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What are the key measurement criteria that you use to guide your focus in the dealership's Internet Sales operations? I am attaching numerous spreadsheets and reports that show some examples of what i have tracked in the past, but would love to get both input and feedback on new items as well as the spreadsheet templates I have uploaded to this forum...

I have removed the Courtesy Chevrolet examples at the store's request and added in a few templated spreadsheets as both tools and discussion starters.

Tags: Department, Internet, Metrics, Sales, digital, marketing, paglia, ralph, reports

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You can't manage what you don't know, and today's website back end analytics provide the most comprehensive tools to measure ROI ever available from any media ever used to sell cars - period! The charts, facts/figures and computations that you provided are excellent examples of relevant information needed to direct SEM investments and assign accountability to individuals for their performance in the internet department. If all departments in a dealership, and every media or marketing investment, were managed using comparable data we would all be enjoying record sales and profits.

That said, I think the most important point I can add to the issue that your question surfaces is that the problem with many provided statistics is that they are often skewed to fit the website host and their SEO and/or SEM programs rather than to benefit the dealer. Conversion rates, for example, often include raw data from landing pages and/or 800 numbers that rarely translate into workable leads or usable contacts. The ability to qualify data - rather than quantify data - is often abused in self serving conclusions that mislead dealers into thinking that they are doing a great job when in fact the criteria for the statistics are selected to impress the dealer rather than sell more cars or insure a real ROI.

The key is not the raw data, but how it is interpreted and applied to improve selling processes and individual productivity. The bottom line is still built on money out vs. money in and the combination of art and science needed to properly select relevant statistics and assign them in a problem/solution format is the real solution needed by dealers.

Another intentional re-direction often used by Internet "experts" is that they have created their own language when describing standard selling statistics - like closing ratios vs. conversion rates - much like leasing agents transformed interest rates into money factors and residuals to confuse their customers.

The point is, its not just the facts but how they are accumulated, interpreted and applied that matters.
I would agree generally with everything you said. "Data dump" is running rampant in our industry. Dealers make sooo many decisions based on the bottom line on a statement, with little regard to the intangibles that get affected, underlying causation, etc, ie turnover or pay plan changes.
It is clear that certain statistics, or benchmarks, and Best Practices, which are truly "measurements" of success or failure, must be monitored, ie response time, follow up, process process process, leads converted to appointments, appoints set to show, show to sold, ROI of lead providers, as many people make the mistake of signing up for 6-8 lead providers, when 2-3 solid ones, plus a path to pushing more to their own site, is all that is needed.
In other words, get the basics down, then as you grow as a department, a "deeper dive" into statistics can be used to tweak and direct future growth. It is imortant, though, to track things like for those visiting your site, what is the main "exit page" and why, how long are they staying on your site (6-8 to maybe 10 minutes is optimal).
The biggest problem with statistics can also be, garbage in, garbage out, as without proper supervision, they can be easily manipulated.
Bottom line: it is more likely than not, that if a department has proper staffing to handle the leads, follows up quickly, consistently and with quality, there is a mind-set that a lead is a lead is a lead, and the sales dept/desk treats the customer differently (since the #1 thing they are trying to save is time, not money), and recognize that we need to sell the appointment, not the car, before they get here, that the numbers will take care of themselves.
Numbers/stats CAN identify specific process breakdown areas, if the stats are legit and verifiable. But they are only a piece of the puzzle. The "basics" seem to be the hardest part. I always focus on those first, second and third.
Philip,

There is a lot of wisdom in your commentary... I agree with the points you are making and would like to add in that all too often a dealer's success (or failure) is the result of a combination of many different activities, tasks and processes being executed (or not) that all come together in a way that creates multiple layers of synergy. I myself have spent many days and nights trying to juggle and balance all the various forces and factors that need to come together to produce people walking into showrooms and leaving in vehicles they have purchased during that visit. There is no doubt that most dealership employees and suppliers either pluck out the pieces of data that serve their own agendas, or even outright manipulate and distort the data into showing the point or principle they want to convey. I myself have often plucked out select metrics, cherry picked if you will, to make a business case for something I believed would help sell more cars. However, the reason why anybody does that sort of "cherry picking" of data is because there are many more complicated sets of factors that influence where and when people buy cars than the overly simplistic marketing and sales process metrics we all tend to get fixated upon. For example, I once showed the owner of a dealership I was working at a straight, unadulterated print-out of a Google AdWords campaign report. I was explaining why the campaign was not very good because my average cost per lead was over $100 each when he stopped me to ask what the "4,323,561" number in the report was referring to... I responded that he should not pay attention to it because it was the number of impressions, how many times the advertisement or sponsored link appeared on a web site or as the result of a search query... He looked at me and frowned... Then he said; "regardless of how many leads your department received, if you are showing ads to people in this town over 4 million times a month, then those ads are effecting the showroom traffic coming into this dealership... I want to see what these ads look like that people are seeing 4 million times a month". That was a big lesson to me... The fact is that digital marketing has reached the point of critical mass where it will impact the entire dealership.
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frank,

