Professional Community for Car Dealers, Marketing, Advertising and Sales Leaders
|by Rob Campbell, Performance Improvement Consultant|
I was a Moneyball fan before it was cool to be a Moneyball fan. The best-selling book, Moneyball: The Art of Winning an Unfair Game, reminded me of how much I wanted to be a baseball player. But, as it turns out, my 6’4”, 265 pound frame was better suited for a football field.
Although I had a highly successful football career, my love of baseball never waned. And I decided— if I couldn’t become a baseball player, I was going to make fantasy baseball my Field of Dreams. Fantasy gave me the chance to pour over hundreds of player stats in the hopes of putting together the best possible team. Almost without fail, year after year, I made significant mistakes in my player evaluations based on the previous year’s stats.
So it was with great satisfaction and fascination that I watched Billy Beane blow up conventional major league scouting wisdom in the late 1990’s. As I learned more about Billy’s unique approach to talent evaluation, my own prospect of building a winning fantasy team became more and more real.
Slowly but surely, I started taking the advice that Peter Brand’s character would later dispense so eloquently in the 2011 movie, Moneyball. I stopped thinking so much about drafting players, and started thinking more about drafting runs, and ultimately, wins.
It took a little longer for me to realize that a similar logic could be applied when calculating my dealership’s advertising performance. The recent eBook, Automotive Moneyball – The Best Kept Secret to Hitting Your Digital..., outlines the striking similarities between evaluating prospects in baseball and calculating dealer advertising performance. As the eBook explains:
The authors go on to illustrate the inherent deficiencies in some of our most common automotive performance metrics:
“According to a 2013 eMarketer study, the clickthrough rate (CTR) remains the KPI most often used to gauge the effectiveness of automotive advertising. But there’s a problem. It doesn’t account for the deeper consumer engagement that may or may not occur post click.
Site visits represent another misleading metric. They suffer from a similar shortcoming as clicks. It’s called the bounce rate. Daily, a high percentage of non-shopper traffic is hitting your site and leaving immediately. And even if a visitor doesn’t bounce, what happens after she visits your home page? It’s hard to track.
Visits have always been a noisy measure. But over the past few years, the precision of the site visit has gotten even muddier, thanks in larger part to two growing Internet trends: bots and multi-device car shopping.
Two years ago, Cobalt launched the VDP crusade when we found that two online activities stood out as two of the most telling predictors of sales— time on VINs and total VDP views. The amount of time shoppers spend viewing your inventory, along with their total number of VDP views have proven to be some of the best individual predictors of car sales. The key word here is individual.
eMarketer may have put it best:
Bottom line? Leads, clicks, visits and VDP views all have value, they just can’t tell the whole story when viewed in isolation. They’re simply incomplete, partial pictures of the shoppers they represent.
To make matters even worse, these new KPI’s seem to move around more than a Phil Niekro knuckleball. As the eBook points out:
“The same 2013 eMarketer study found that performance metrics in the auto sector are not only changing, they’re constantly evolving. The report goes as far as to say that, ‘In some cases, KPIs can be useful in one moment and entirely unreliable the next.’ In short, the metrics that matter may change moment to moment. Yesterday’s KPI may mean nothing today, and even less tomorrow.”
All this adds up to a fundamental challenge to dealers:
The failure that Moneyball exposed was that of the baseball traditionalist’s over-dependence on overvalued metrics that have less of a direct correlation to wins than other measurables might. Moneyballers did more than find those missing measurables. They packaged them together to create a formula far more predictive of a player’s potential.
If only selling cars is as easy as drafting a baseball team. Scouts have the luxury of taking years to compute a player’s potential payoff. Dealers have just moments to analyze and react on the fly to the ever-changing, ever-challenging ecosystem of car-shopping demand and complexity. It’s alive. And post-mortem measurement— analysis after the fact— just won’t cut it anymore.
Fantasy baseball is just that—fantasy. But the principles of Moneyball are a reality that can change the way you do business moving forward. The authors offer a solution that can help turn your ROI measurement from fantasy to reality. I’ll be going a full nine innings on this topic in my upcoming webinar, The Dealership Metrics that Win Championships. Register today to reserve your spot!
When it comes to measuring your advertising performance, the only numbers you care about are the ones that have been proven to lead to a sale. Which KPI’s belong in your starting lineup? How can you make sure your ads are served to the right shoppers, in the right channel, at the right time, every time? Register today to find out!
About the Author
|Rob Campbell is a Cobalt Performance Improvement Consultant. His nearly 20 years in the automotive industry has allowed him to develop a unique automotive marketing skill-set. He's been able to help dealers develop new and different ways of doing business that achieve high results, and while thriving in a constantly changing environment and quickly adjusting to the individual needs of our clients. His real strength comes not only in the form of new ideas but the also the ability to get those ideas implemented.. Feel free to reach out to Mark directly at Robert.Campbell@adp.com.|