Your Q4 Reality Check: 5 Reasons Online Buying is NOT Everyone’s Reality

by David Metter

People buy everything online these days. Or do they? In reality, there are some items people simply prefer to touch, see, feel, taste, smell, or drive before they consider signing on the dotted line or forking over their credit card. Several automotive leaders have recently come out in the media claiming a vehicle is still in so many ways, one of those items.

Online car buying models have been a ubiquitous topic of conversation over the past year – one that has made many in our industry uneasy about what to expect in the future as companies like Carvana, Drive Motors, and Vroom claim their place in the market.

We’re now in the fourth quarter of 2016, the time when we line up our budgets for the year ahead. Which technologies will thrive and which will die? Will the option to offer a complete online buying method for our new and used vehicles become necessary? According to DealerSocket, “There’s a false sense of urgency to take car buying online.” If you were to ask me, I’d say the vast majority of consumers are still not ready for it.

In a recent article from Automotive News, they highlight the results of DealerSocket's 2016 Dealership Action Report. “While there is a segment of car shoppers who want to buy vehicles online in an Amazon-like experience, a new report indicates dealers may be overestimating how strong consumer demand for this capability really is.”

Actual responses are shown below:

Without a doubt, there are items consumers prefer to purchase online, things like books, electronics, or your go-to cologne. It’s also true that there is a current market of buyers that want the ability to purchase a vehicle online. However, relatively speaking, that number is still small - small enough that we can all take a big deep breath and let go of worries about completely changing our buying models and the way we market our inventory.

When it comes to big-ticket items, people overwhelmingly still choose to visit actual brick-and-mortar stores. A new eMarketer study revealed it’s not just the large items. When it comes to packaged goods or groceries, the market is not budging despite having the option for online grocery shopping and at home delivery. eMarketer emphasized several valid reasons why 90% of internet users still prefer to do their grocery shopping in-store. These same reasons for opting out of online buying can be directly applied to the car business.

If your dealership is contemplating integrating an online sales platform in 2017, make sure you consider the following five facts before taking on this monster:

1.    When people are ready to buy, the ability to purchase immediately in-store is still very desirable as there is comfort in seeing, touching and testing products (or vehicles) in person.

2.    Completing a lengthy online purchase request may be too time-consuming for customers to follow through with the entire process.

This past August, Alex Jefferson, eCommerce director of Proctor Dealerships said, “Where online buying is going I don’t necessarily know, but I do know that it did personally have an adverse effect on us when we integrated with the tool. I will tell you after a year of testing it, our lead volume went down by about 30-40%.”

3.    Less tech-savvy customers or older generations who have the dealership experience ingrained in their mindset may struggle with the concept or dismiss it altogether.

4.     Consumer income levels largely dictate their level of interest in whether or not they would prefer to buy a vehicle online.

“Half of surveyed consumers earning $100,000 to $149,000 annually would like to bypass the dealership and buy vehicles online, DealerSocket said. In contrast, 29 percent of people making $25,000 to $49,000 said they'd like to buy vehicles online.”

5.    Online buying models may be better suited for luxury or high-end electric vehicles only – one of the reasons Tesla has been successful selling almost exclusively online.

Forbes explained why a direct sales model works for Tesla. “Since electric vehicles do not need as much regular service and the company does not offer financing schemes, a dealership model would put pressure on its margins.”

Marylou Hastert, DealerSocket's Director of Product Marketing advises dealerships, “Stores should prepare for the digitization of car buying, but not at the expense of in-store processes.” Simply put, an online buying model may not be right for your dealership. It could even be harmful to your conversion rates, which dealerships have reported over the last year.

My expert opinion? Get your fundamentals down first before heading full-speed down the click-to-buy road. Online buying has been effective with some of the larger dealer groups, but they have already conquered the essentials. After you have mastered the art of securing a high-converting website and high converting forms across devices, and once your inventory is immaculately merchandised with video walkarounds, photos, and custom comments, THEN and only then should you experiment with an integrated online buying model.