Speaking of throwing numbers out there... It's Clarification Time on your comment; the 3.59% closing ratio was on THIRD PARTY SUPPLIED LEADS, with an aggregate close ratio on 144,000+ leads of 7.91% for total sales of 8,092 new and used vehicles... As you poiinted out, there is a lot of difficulty in justiying ROI on 3rd party leads, however, keep in mind that we are looking at data from a LOT Of LEADS, and the second year there was a continued shft from 3rd party leads over to self-generated leads. This was part of a planned strategy to grow our in-house lead generating efforts and gradually reduce the volume and money spent on 3rd party leads. Here's the summary.

Totals From All Sources 144,696 42,402 29.30% 8,092 7.91%
Digital Marketing Generated Leads 34,327 16,284 47.44% 1,722 9.54%
Independent Inventory Listing Sites 4,613 2,002 43.40% 185 7.09%
3rd Party Lead Providers 54,481 14,211 26.08% 1,447 3.59%
GM Sites and Lead Sources 7,492 2,501 33.38% 425 8.52%
Phone/Walk-Ins from Digital Marketing 28,809 5,656 19.63% 2,622 11.32%
BDC Recycled/Proactive/Referrals 14,454 1,661 11.49% 1,611 12.59%
Non-Internet Related Sources 520 87 16.73% 80 18.48%

In order for a dealer to "wean" themselves off 3rd party lead dependency, the store must ramp up its development of sel generated leads first, so that the Internet Sales Team continues to produce sales and commissions during the transition. With that said, it has been my experience, and the number show that self-generated leads are "worth" about 300% of what a purchased lead is worth... This then gets to be almost a form of Karmic ulillment when you find out that it costs anywhere from $25 to $75 a lead to self-generate leads in major volumes within a dealer's market area. Of course, genrating Honda and Toyota leads seems to cost a lot less than generating Chevy and ford leads, but that is driven by forces beyond the dealer's control... That's my opinion, and I have approved this message!
PLEASE NOTE: Courtesy Chevrolet has requested that I remove the previously posted metrics examples, and I have done so. I will publish "fictitious" examples that illustrate the points being made ASAP.
Ralph,

The key statistics that must be tracked are the number of leads, contacts, appointments made, shows, F&I encounters and deliveries. These must be tracked in not only raw numbers but as a percentage as well. To take it further you must concurrently track what would be deemed as a bogus lead on a parralel surface with your overall leads to determine success of a given provider. On the other side of the coin you must also track the cost of each of these stats and finally determine ROI. I have found it is critical to track the floor in the same comparison as the Internet if you are going to get a true number.
Dennis,

Nicely put... Concise and to the point, and I absolutely 110% agree with you!
I am uploading the attached Files and Spreadsheets For my Friend Sylvain Beauchamp, his Internet and BDC manager, Erin, and the Mazda store in BC where they work... I hope you Find these to be useFull!
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There are many ways you can use online advertising to drive increased volumes of "self-generated" leads... Just remember this, learning how to become a good angler and eating fresh, wild-caught fish (your own leads) is a heck of a lot better than buying week-old farm raised and slaughtered fish (3rd party leads) at a Safeway Supermarket (lead provider)... IT may not be for everyone, but those of us who have done will never go back to being totally reliant on lead providers. Click on the image below to learn more:

More reporting spreadsheets that can be downloaded, revised and customized for use in any dealership...

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Thanks for sharing, Ralph. I answered a similar dealer question on DrivingSales a year ago and think it still applies... http://www.drivingsales.com/discuss/what-are-standard-bdc-metrics

 

"How should BDC representatives be measured effectively and with what metrics?"

Measure them based upon:
a) average response time, 
b) average # of days it took per prospect from lead to close, 
c) # of new prospects received this month, 
d) # of prospects still active from prior months, 
e) # of prospects with actual contact made, 
f) # of appointments set, 
g) # of shows, 
h) # of closed, 
i) % of closed deal revenue vs. new lead expense.


