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The Most Abused Statistic in Automotive Internet Marketing

There are a ton of numbers in the various analytics programs out there. Many are worthless. Others are even misleading. The concept of analytics is to help us to analyze the performance of our websites. Unfortunately, they often do little in the way of analysis and more in the way of promotion.

It's for this reason that I'm a big, huge fan of Google Analytics. It's far from perfect, but it has certain qualities that make it worthy of attention:

  • Third Party Trust - If your web provider is supplying the analytics, it is pretty much guaranteed that the numbers are not accurate. Skeptical? Install Google Analytics (or any other trusted third party source) and compare. I've never seen numbers on any home-grown analytics program that do not inflate or otherwise improve the perceived performance of a website.
  • Portability - If you're like most dealers, you change your website provider from time to time. It's natural. The challenge that faces many is that the home grown analytics aren't portable to another system. Keep accurate, ongoing records by getting portable analytics installed immediately, just in case you do move to another website solution in the future.
  • Power - It surprises just about anyone who dives into Google Analytics that the platform can be so powerful. By "diving in" I mean actually going through the free training that Google offers. You can do things with the platform that you probably would never have dreamed of otherwise.
  • Easy Analysis - One thing that Google Analytics has is an abundance of people who understand it. At your dealership today, if you sent an email asking your staff if anyone is very familiar with Google Analytics, you will be surprised at how many experts there are. Whether they've applied this knowledge at other businesses or if they're running their own websites, it's a safe bet that someone at your store knows Google Analytics inside and out. If not, there are plenty of experts out there in and out of our industry who can help.

Before anyone asks, no, I'm not being paid by Google to say these things. I'm a firm believer in the platform. I have been for a long, long time. I think it's insane for any dealer to rely on their website vendor's platform solely. It's not that you shouldn't look at what they offer. It's that you shouldn't necessarily trust what they're telling you.

 

The Most Abused Statistic

There are plenty of numbers that vendors throw out there. Most are legitimate. Others are designed to make their offerings look better than they really are.

The most abused statistic thrown around in the automotive industry is "Conversion Rate." It is often considered the most important statistic to look at when judging website performance. In reality, nothing could be further from the truth.

If your marketing efforts are working, your conversion rate will go down. Most dealers are surprised by this statement. Most vendors adamantly disagree. It's not debatable. It's a well-known fact to those who understand how search marketing and other internet marketing efforts work, especially those outside of the industry. Automotive seems to be the only industry that tries to hide this fact.

There are many reason why this is true, but here's the easiest one to understand. One of the goals of your search marketing efforts is to expand your market reach. People in your local area can find you today. They are searching for you by name in most cases. Check your analytics and you will find this to be true.

With search marketing, you are trying to reach people who are not searching for you by name. You are trying to reach into your competitors' markets. You are trying to cast a wider net. Unfortunately, the result is that your conversion rate will go down and this is confusing to some.

The only number you really want to affect is your total conversions. You want more leads. Effective search marketing makes this happen. As more traffic from other areas starts coming to your website, the chances of them becoming a lead diminish. If Jeff is in Lebanon, Ohio, and he starts ranking for the term "Cincinnati Ford Dealers" 40 miles away, he will get more leads. However, his conversion rate will go down. People who search for his dealership by name are going to offer the highest rate of conversion. Once he starts branching out to other areas, suddenly his rate goes down but his total leads go up.

He's not losing any of his other leads by ranking in a competitor's area. He's simply increasing the traffic with people who are less-likely to put in a lead. That doesn't mean it's bad. If he's getting 500 leads today against 10,000 visitors, his conversion rate is 5.0%. If he expands to be found in other areas outside of his immediate vicinity, traffic and leads will go up but his conversion rate will go down.

Last month, he got 500 leads from 10,000 local visitors to his website. This month, he is ranking better in other areas close to his. Now, he's getting 540 leads from 11,000 visitors. His total conversions went up by 40 but his conversion rate went down from 5.0% to 4.9%. As he continues to expand his reach, the same thing will continue to happen - his rate will go down but his leads will go up.

* * *

There are other misleading statistics out there and we will be going over them in-depth on my webinar on Wednesday titled, "How to Simplify Analytics to See the Numbers that Make a Difference". I strongly encourage dealers to check it out. After all, it's free (as always).

Check it out on Dealer Webinars.

Views: 871

Tags: Google, J.D. Rucker, abused, analytics, automotive, conversion, internet, marketing, measurement, rate, More…statistic, visitors, webinar

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Comment by Chad Annis on October 29, 2012 at 1:34pm

I agree. Thanks for sharing!

Comment by Timothy Martell on October 16, 2012 at 8:18am

JD, you have been on a roll lately. That's not to say that your content isn't always interesting, but your most recent articles have really hit home about the realities of digital marketing in the automotive space. Great post!