Part IV: The Naked Truth Exposed [EXECUTIVE EDITION] Big Data & Attribution

Big Data & Attribution…Who Has It & How Do We Get It?

by David Metter

There’s good news and bad news on this topic…but mostly good. The bad news is AutoHook’s panel of marketing experts had so many dealer-submitted issues to solve they didn’t have time to address data and attribution at Digital Dealer 21 (as this subject could take 50 minutes alone). The good news is I now have the opportunity to step in and shine my headlights upon the industry-wide struggle I’m most passionate about. This final piece of our Naked Truth Exposed series will represent the most momentous road block dealers face today: proving without a doubt the one source that led to a sale.

First, let me fill you in on a quick story about a guy named Dayn Riegel. Dayn is the eCommerce Director of Loganville Ford and he was AutoHook’s winner of our all expenses paid trip to DD21. Why would we invest so much money in a person we had never met? Because he asked the right question. In our nation-wide poll conducted over the spring and summer of 2016, Dayn submitted the following inquiry:

“The best marketing in the world can’t save a dealership from itself – it’s own greed, ineptitude or lack of drive…lack of willingness to succeed, and I don’t mean just talk about it, do something about it. So, my question is: With all the hype around SEO, SEM, PPC, Bing, etc., who is taking all the big data and marketing know-it-all and applying it? Exactly. Nobody really, truly is. Why not?”

Thank you Dayn for giving me the opportunity to take on this challenge. This question is the reason I do what I do, as I experienced the same problems during my time as CMO at MileOne Automotive. I know firsthand, one of the most common pain points for dealers exists in the gaps (or the disconnects in communication) that form when two vendors don’t properly work together. As competition rises in the digital space, and as more and more companies enter the game, these lapses in digital communication will only continue to grow - creating more cracks in our already distressed methods of attributing a sale to a single source.

During my time at MileOne, I was fortunate enough to have the resources, contacts, a great team, and insight to do something about this problem. One of our biggest strengths, and arguably the reason we had such a competitive edge was in our ability to see the unique advantages of two different vendors, and bring them together in a way that benefitted our needs. We quickly learned that combining the exclusive technologies of two (or even three) vendors made it easier for us to sell more cars. More importantly, we had the power to track the latter half of a specific customer’s buying process, which eventually led to the creation of AutoHook’s award-winning sales attribution engine.

People in general have a tendency to overcomplicate common sense concepts. But this isn’t rocket science. If you need green paint, you take some blue paint and some yellow paint and simply mix them together.

So how do we paint the automotive marketing landscape green? I can tell you since I’ve been on the other side (the vendor side) I’ve seen a need for these types of alliances to happen now more than ever. It’s monumental to think of how much we can accomplish if we open up our strengths to others to generate a mutual benefit. What I’m suggesting, is we need to change the focus from beating our competitors, to working in conjunction with competitors to accomplish a goal that guarantees success for all parties - and not just for vendors, but for dealers and OEMs as well.

As Dayn referenced, there is an undertone of greed throughout both dealer and vendor communities. Everyone wants to make more money. Everyone wants to be #1. Everyone wants to keep proprietary technology a secret. But let’s take a step back. Let me spell this out in the simplest way I possibly can. In order to solve the ambiguity that shadows big data and accurate attribution in our industry, we have to do one thing: change our mentality.

Here’s how. What if instead of keeping secrets, we shared knowledge and worked together? What if we connected the automotive universe and created one cohesive, more efficient railroad system? Wouldn’t this drastically reduce disconnects in our data and reporting? Right now, we are on the precipice of change. No one can argue that there is strength in numbers. We need to unite, rather than surround our solutions with egotistical walls, in order to reap the benefits of the bigger picture.

Going back to Dayn’s question of, “Who is taking all the big data and marketing know-it-all and applying it?” The answer is, WE ARE. AutoHook, powered by Urban Science has the fastest, most reliable sales attribution path data in the industry - 99.7% to be exact, and 95% of that data is updated daily. No one can compete with that! Furthermore, we know how to apply this data to prove our solutions directly led to a sale. So not only do we have the data and know what to do with it, but we’re willing to SHARE our AutoHook rail system and API technology with the entire industry…FOR FREE.

