You probably know that 50% of your new car buyers and 59% of your pre-owned buyers found your dealership online. Your online vendors are likely bringing you reports and presentations justifying all of the money they are charging your dealership to attract those buyers online. These reports show an alphabet soup of metrics (“SRPs”, “VDPs”, etc.), but they don’t tell you if you are really getting your money’s worth.
I am always impressed when I visit a dealership and see the “sales board” measuring how many sales each salesperson has each day of the month, often compared against a goal or prior period. It is equally remarkable that dealers don’t do this as regularly or publicly for their web traffic, even though it’s now driving the majority of their business. If you want to start managing your traffic and getting the most out of your spend, there are 5 quick and easy ways to measure your web vendors just like salespeople.
The “Big 5” are:
- Rank Your Spend: Rank your monthly spend for each digital marketing channel. While this sounds obvious, you’d be amazed how many Dealer Principals and General Managers lose track of how much they are spending with each vendor and how much it can creep up if you aren’t on top of it every month. This ranking is important because it provides the lens through which to look at everything else.
- Rank Your Consumer Impressions: The number of times a consumer actually clicks on one of your cars to look at it, referred to as a “consumer impression” in other industries, is measured through “Vehicle Detail Pages” (“VDPs”) on most automotive sites. Since someone is unlikely to visit your dealership to see a car they didn’t even bother to click on online, this is a simple yet powerful way to compare how many “eyeballs” a site is producing for your dealership. Watch this trend from month-to-month and you learn a lot about how much sites like AutoTrader.com and Cars.com are producing for you versus your dealer website.
- Rank the Cost of Each Consumer Impression: If you really want to understand what it’s costing you to get those “eyeballs” on each site and see where you are really getting your money’s worth, divide the number of consumer impressions (#2 above) by your spend (#1 above) and you’ll be able to see where your ad dollars give you the biggest bang for your buck. Once you know what each consumer impression costs you can see if the sites you pay the most justify the extra spend. This will also reveal if a site is producing consumer impressions at a bargain, and therefore might justify more spend.
- Rank Your Direct Leads: One of the real challenges with measuring your online vendors is that they will tell you since most of your in store traffic doesn’t email or call you before showing up, they can’t be measured. One way to overcome this problem is to compare the number of direct leads (phone calls and emails) you get from each vendor. While this doesn’t give you the “invisible leads” vendors talk about, it does let you compare vendors on an “apples to apples” basis so you can see which vendors are serving up opportunities to your internet department or BDC.
- Rank the Cost of Each Direct Lead: We also encourage dealers to divide their direct leads by the spend allocated toward each vendor to compare the cost per direct lead for each vendor. This should give you a good feel for how each vendor compares to the others on direct leads to help you bring “Pay for Performance” to your leads.
The Big 5 metrics may seem simple but that’s because these are the “drivers” of your web business. When tracking critical metrics, the key is in how you use them to manage your business and, in this case, how you manage your vendors. If you are serious about “Pay for Performance” you need to know these metrics and use them to make spend decisions every month.
The real power comes in when you start benchmarking the Big 5 so you can see how you stack up against other dealers. Our MAX Digital Performance Analysis introduces benchmarking to the equation and gives dealers the insights to manage their vendors and spend so that they can take performance to the next level.