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When I was much younger I used to think I was a pretty fast runner until I saw what world-class speed was at a track meet. You may think you are doing a great job with your Internet Operation but without clear comparative metrics in place it’s difficult to really know. In an Internet Operation there are two areas where you want to measure metrics: The first is Performance Metrics (sometimes known as Process Metrics) and the second type is Financial Metrics. To really grow your operation you need to measure both.
Performance Metrics can be used to measure your lead sources, your website performance and even the performance of your Internet team members. Let’s review these 3 key metrics.
Lead source (3rd Party leads) performance can be measured as a performance metric and a financial metric. The performance variable has to do with the quality of the data available to your team for follow-up. If a lead source does a good job for your team they will try to provide as much information as possible to ensure a connection with the prospect. To improve the connection ratio it is important to have a good email address and at least one phone number that works. Many leads arrive with one or the other but if you expect great results work with a provider that strives to provide both. In addition, the information on the vehicle of interest and the customer (correct name) is essential. Many “lead harvesters” that troll the search engines for lead prospects have a low threshold for capturing prospect request information. Especially on the vehicle where they just ask for make and model and do not even allow the customer to submit more details. These lead harvesters are hurtful to the industry since they essentially capture prospects and push them toward a dealer before they are even ready. As a result it makes it difficult for an Internet salesperson to connect, appoint and then sell. Be very cautious in your selection of lead sources and measure their “data performance” so your team has the very best chance possible for success.
Website performance is more important now than ever. In order to generate the best 1st party leads for your dealership you need to have a high performing website and you need to measure the effectiveness everyday. I like the simplicity of the Dealer.com report that is available on a daily basis by email. The report shows total unique visitors and the number of forms submitted electronically. This data allows you to quickly determine your daily conversion rate (not including phone calls, chats or text messages) and therefore to know if your website is working for you. Further, the report shows which models were most clicked and even drills down to the most searched vehicles by stock number. This really helps you determine if what you are trying to promote is achieving your objective. I really like that the report shows which pages are most visited and which forms are most clicked. I regard the forms as your electronic sales team and when they “greet” your customer online your goal is to get the information for follow up. By comparing which forms greeted your shoppers and the ones they submit you can quickly determine if your website is set up to drive greater lead volume. If you are not receiving this report daily from your website builder I would strongly encourage you to ask them to develop it for you.
Internet Team Performance measurement is often overlooked at a basic level. We tend to measure the results quite well but if we would study the day in and day out activity levels we would really generate better results. You may want to sit with your team and establish performance standards for items like number of calls to be made per day, number of emails to send, quality of the emails, quality of the notes, etc. so they are part of the standards setting process. By involving your team in the process they are much more likely to reach their daily goals. Additionally, I encourage you to work with your team on establishing the benchmarks for the following: the percentage of leads you connect and interact with, the percentage that become kept appointments (goal of 25%) and the percentage that purchase when they visit the dealership (goal of 60%). These percentages will allow you to achieve a 15% close rate overall. Of course, the better the leads, the better the close rate.
When I first started training dealerships on their Internet Operations I was totally focused on performance metrics and did not emphasize financial metrics. As such, dealers and general managers were not as engaged at this level and sometimes they lost interest in the numbers. When we created a Monthly Internet Performance Summary that outlined the monthly gross profit from the Internet Operation while projecting the annual gross profit, they really zeroed in on the fact that the Internet was a true profit center. We review the financial metrics at the lead source level monthly as well as year to date so the dealer can determine not just the sales and close rate, but the total gross, gross average as well as cost per lead and cost per vehicle sold. This brings it all home and the bottom line measurement allows all the dealership employees to have great pride when they have a good month and to quickly determine what needs to improve if they have a slip.
My recommendation is to set up a comprehensive metrics foundation for performance and financial metrics so you can take your Internet Operation to the next level and really know when you reach it. If we can ever be of assistance please let us know. We will cover this information and much more during our NCM Internet Bootcamp August 13 & 14 and if you are interested in attending just let me know.
Best to you,