Imagine that, an open API that gives all automotive entities the power to finally attribute vehicle sales to a single campaign. What? Why? How can we do this? First of all, we know for a fact we have access to the most reliable and timely sales data from Urban Science. We also know that achieving accurate attribution is trifold.

First, the solution needs to execute. Second, it needs to be validated with performance reports that show concrete evidence of incremental sales and lift in conversion. This requires vendors to surpass irrelevant vanity metrics such as clicks, impressions, and site traffic. Is there any paid search company out there that can prove to a dealership that one of their search campaign clicks resulted in a sold vehicle? The answer, just as Dayn suggested, is absolutely not!

The third piece of our bulletproof attribution model is that it’s personalized and unique to each customer, further eliminating breakdowns in sales data. By assigning a unique code to every user, we can track all post-interaction behavior. How many people walked into your showroom as a direct result of our solution? Did they end up purchasing or not? What model did they purchase? Are they new to your brand? And what led them to your store?

What if the solution to this problem afflicting dealerships, OEMs, and vendors could be as simple as breaking down the walls that separate and limit us? What if we stopped nickel and diming dealers for every integration they request? The ideal solution for obtaining actionable data must be suited for omnichannel use, meaning available to all publishers and vendors across all types of media outlets, hence the concept of an open, free API.

My friends, this is the beginning of an era. This is how we provide the world with access to big data and the reporting needed to turn it into a story worth sharing. This is how our industry becomes more efficient, more streamlined, and more powerful. If we can patch the holes of automotive’s digital rail system, every vendor and dealership can finally validate the true ROI of their marketing investments.

Stay tuned for more to come on how AutoHook will be providing free API access to all.

If you missed part I, II, or III of our Naked Truth Exposed series, check them out below:

• Part I: Social & Video Marketing
• Part II: Paid Search, Retargeting & Budget Allocation
• Part III: Online Buying…Should we do it?

Part III: The Naked Truth Exposed [Online Buying]

Online Buying...Should We Do It?

by the AutoHook Marketing Team

This particular blog will cover arguably the most controversial topic inundating dealer forums like DealerRefresh and other automotive digital communities. This is the question of the moment, and perhaps the largest generator of both debate and uncertainty creeping up our industry’s horizon.

After AutoHook’s nation-wide survey conducted over the last three months, the top five digital marketing topics dealers currently struggle with were exposed:

1. [Social]: Does Social sell cars?
2. [Video]: Video, video, video…tell me more.
3. [Paid Search, Retargeting & Budgeting]: What should we expect?
4. [Online Buying]: Should we do it?
5. [Data & Marketing Attribution]: Who has it and how do we get it?

The first three topics are covered in parts I & II of The Naked Truth Exposed Series. Check them out below:

• Part I: Social & Video Marketing
• Part II: Paid Search, Retargeting, & Budget Allocation

THE QUESTION OF THE MOMENT: Should I make my vehicles available to buy directly on my website? Is it necessary if I already have a successful brick and mortar store?

So, what did AutoHook’s Naked Truth defenders have to say about online buying at Digital Dealer 21? First, let’s reintroduce our expert panelists and reveal what they shared on this undecided topic.

Alex Jefferson (eCommerce Director, Proctor Dealerships)

“Where online buying is going I don’t necessarily know, but I do know that it did personally have an adverse effect on us when we integrated with the tool.”

The challenge with online buying is there are two very different perspectives on the topic: the consumer’s perspective, and the dealer’s perspective. Proctor Dealerships recently tested an integrated online buying model on their websites over a one-year time period. The tool gave customers the ability to formulate payments, value their trade-in, and complete most of the purchase process online - the overall goal, of course being to save the time consumers spend physically at the dealership. However, what Alex and his team found is that “people are lazy.” They don’t want to take the time (even in the comfort of their home) to navigate through this integrated, lengthy form.

