Automotive Marketing Facts

Automotive Marketing Facts: Marginal Cost Per VDP

By June 2, 2015 No Comments
Marginal Cost Per VDP

Marginal Cost per VDP

Some listings services have different prices for the different tiers of exposure. Paying more money gets the dealer’s inventory more exposure. The best way to gauge the value of the additional exposure is the marginal cost per VDP. How many additional VDPs you are getting, divided into the additional cost. To know if this is going to be a good decision before you make it, calculate the break-even point. With the increase in cost, how many additional VDPs would you have to get for an acceptable cost per VDP? If your acceptable cost per VDP is $1.00 and the cost is going up $500, then does it seem likely you’ll get an additional 500 VDPs on the same inventory? Ask the vendor what similar dealers have experienced when they moved up to a higher tier. There will always be an element of executive judgment involved in making these decisions, but it sure helps to do the math, and that’s a fact.