get a better result for your business by diverting 10% of your Trade Me spend to Google or Facebook or retention marketing. Only your analysis will help unravel the right answer.

Sometimes you just want an answer If that's the case with you then reach out to us at sophia@boostauto.co.nz. We'll be happy to help.

Next month Boost Auto will launch an AutoPlay League Table – a low-cost way to compare, improve and unlock your AutoPlay performance and compare that performance with other dealers – confidentially of course. Along the way we will unlock insights for you. To find out more, email us.