Alex’s advice? What works best for his stores is integrating separate “get your price” buttons, trade-in tools, and finance or credit apps on their sites. It’s three separate forms, but they are quick and easy to fill out. This process also works better for non-tech-savvy customers, and it has been highly effective for Proctor stores specifically. A single buy online method may be too long and too time-consuming for a lot of people, and it can also negatively affect your conversion rates. As a rule of thumb, it's always best to keep online forms as short and straightforward as possible. The easier it is to complete, the higher your conversion rates will be. Alex tells our Naked Truth audience:

“I will tell you after a year of testing it, our lead volume went down by about 30-40%.”

On the contrary, DD21 interview between Chief Editor of DealerRefresh, Jeff Kershner, and CEO of Drive Motors, Aaron Krane disclosed opposing evidence.

DealerRefresh: What is the feedback like from dealership personnel at dealerships offering consumers this option?

Aaron Krane: Dealership staff love that customers who use online checkout will not only sell themselves but also upsell themselves, while the store is closed. That means orders through Drive Motors convert to a sale at over 10-times the rate of leads, and have a higher PVR than many stores’ averages. Moreover, in the words of one dealership, online checkout customers are “ecstatic.”

Kelly McNearney (Senior Automotive Retail Strategist, Google)

 “All I care about is online video.” 

Kelly allowed fellow panelists, Scott Empringham and Alex Jefferson to answer the bulk of this question. However, she made sure to emphasize the role video plays when it comes to showcasing your inventory digitally, as it can nurture the online buying process.

If (or when) buying online becomes mainstream, inventory-specific video will undoubtedly play a role in increasing “buy it now” conversion. Why? Because if customers can virtually touch, feel, see, experience, learn about, and test drive the vehicle in consideration, it’s possible they’ll obtain enough information on its specs and benefits to click that change-driving “buy it now” button.

During her 2-Minute Interview, live at #DD21 with Flash Point’s Scott Empringham, Kelly McNearney shared Google’s #1 tip to help dealers sell more cars, trucks, and SUVs right now. “If I was opening up a dealership today, the first thing I would do is start making YouTube videos, walkarounds, test drives, and features to show people the inventory on my lot.”

Customers aren’t visiting as many dealers as they used to. Google shows consumers visit 1-2 stores before making a purchase. People know what they want before walking into a dealership. New, inventory-focused video merchandising technologies will only further support that fact.

“People want to make decisions at home, on the couch.”

…And Kelly's right! When you think about it, people don’t want to feel pressure from a salesperson to make any life-altering decisions on the spot. A vehicle purchase is the second largest purchase consumers make after buying a home. There is a lot of emotion, stress, time, money, and energy that goes into their decision that dealers don’t always recognize or acknowledge.   

Scott Empringham (CEO/President, Flash Point Communications)

“I don’t think it’s a question of is it going to happen, it is happening. If you’ve got your fundamentals down, and that’s something you want to experiment with, I say go for it!”

Scott does caution if you haven’t first mastered the fundamentals (things like digital merchandising, relevant photos and videos, a high converting site, simple, high converting forms, etc.) jumping into online buying can be a waste.

Asbury Automotive Group for example, rolled out online buying across their stores, and other large progressive groups like AutoNation and Penske have done the same. Asbury is a Flash Point client with a huge digital marketing team, and they successfully participate in an online buying model today. However, the vast majority of Flash Point customers don’t necessarily have the resources Asbury and similar groups have to make this system work.

Brands like Honda, Toyota, Ford, Chevy – those are value-buy vehicles. People want and need to physically sit in the car to determine if it’s right for them. On the contrary, when it comes to aspirational brands like Maserati or Lamborghini, or someone who collects cars as a hobby, people would be more likely to buy these types of cars online. Obviously, Tesla has been doing it successfully for years.

At this time, the best answer experts can provide, when it comes to whether or not dealers need a buy it now button is…it depends. There are stores that have been successful with it, and there are stores that have not been successful with it. The key is to have your ducks in a row (or in other words, a website that converts at a high rate) before rolling out a nation-wide online buying program.

Bill Playford, VP & Partner of DealerKnows Consulting called out the topic in his June 2016 DealerRefresh article, Buy it NOW! The Button that Drives Change.

“I know this is giving some of you heart palpitations, but it’s once again that time to rethink the way we approach our customers. Not everyone will want to utilize a Buy It Now button. But, by not incorporating it into your process, you are disenfranchising a segment of your population who would click this and purchase almost 100% online.”

