There’s a push among some automotive digital marketers to shift dealers’ focus away from traditional return-on-investment measurements (like leads, calls, and sales) toward multi-touch attribution.
While this isn’t about the attribution models being pitched by everyone from Google to your website provider, it would be helpful if I gave an overview of the multi-touch attribution argument.
Multi-touch attribution provides insight into the (mostly) online journey for some of the buyers and shoppers in your market. Its intent is to convince you that because some of your buyers visited a given website, this website deserves some credit for the sale — even if the website never generated a call or a lead (or was even the last source visited by the buyer before they arrived on your lot).
Feel free to debate the merits of this avant-garde approach; I’m here to discuss basic tracking and measuring of those crusty old leads and sales.
Internet Sales 101
I truly cannot believe I’m writing about this in 2017.
However, I worked with two new clients and I asked for some very simple tracking reports showing the previous month’s performance and year-to-date results for both their lead-focused digital marketing vendors and those who manage their internet sales prospects.
What I received was startling. Both (unrelated) dealers provided me “reporting” that lacked actual valid measurement. Without basic reporting, there was no way to make decisions on their digital marketing budgets or their personnel. Yet, these dealerships had been making such decisions based on this worthless data.
There is a litmus test I use for digital marketing vendors. If it’s not clear from the reporting whether you should increase, decrease or hold your budget steady for a given digital marketing provider, then cancel that vendor and use that money to buy billboards on bus benches. That way you can see your ads when you drive around town.
It’s Not Rocket Science; But, it is Math
Wait, if I’m tracking the wrong stuff, what should I be tracking?
For every digital marketing vendor you employ, you should (at least) track and measure the following:
- Opportunities Generated – Includes the valid, non-duplicated leads, calls, texts, chats and any other measurable prospect contact.
- Connection Rate – Percentage of opportunities with which you were able to connect. (A very low relative connection rate, for example, might reveal a source sending you unqualified leads.)
- Sold Units – Duh.
- Total Gross – Knowing the front and back grosses produced by a given lead source allows you to better evaluate those sources that generate few leads, but may close at a high rate and/or deliver maximum profits.
- Cost as a Percentage of Gross – Divide the cost of a digital marketing vendor by the total gross produced by this source.
- Use these same basic measurements (save for the Cost as a Percentage of Gross), as well as Appointments Shown and Sold, when determining the effectiveness of your team’s performance.
Anything less than these measurements and you’re flying blind. You have no idea whether to spend more or less with a vendor or whether or not to give a certain BDC agent more or fewer leads. Additionally, you have no idea which employees are working their opportunities, following your processes, or even making their phone calls.
It’s Not Even Close to Complicated
Once you begin properly tracking the performance of your digital marketing vendors and those tasked with responding to/selling these prospects, create some minimum standards and goals so that you can decide where you’re missing the most opportunities.
For most dealers, these objectives are a good place to start:
- Connection Rate – Expect a minimum 65 percent for the average basket of leads, with a goal of 80 percent.
- Appointment Shows-to-Opportunities – For the average lead/call mix, expect a 25 percent rate, with top performers generating a legitimate 35 percent.
- Appointment Shows-to-Connections – Discover if the reported connections are real or faked. Expect a 35 percent rate for average lead mix, with your best people achieving close to 50 percent.
- Appointment Show Rate – Top performers get 70-80 percent of their appointments to show; those new to appointment setting can deliver 50-60 percent.
- Appointment Close Rate – Average for an untrained dealership team is around 40 percent; top dealers should close 80 percent.
Sounds Simple, Right?
It is quite simple – and a great way to manage your business with much less effort than you’re expending today.
For those dealers who believe they’ve got these metrics covered and hitting at or near the top; I say, excellent, you’re ready to launch headfirst into multi-touch attribution.
For the rest of you, dive into the data you have (or can easily generate), pull out the metrics that matter, track and measure these over time. Hold vendors and your team accountable to help you grow via digital marketing.
Or, you could always just move this budget to your bus bench billboards’ campaign. At least you can see your marketing dollars working for you.