Understanding key digital KPIs is absolutely critical for achieving success in dealership digital marketing
Good dealers today understand the need for high-quality digital marketing strategies, especially considering that over 90 per cent of car shoppers begin their research online.
Attend any of the top digital conferences in North America and you’ll find some of the consistent topics over the last few years have related to Social Media Marketing (SMM), Search Engine Marketing (SEM), Search Engine Optimization (SEO), Website Optimization, Lead Management and certainly in 2014, providing a great mobile experience for the user.
Like many dealers, I often find myself asking the burning question when it comes to digital strategies, “How do I know if all this investment (time, money, resources) is really paying off and, in the end, selling more cars?”
Key Performance Indicators (KPIs) are not a foreign language to most dealers, but when it comes to digital KPIs (i.e. Unique visitors, conversion, IQR score, contact rate, etc.), it is clear that these terms still cause some confusion.
Understanding these key metrics and knowing how to take action will be a key differentiator for those dealers who want to excel in the digital space in 2015 and beyond. At SCI MarketView, our goal is to give you a “Real, Smart, View” of your digital business and to do this, we need to break down some key digital KPIs so they can be used to your advantage. It all starts with the understanding that you can only manage what you measure. Let’s take a look at some of the key digital KPIs that dealers should be measuring and using to make operational decisions. We like to break these down into two areas:
- Digital Marketing KPIs;
- Digital Lead Management KPIs.
Digital marketing drives opportunity into your lead management process. Since digital marketing is a vast chasm of media, processes and technology, grasping each component can be challenging. Rest assured, most OEMs support their dealers by offering digital co-op programs, which can provide an ideal blueprint to follow.
Website Unique Visitors: This represents the number of distinct visitors arriving at your website during a given period of time. Each distinct visitor only counts as one. So, if you have a prospect coming back to your site numerous times in this period, this only counts as one unique visitor.
Why this is important? Your digital marketing activities (SEO, SEM, Digital Ads, etc.) drive consumers to your website. As you ramp up these activities, this first-level KPI is going to be your barometer of how successful your initiatives are.
Website Conversion: The goal of every website is to convert a visitor to a lead, whether it be a phone call, chat, email, or even text. Ideally, you want to track the conversion rate of all lead types and this is done by dividing the number of leads by unique visitors. For example, if you get 3,000 unique visitors and 60 leads, you would divide 60 by 3,000, resulting in a two per cent conversion rate. Standard rates are around two per cent but those dealers that do it really well are seeing up to a seven per cent rate. Do that math with 3,000 unique visitors at seven per cent conversion, and you’ve now increased your leads to 210.
Why this is important? You can drive thousands of people to your site with your marketing efforts but if you can’t convert them, those marketing dollars are wasted. Optimized Vehicle Detail Pages (VDPs) and simplified lead forms will help you improve your conversion and drive more customers into your showroom.
DIGITAL LEAD MANAGEMENT
Okay, here is where the rubber meets the road. We’ve been in the business of lead distribution and deliver over 1.5 million leads per month. We know that if you don’t do this part of the digital ecosystem well, you are putting all of your marketing efforts at risk. We’ve consulted with hundreds of dealers and we always start with process coaching. As we like to say, “There’s no use feeding fuel into engine if it’s not running right.”
Initial Quality Response (IQR): In previous articles, we’ve elaborated on the elements of a quality response and its importance — such as subject line, introduction, vehicle value proposition and engaging questions, among others. I’ve heard from many that it makes total sense, but in reality, “It’s such a small part of our business, we are focusing on the marketing first.” But remember, a good digital marketing strategy should drive hundreds of leads your way — are you ready to give 90 per cent of those to your competition?
If you’re closing your digital leads at 10 per cent, then that’s exactly what’s happening. SCI MarketView carried out a large-scale study of the importance of the first response to the customer following an Internet inquiry.
We looked at thousands of initial email responses from almost 1,400 different North American dealerships in the first and second quarters of 2014, and scored them based on our proprietary IQR scorecard criteria.
Findings showed that when a dealer sends a response to a prospective customer and scores 70 or higher on the IQR scale, the dealer is more than twice as likely to obtain a sale from that customer when compared to a dealer sending a response with a score of less than 20. It was also found that a score of 90+ results in over four times the likelihood of a sale compared to a response score of zero. The average closing rates for dealers in the 90+ IQR score range was 18 per cent. For complete results, feel free to download the study at: Scimarketview.com/iqr-study-2014.
Why this is important? The initial contact with the prospect is a crucial touch point. With consumers cross-shopping and with one out of three switching dealerships and one out of five switching brands during the shopping phase, the IQR is crucial to establishing trust and transparency.
QUALITY MEASUREMENT IS KEY
The digital marketing world can seem elusive, and knowing what to do and when to do it will make a huge difference to the profitability of your dealership. It’s important to take an active interest in your performance in the digital realm. Google Analytics is a great tool for monitoring your digital marketing performance. If you have a trusted digital marketing vendor, ensure that it is keeping you well informed and working with you proactively in order to increase your conversion rate. A well-designed digital marketing plan is your best approach — focus on the quality of what you are putting out there and make sure you measure it.