The key consideration with online buying, and with your dealer operations in general, is going above and beyond to make things convenient for your customers. Make your end model fast and easy. If you can manage one platform great! If not, do everything you can to make your process smoother on the customer's behalf. Build a loyal customer base now, because you never know - they could be buying their future car from you, right off your website.

A huge thank you goes out to DealerRefresh & Flash Point for capturing all the Naked Truth magic live on Facebook. Click here to watch the recording!

For additional resources or information from our panelists, visit DriveAutoHook.com/NakedTruth.

The Mobile Tipping Point

By David Metter

For those of you who have never heard of the phrase tipping point, there are a lot of variations in terms of a definition - depending on who’s asking. To physicists, the tipping point is when an object gains enough nuclear material to sustain a chain reaction at a constant rate. To computing geeks/experts, “The tipping point is the critical point in an evolving situation that leads to a new and irreversible development.” To a “car guy” it could be when a customer walks into your showroom five minutes before closing time on a Saturday. We have all had a few of those. According to TechTarget, marketers define the tipping point as “a threshold that, once reached, will result in additional sales.”

No matter how you look at it, the concept is so profound that it will forever define the current state of mobile marketing in both the physical and digital automotive worlds. One of the reasons mobile has caused such upheaval in our society is because both smartphones and tablets are so incredibly personal to each individual user. In fact, Tune dictates the smartphone as the single most personal device, ever. “Because of that, it is the everything device: the communicating, the gaming, the learning, the buying, the reading, the watching, the tracking, the remote controlling device.”

Consumers are now spending more time playing on these intelligent little microcomputers than they spend watching television. In a recent eBook from Tune Marketing, they provide insights into the international mobile economy, showing mobile usage trends to be nearly equivalent in most countries. Globally, in 2015 alone, 800 million people bought their first smartphone. It is predicted that by 2020, there will be 6.5 billion smartphone users. That’s 6.5 billion people to market to. It’s also 6.5 billion opportunities to make a connection, or 6.5 billion chances to get buried in mobile white noise – depending on how you look at it.

The mobile tipping point is not just starting to make its way through the airwaves. It has arrived, and I cannot stress that enough. These short but abundant interactions are what Google refers to as “Micro-Moments.” Mobile touch points in the consumer’s journey have become so powerful, that they will actually interrupt a person from following through with a given task. Google says 91% of smartphone users turn to their phones for ideas right in the middle of a task. Talk about a distracted generation!

Mobile has become a tipping point because it has the power to claim our attention at any given time and place. Mobile takes no mercy, and it doesn’t apologize for being rude when it interrupts your dinner, your date, your family time, or your purchase decisions.

The most important fact to remember is that while mobile usage is continuously increasing, the time consumers spend during each micro-moment is actually decreasing, meaning your chances of making an impact are smaller, and your window of opportunity is much shorter.

During this Sunday’s Super Bowl 50, Google leveraged Adometry TV Attribution technology and found 82% of game-driven ad searches were to no one’s surprise, conducted on a mobile device (a 12% increase since last year’s game). Furthermore, out of the ten brands that drove the highest search volumes, five of them were either OEMs or vehicle brands – so as an industry, we have to be doing something right!

There’s no denying it. Mobile has forever changed the way marketers interact and reach consumers. We’re all slaves to it. The swiping, the scrolling, the click-to-call-ing, the convenience. In so many ways the mobile experience dictates not only where our marketing should be, but also the entire advancement of communication as we know it. My friends, the mobile tipping point is here.  

Check out our Mobile eBook for more ways to master mobile in the year ahead. 

A Primer on Mobile Wallets and How Dealers Can Benefit From Them

By David Metter

If you have a smartphone, chances are you have Apple Wallet (formerly Passbook) or Google Wallet. These applications are mobile wallets that store, among other things, applications like Apple Pay that enable people to purchase things with their phones. Of course, it's very unlikely that anybody is going to purchase their vehicle by swiping their mobile device. For that reason, many dealers dismiss the notion that they need to know anything about mobile wallets.