"What are standard appointment scheduled and appointment show percentages for both phone leads and internet leads?"

In my experience, both running and then working with hundreds of dealerships' BDC and Internet Departments over the past decade, it really depends on the following factors:

1) How many prospects is each appointment-setter handling monthly? 

Optimally, depending on skill level, each BDC rep should be able to reasonably handle 150 new leads/mo., while simultaneously following up with as many as 300+ unreached and unsold prospects from just the 2 or 3 prior months. 

A remarkable person can effectively handle 250 new prospects per month; meaning there are also as many as 500+ additional older prospects (just from the prior 60 days) to continue to follow up as well. Only a precious few top-level BDC reps have the skill to reach out personally via phone and email to 750 prospects on a rolling monthly basis...

The more they handle, the lower your contact ratio, appointment sets and shows, and closing percentage will be. 

Optimally, with 450 prospects (150 new, 300+ older) to contact monthly, in my opinion, top BDC reps should achieve:
a) A 50%+ actual contact made percentage, or 225 contacts (including older prospects now ready to buy). 
b) From those 225 prospects reached, 120-160 appointments set should be expected monthly (30-40 weekly, 6-8 daily).
c) From the 140 average appointments set, 60-70 appointments should show. Are they greeted by the person they set the appointment with and properly TO'd to a Sales or BDC Manager? How your dealership handles the hand-off can affect your closing percentage drastically.
d) From your 60-70 shows, you should expect to close 15-35 deals per month (10% vs. new leads received on the low side, 25% vs. new leads received on the high side). I understand that this is a pretty broad range, but so many unknown variables play in here, that once the customer arrives, it's really up to the sales team to take over and make the sale happen. That's going to depend, among other things, heavily upon:
i) the inventory available (colors, options, etc), 
ii) the availability of test-drive vehicles, 
iii) whether the price and experience they received when they arrived at the dealership was consistent with the one offered online - if they received a price and came in based upon that price, then price was not likely an objection, and may have been the selling point. If they receive a different price on the same vehicle when arriving - that can kill a sale very quickly.
iv) the rapport that the salesperson developed with the potential buyer
Some dealerships are more "on-the-ball" than others, and that results in a higher closing percentage. 

2) How does your dealership address pricing requests? 

Calling the prospect prior to emailing a PRICE MENU (with choices) to address the request, or worse, never emailing any pricing to address the request, will result in lower contact ratios, lower appointments set, fewer shows, and ultimately, fewer sales. Addressing pricing up-front will allow the first phone conversation's tone to change from adversarial and skeptical (on the prospect's side), to understanding that you're willing to address any and all questions on price in a timely, professional manner. It conveys a message that you're not afraid to discuss price, which is what the majority of consumers think since it's still very often difficult to get real pricing from dealerships.


3) How long do the people in your BDC actively work a prospect before declaring it "dead"? 

Some untrained, unmanaged BDC reps give up too early in the process, after not hearing from a prospect after 5 or 6 calls and several emails (usually about 2 weeks, max). Sometimes, the buyer was collecting information to make a decision 2-3 months down the road, but since the BDC rep didn't continue to stay in touch, the dealership potentially lost out on that sale. 

The less time, on average, each prospect is worked, the fewer deals outside the current month's leads will be sold, reducing your closing percentage and wasting the opportunity to more cars every month. A good way to measure your department's effectiveness at long-term follow up would be to count the number of days the prospect was worked from the last lead received or last walk-in date.

If you'd like to hear more, feel free to reach out to me directly. You can call me at (201) 448-7253.

Sincerely,

Adam Ross
Managing Director
Infinite Prospects Inc. - Online Solutions for Car Dealerships
http://www.infiniteprospects.com
adamr@infiniteprospects.com

Adam, take a look at the date on this forum topic... I originally posted it in January 2008. What is most notable is that the executables really have not changed that much in the past 4 years. And, whether a BDC, Internet Sales Specialist, or even leads being handled by a salesperson on the floor, the customer expects nothing less than the information they requested in a timely manner delivered by professional, courteous and prompt dealership employees.

To your point Adam, we do see similar questions asked over the years... New people come into the business and they have to learn all the same things the rest of us have learned.  The difference is, they do not have the luxury f time to figure it out like those of us who started handling the first Internet leads in the mid-90's.  The newer people today need to accelerate their learning so they can earn a living and keep up with the competition who has already, in many cases, learned what they are still trying to figure out.

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