Comment by Thomas A. Kelly on October 16, 2012 at 6:17am

Great post JD. In the category of "......designed to make their offerings look better than they really are...." Easily gamed are Compete and Alexa...Every once in a while I see vendors point out stats from them. They are only as good as the input and if I have input it will be as good as I want them to be.....I gamed Compete to 130,000 visits/mo. (with screenshots) for two months just to point it out and there was no feedback on the forums????...I looked around and there were only vendors in the room with me...Imagine that??....Same with Alexa...If anyone wants their website to be in the top 1% of the world according to Alexa...it takes as few as two IP addresses and about 90 days....Show me Google and you have credibility with me.

Comment by Jeffery Sterns on October 16, 2012 at 6:15am

This article really resonates with me!

I agree as an individual... and my business agrees that the number of leads is the deciding factor of a site's or a marketing effort's "goodness". A very frustrating thing for me in my business is when I try to have a "conversions" conversation with a dealer. I will ask about their monthly unique visitor count to try to estimate for them the typical result of adding our chat product and service to their site (it can be targeted as a percent of unique traffic. Also it can be checked by figuring a typical 40-60% additional leads over and above sales related contact forms. This is where it can get frustrating). Too often for my comfort (I get scared for the dealer), I will hear "5000 unique visits and 1700 conversions! You will add another 850 leads (adding 50% more leads) from chat?" And I have to swallow hard. "May I see your stats, please?"...then while looking... "Let's remove the clicks for "business hours" and "address" and "phone number"...and "service" for now (we will indeed get service leads but that's a separate stat)....ah... SALES RELATED 'CONTACT US' FORMS FILLED OUT...100 (not 1700!). 2%...now it makes sense." 

I get that website providers want to look as effective as possible. To allow their client to walk around believing that 1700 out of 5000 unique visitors are 'conversions' is sad.

The dealer that doesn't heed J.D. Rucker's advice and know where he or she is really at (good or bad) can't know if they are moving the needle in the areas that matter ('leads harvested' and ultimately "vehicles sold" and "people/ database to continue marketing vehicles and services to").

Great article. I think I will forward it to all dealers before a consult!

 

Jeff Sterns

VP of Sales & Business Development

CarChat24 

jeff.sterns@CarChat24.com

Twitter: @JeffCarChat24

Toll Free:  (800) 510-7567 ext 702

Mobile: 727-638-0069

Fax: 800-430-1535

 www.CarChat24.com      

"Helping car dealers sell more!"

Comment by Andrew Compton on October 16, 2012 at 6:11am

Statistics are like a bikini. What they reveal is interesting, but what they conceal is critical.

Comment by Helena Saab on October 16, 2012 at 6:04am

All website metrics need to be taken in totality of the big picture.  They are all signs to us as to what is working and what might not be.  When traffic is increasing - in search, paid, direct - and conversion rate also increases or stays at a strong 7% - then that IS an important metric.  When bounce rate is 50%, but we're advertising on Pandora and there are thousands of accidental mobile clicks, that tells us at least Pandora is running our ad and that bounce rate is OK.  Of course it will affect other metrics (like conversion).  

Comment by Jim Flint on October 16, 2012 at 5:43am

JD, you nailed it . . . again.  Great info.

A few years back I realized the same.  We had 400 sales at one of the stores I was working with, but only 320 conversions.  Was I after website conversions or sales?  Answer: Sales.  Plus there was no way I was converting conversions @ 100% so I set my sights on revenue drivers (read: sales) as the real test.

Thanks again.

Comment by Bernard McGranaghan on October 16, 2012 at 1:47am

Nice article and great advice.

Comment by Michael Cirillo on October 15, 2012 at 11:23pm

I agree! Thanks for sharing this valuable information J.D. 

Comment by Ralph Paglia on October 15, 2012 at 9:12pm

@0boy - Like you, I thought the the last year of Panda and Penguin Google updates, along with the paranoia that all the SEO freakazoids seemed to want to create, would have permeated the collective consciousness of the auto industry... Then this past August I ran into it in a big way.  I won't ID the vendor, because I like those midwestern guys that run the company, but let it be known it was not KPA/TK! These guys had autmated page duplicating systems that inserted the name of every city in California into the URL string as it generated duplicate content pages, then it did it again for each customer's name, again for each vin of every vehicle sold or in stock, etc.  So, you know what happened, Google hit them with a ten page penalty in SERP rank... When you searched for the dealer's name, exactly the same as the domain name, the site was listed at the bottom of page 10!  Yet, the vendor tried to say it had nothing to do with over 200,000 duplicate pages and spammy URL's indexed for the site... They tried to say that the indexed page count was the solution and not the problem!!! Anyways, we got it turned around and with some help from friendly contacts at Google we were able to recover in about 4 days.

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