However, mobile wallets are used for a lot more than just purchasing things. A mobile wallet is the digital equivalent to the physical wallets we carry in our pockets and purses. They can be used to store many things including drivers' licenses, social security cards, payment cards, login data for websites and loyalty cards. Mobile wallets are also used to store gift cards, coupons and authentication codes for boarding passes, public transport tickets, movie and sporting event tickets, and house and car keys.

For dealerships, the "keys" to getting your brand inside of a consumer's mobile wallet include loyalty cards, mobile advertising, coupons and special offers. The good news is, once you're in there you're likely to stay there, and your digital passcode can be easily updated so you can send customers push notifications offering them new coupons and specials.

Although mobile wallet usage is not yet mainstream, familiarity and usage have doubled since 2013, according to a recent study published by market research and consulting firm Chadwick Martin Bailey (CMB). Fifteen percent of respondents reported using a mobile wallet in the first half of 2015 and an additional 22 percent said they're likely to use it in the coming six months. If that's true, over one-third of consumers are now using their mobile wallets, at least on occasion.

This growing usage presents significant marketing opportunities for dealerships. Mobile wallets provide the perfect post-click destination for coupons, gift cards and incentives. Here are several ways that dealerships can leverage mobile wallets to ensure that your brand stays top-of-mind with consumers:

Digital Advertising

Early in 2015, Honda promoted its nationwide Honda Dream Garage Sales Event through a mobile wallet ad campaign that invited consumers to tap a banner ad and save the event to Apple’s Passbook (now Wallet) or Google Wallet. The mobile ads ran on ESPN.com, Allrecipes.com and the Washington Times. Once consumers stored the event, Honda sent reminders to them as the event date got closer. Individual dealerships could easily replicate this strategy.  

Normal mobile ad campaigns can be forgotten soon after they are over. Mobile wallet marketing campaigns can be instantly updated to stay relevant to your customers' needs. Once your dealership has a digital passcode or "pass" into a customer's wallet, it's easy to push out reminders for a new promotion, much like Starbucks does.

Social Media and Mobile Apps

According to research firm Forrester, smartphone owners spend 80 percent of their time in five apps: Facebook, Maps, YouTube, Pandora and Gmail. For dealerships that advertise on Facebook, the growing adoption of mobile wallets will almost certainly result in higher click-through and redemption rates of Facebook ads. Here's why:

When a consumer is sitting at home or at work and surfing Facebook, they may see your dealership's coupon or offer, but may decide not to redeem it because they don't anticipate an immediate need, or they may forget about it as they continue to read their friends' updates. That consumer may remember later on, but the thought of having to go back to find and retrieve the offer or coupon is sometimes just enough of a deterrent that it doesn't happen.

When a consumer is checking Facebook with their mobile device, storing coupons and offers is a snap: just click on the ad or offer, click on a button that says "Add" and their mobile wallet stores the coupon or offer for future use. This makes it easy to store and organize a nearly endless supply of coupons and offers.

According to Vibes, a mobile wallet-marketing firm, 70 percent of consumers will save an offer to a mobile wallet when presented with the option and these offers have a 64 percent higher conversion rate over static mobile web coupons.

Location Targeting/Geo-Fencing

When a consumer stores a coupon, offer or event in their mobile wallet, your dealership has the ability to "ping" that customer when they enter a pre-defined area near your store. So if they stored information about your sales event and then drive by your dealership on the day of the event, they will receive a notification reminding them about the event. Or, if a consumer has stored a service coupon your dealership can send them a push notification reminding them about the coupon when that customer is within a one-mile radius of your store.

Loyalty Cards

This summer Apple confirmed it is bringing loyalty programs to Apple Pay, starting with retailers like Kohl's, Walgreens, JCPenney and Dunkin' Donuts. Could auto manufacturers be far behind? The ability to link a stored loyalty card to a local dealership's coupon, combined with the ability to notify customers about new offers, may create the "perfect storm" of incentives that will drive customers to your store.

