Cost of advertising

The actual cost of acquiring a customer and getting it delivered is substantially more than most people figure.

The normal way most dealers figure their "Per Retail Cost" is 

take their advertising budget and divide it by their number of sold units.

example:  $50,000 budget and they sold 125 cars.

50,000divided by 125= $400 per retail delivery

what makes it wrong is this

They are assuming in this manner that all their cars delivered were due to advertising!

The number one reason people buy is LOCATION! LOCATION , LOCATION

then followed by referrals, repeat customers, 

JD POWERS says that on an average, only 30 % of the buyers came in because of conventional advertising.  the rest bought because one of the other reasons.

The correct way to figure the TRUE cost of "Per Retail" is

take 30 % of your total deliveries made and divide that by your advertising budget.
example:

125 units delivered X 30 % = 38 units.

$50,000 budget divided by 38 = $1315 per retail delivery