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KPI

4 Absolutes of an Automotive Game Changer

By David Metter

I have great news. You don’t have to be a genius to change the game, and you don’t have to be a World Series winning champion either. But you do have to be willing to disrupt and question the current rules, players, and equipment used in the game. You also have to be capable of placing YOUR right players in your lineup. If you possess the mentality that there is always a better, more efficient method of accomplishing a goal, or executing a play, then you have it in your DNA to be a game changer. Most of the time, it’s simply about combining the highest-ranked players with a little common sense.

The following absolutes are not only a set of guidelines to winning a baseball game, but they also dictate the attributes of a game-winning team across all leagues of automotive marketing.

1.    Have the Proper Equipment. It’s impossible to get a home run without a bat, and it’s pretty difficult to catch a fly ball without a glove that properly fits. It doesn’t mean the talent isn’t there, it just means it’s not being correctly applied. If dealers are the players of the automotive business, then vendors are their equipment. Vendors facilitate home runs and grand slam opportunities in the same fashion that bats, helmets, cleats, and protective gear assist players in capitalizing on their true strengths. It is the equipment, or rather the vendors, that provide the freedom for players to do what they do best – play the game. Or in our case, sell cars.

In addition, just as one baseball glove does not fit all who play baseball, one all-inclusive marketing strategy does not fit all dealership business models. Now more than ever, our playing field is being infiltrated with vendors aggregating solutions into a single, “all-powerful” marketing suite that consolidates all needs into one – everything from search, to social, to email marketing and in-store conversion tools. In theory, this may sound like a good idea. However, I advise you to be cautious of anyone who claims to be a “Jack of All Trades,” as they cannot possibly be as competent in the results they deliver when compared to a company that specializes, and dominates, in one specific area.

IBM’s recent whitepaper recognizes the advantages that accompany integrating the unique mix of solutions that support your individual needs as opposed to a “one size fits all” marketing suite. “In 2016, look for new ways to leverage your technology mix to give you greater agility to innovate and more strongly engage your customers.”

2.    Put Your Players in the Right Positions. Know the distinct strengths of every player on your team. Just as you wouldn’t put a first baseman in to pitch to a batter, you should very carefully consider putting a vendor that began in one segment and now offers “everything” in a position to manage your full marketing needs. Automotive is not a one size fits all business. The same dealers, dealer groups, and manufacturers that have changed the game are the ones that have taken the time to sit down and evaluate new, revolutionary technologies. Why? Because their impacts can be revolutionary on your most critical KPIs.

When considering which vendors to add to your roster, remember to choose ones that complement each other. For instance, if your goal is to increase your website conversion, you first need to secure a method of getting enough traffic to your site. Likewise, when drafting a winning team, the coach is tasked with the finding the right blend of strengths and talents, and placing each player in the right position. When you think about it, that’s really the only way to win at anything – finding that ideal combination of tools that cover all your bases with the player that’s made for the job.

3.    Don’t Throw the Same Pitch Every Time. In order to win the game, there has to be an element of surprise. That’s your curveball. In marketing, there is traditional, predictable thinking, and then there is the kind of thinking that completely obliterates everything it means to be average. Game changers refuse to succumb to all that is ordinary. When you’re working within our current digital playing field, it’s important to acknowledge the dense fog of information attempting to cloud your vision at all times. But never take your eye off the ball, as this is the fundamental secret weapon needed to break through the clutter.

Thinking outside the conventional marketing platform is the clutch, or the fastball, that will ultimately defend your dealership from falling into the dreaded “average” category - which also fails to identify why people should buy from you. Average is not compelling nor is it magnetic. Average online experiences don’t drive buyers to your showroom – and more importantly, all-in-one marketing suites fail to offer memorable experiences for your customers. Who wants to be average in an industry synonymous with competition?

4.    Know the Score. How can you possibly win at anything when you don’t know the score? In order to overtake the competition, you have to know where you stand in comparison. Don’t get me wrong, you don’t have to be a statistician or analytics expert, nor do you have to know every player’s batting average, but you do need to know what you’re up against and above all, what sets you apart.

To win the game, you have to be ready and willing to change the game. True leaders combine unbelievable technology with a common sense approach. Sometimes all it takes is asking the right questions, which then evolve into ideas, and ultimately solutions that change and improve our operations. Top-of-the-line equipment will never fail to safeguard a competitive edge, but what really sets game changers apart is that they know how to appropriately allocate their assets. They choose to work with vendors that make it possible to transform a single idea into a better-suited reality.  

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.