Last year about this time, 2015 was being hailed as the year of the "mobile tsunami."  I predict the next wave in 2016 will be the "mobile wallet tsunami." Innovative dealerships will be experimenting with digital advertising campaigns, social media ads and loyalty card programs. The goal is to get into the consumer's mobile wallet, which in effect gives your dealership permission to continue sending that consumer offers, coupons and gift card incentives.

A word of warning: this privilege should not be abused by sending out a continuous stream of push notifications and sales messaging. Instead, the mobile wallet should be viewed as a vehicle for building a long-term relationship with the customers that literally opened their wallet to let your dealership brand in.​

Do More Firefighters At A Fire Cause More Fire Damage? Rethinking Attribution

When thinking about attribution, it would make everyone’s lives much simpler if there was a straight line between marketing, conversion and a sale. As car buyers increasingly visit more touchpoints in their car shopping journey, attribution becomes more challenging. 

There was an interesting analogy in a recent article on Business 2 Community that I felt nailed the challenges we face - and errors we make - when attributing a sale to a particular source. The article shared that data has proven the more firefighter at a fire, the more damage the fire caused. It was hypothesized to reduce fire damage the answer was to send fewer firefighters to fires. Of course, we all know that would probably not solve the problem, or reduce fire damage. After a deeper analysis factoring in other variables, it was found that the presence of more firefighter at fires was not, in fact, what increased fire damage. The reason more fire damage happens is because more firefighters are present at larger fires. 

While reviewing month-end expense reports to determine whether a vendor’s service is producing sales, do you simply measure cost versus revenue? Too many dealers make this mistake. All dealers - whether they realize it or not - have multi-channel marketing strategies. Some more than others. But, the simple fact is that every dealership has varying combinations of marketing channels that include print, radio, TV, online, social media, and more. How many messages from these channels did it take to compel that lead to respond, or that customer to walk through your door? It could have been one, or it could have been many. I’m sure you do your best to source customers. However, simply attributing a sale from an online inventory service based on a call-tracking number might steer you to some erroneous conclusions. 

In all probability, that lead, conversion or walk-in customer was influenced in some way by one or more of your marketing channels.  The customer may not remember which touchpoints they visited that lead them into your dealership. However, even asking them will typically give you more insight as to what was their primary influence. 

I’d bet that your customer’s journey looked something like this: They passed your billboard every day on their way to work. While scrolling through Facebook, they saw your targeted ads. Perhaps a neighbor brought home a new car, and they saw your license plate frame or sticker on the back. Watching TV late at night, they viewed one of your TV ads.  They conducted some online research about a specific vehicle and viewed one of your listings. They visited your website and browsed your inventory, then left to read some online reviews about your dealership. Maybe they even posted on Facebook; asking friends, family and associates for advice on the vehicle they’ve chosen and any opinions about your dealership. They decided to give you a shot and made plans to come to your store that weekend. And then they show up. Where do you attribute the sale? Which marketing channel gets credit?

The reality is that all of your marketing channels are working together to drive business to your dealership. So, consider digging a little deeper when analyzing attribution and judging any particular service’s performance.  Save yourself from making a mistake that could do more harm than good and drive in more sales and profitability into the bargain.

The Most Important Attribution KPIs For Auto Dealers

With every year that passes, we’ve seen consumers increase their research and online activity exponentially and it has become increasingly difficult to discover true attribution when analyzing exactly what drove a specific customer into a dealership.

Marketing today mandates an omni-channel approach. No longer can you simply rely on a website and traditional media. An effective marketing strategy should include such tools as a comprehensive SEO and social media strategy, pay per click ad campaign, presences on third party listing sites, display ads and email marketing, to name just a few.

Because consumers are visiting so many sites in their car-buying journey, I think it would be fair to say that attributing a customer’s visit or transaction to a single source would be misleading. A customer could easily bounce from a manufacturer’s page, to vehicle review sites, to a third party listing site, then go to a dealer’s website, and then perhaps leave there to read reviews on yet another site. Therefore, attributing a conversion to a single page, source or form could lead to erroneous information and budgetary decisions based on that incorrect data – this could then lead to campaigns that are not as effective as they should be.

