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What Has a Better Return on Your Investment: Training or Advertising?

Lycia Jedlicki
Written By: Lycia Jedlicki
Posted on April 30, 2015

If you ask a dealer how much their monthly advertising budget is, they usually can tell you that number right off the top of their head, along with approximately how much they spend with each vendor. However, when asked how much they spend on training each month, you will probably get an “I don’t know” or “not enough” answer.

Truthfully, most dealers do not have a monthly training budget. Dealers, for the most part, don’t like training; they just expect their people to know what they are supposed to do and to know what is expected. Training just isn’t as exciting as advertising. But let me ask a question: If your advertising brings in a lot of show floor traffic and vehicles through the service department, and your people just do a “so-so” job with them, is it a good investment? Wouldn’t we be better off transferring some of our advertising budget to training? After all, don’t we want to make sure all of our customers get treated properly?

We as dealers spend thousands of dollars monthly to bring people into our show rooms and service departments, yet when we mystery shop ourselves, most of us cringe at the results. So again, I ask you this question:

Are your people properly trained, and if not, why not?

I have two dealers in different 20 Groups that took money out of their advertising budget and moved it to training. What were the results? A Volkswagen dealer from Chicago is going to have his best net profit year, while Volkswagen is having a very tough year. A BMW dealer from Florida also invested some of his advertising budget in training and his net profit is up 51%.

These dealers did not just invest in automotive training. They did leadership seminars through local colleges and the BMW dealer brought Toast Master’s into their dealership so he could make sure his people knew how to communicate with their customers. These dealers decided to invest in their people, and it has paid off handsomely. As the Breakers Resort in Palm Beach, Florida says, “Happy employees make happy customers.”

Challenge yourself with this question when figuring your advertising budget this year, “Are my employees going to handle my customers the way I would like them to, all of the time?” If not, maybe it’s time to rethink how you spend your money so you can get the best return on your investment.

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