Some of the most common automotive KPIs currently used include Click Thru Rates; Conversion Percent, Site Visits; VDP views; Dealership address and directions; pricing; and engagement rates on any social media pages. I realize that some dealers may not have the time or resources to track the customer’s entire journey. If this is the case, at least pay attention to the two KPIs that give you real and actionable data:

1.    Lead to Show Ratio

2. Show to Close Ratio

While these KPIs won’t map out the customer’s journey, what they will do is help you to determine what marketing efforts are producing a return on your investment – and which are not.

A typical beginning of the month has management analyzing marketing sources and measuring their effectiveness by close ratio – i.e.:  We spent this much money and sold this many cars for this much profit. While this typical action may help determine if your marketing is producing revenue, it won’t help to determine whether it could be producing MORE revenue.

If you received 100 leads from prospects touched by all of your marketing and sold 10 cars, you would find that you have a 10 percent closing ratio. Whether this number is good depends on the market density.

But what does it really tell you? And what happens when you add your show ratio into that equation? By taking that same number of leads and discovering how many of those leads actually came in, you can determine whether your marketing is effective – i.e.: did it do its most fundamental job – did it drive traffic into your store?

You can then use that number to discover the show to close ratio. The first answer (lead-to-show) shows marketing effectiveness. While the second illustrates organizational effectiveness. You may be getting a high volume of customers into your dealership but fail to close them once they are there. OR, there could be a process issue in how leads are being handled.

Take the time to add these KPIs when calculating your lead providers and you’ll be better able to judge their performance and make better budgetary decisions. 

Is the Internet An Enemy To Car Dealerships?

A 2014 study by Autotrader showed that consumers are visiting fewer dealers in their car shopping than ever before. This is certainly a by-product of the availability of information. No longer do consumers have to visit multiple dealerships to find the right vehicle. They simply sit in front of their computers and browse a dealer’s inventory on their website or, more commonly, a car buying portal site. In fact, the same Autotrader study showed that 79 percent of consumers are using the Internet in their car-buying process.

When the consumer has completed their research, decided upon a vehicle and visited a dealership to view and/or test drive it, many don’t actually end up buying the vehicle they came in to look at. They end up finding something more suitable to their lifestyle, or one that is a better fit for their budget.  

They arrive at the dealership, armed with all their Internet research -- ready to do battle should they experience anything less than a frictionless experience. However, many find themselves in a situation whereby they are perhaps not quite as ready for battle. Perhaps they now feel they will be at a disadvantage at the negotiating table.

So what does THIS consumer do now?  

They whip out the one thing most consumers never leave home without -- their smartphone, right in the dealership’s showroom, and start shopping the competition. A 2014 survey by J.D. Power and Associates revealed that 34 percent of new-car buyers who research online use a smartphone or tablet while shopping at a dealership, up from 29 percent in 2013. Vehicle pricing is the most frequently accessed content while at a dealership (61 percent), followed by model information (42 percent), searching inventory (40 percent) and special offers/incentives (36 percent). 

If consumers are so armed to the teeth with information, why do 61 percent access information on vehicle pricing while at a dealership? Most likely because they changed their minds while viewing the vehicle and landed on a car other than the one they came to look at. This use of smartphones by dealership customers to research the inventory of other competing dealerships may well lead to an increase in dealership visits.

You can’t buy a car from the Internet – not yet, at least – so it might be wise to consider that the buyer that walks through their door with the MOST information is the one that you should ensure gets the BEST customer experience. As they, according to the J.D. Power study, are the ones likely to visit more dealers.

When consumers are shopping for a vehicle, they may think they know what car they want to buy. However, studies show that they can easily change their minds while at your dealership. And, if they are shopping your competitor’s inventory right from your lot, they may also change their minds about if they want to buy a car from YOU.  Give your customers a good reason to buy from you versus any competition, and perhaps you’ll find less resistance, happier customers and more sales.  

In the end, the Internet is not a dealership’s enemy.  It provides us all with much needed information and services that can be much harder to find elsewhere. Consumers will use it whether you want them to or not. Embrace technology and find a way to use it to your advantage. If you still don’t agree, just remember the old saying:

 Keep your friends close and your enemies closer.