KainAutomotive.com
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
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.
Financial Metrics
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,
David Kain
President
KainAutomotive.com
david@kainautomotive.com
www.kainautomotive.com
859-533-2626 cell
KainAutomotive.com
I am really impressed with how this gentleman nailed it.
David Kain Subject: My letter to the President - from a Chrysler dealer in Brandenburg KY
To: The President of the United States of America
May 16th, 2009
From: Larry Green (Concerned Citizen)
Mr. President,
I am writing you today as it is my right to share my opinion and thoughts with you, the leader of our country. The developments in the past weeks have been quite puzzling to me. Seeing you announce on public television that Chrysler LLC would file for bankruptcy is something I never thought I would ever see our president do. To further complicate all that has been happening with the automotive industry I was in total shock to see who you had appointed to oversee the restructuring process and the lack of experience they have with automotive retail sales and manufacturing.
If you want to learn how to raise livestock then the obvious place to start is seeking knowledge from a farmer. So why is there such a lack of experience in your appointee’s when it comes to automotive manufacturing and sales. I believe that when decisions of this magnitude are made that will have such an impact on the everyday American, we need people with proven track records advising you. Some places to find these successful people might be, The National Automobile Dealers Association, National Dealer Councils, previous CEO’s in the automotive industry, and the list goes on and on.
Now, Mr. President, I know you will probably never see this letter as your staff will intervene. But I am taking you for your word during your campaign, where you said on several occasions that you will represent we, the people! But I feel I need to send this to you with the little hope that you may indeed receive my letter.
I live in a small rural community in Brandenburg Kentucky. We received a notice letter from Chrysler yesterday stating that we are not part of their future plans. My concern is not about me, but rather the impact that the local community as well as hundreds of others across the country will feel from this outrageous, government sanctioned, protection of large corporations and unions at the expense of everyday people who elect government leaders. These leaders are elected because of their platform, ideals, abilities and concern for the American people in general. In the case of the automobile restructuring the average American has definitely taken a back seat.
What I want you to know Mr. President, is that in most cases the local automobile dealers are the community backbone in rural areas. I will share with you just a few things that we do here in Brandenburg; We provide numerous scholarships to graduating seniors every year. We are one of the largest employers in the community. We support numerous sport’s activities from little league all the way through high school. We are the number one contributor to the local Future Farmers of America. We have sent over 2000 large packages to our deployed soldiers in war zones. We assist the local Army Recruiting Command with a tutoring program that has enabled several young men and woman to enter into the military. We donate to the senior citizens in the community to give them a better quality of life. We provide assistance to local law enforcement and emergency service providers on a regular basis. We donate time, resources and money to numerous non profit organizations such as, American Red Cross, Relay for Life, American Cancer Society, Veterans Organizations, USA Cares, Association of the United States Army, Breast Cancer Awareness, Boy Scouts of America, Food Closets, Shelters, Parks and Recreation, Angle Tree, food and shelter for less fortunate people, and this list goes on and on, Mr. President.
We are also a major contributor in political contributions and are involved heavily with the democratic party. We are not unlike the typical rural dealer as I am sure you have not been briefed on what a typical dealer adds to a typical community. Mr. President, please do not allow these drastic cuts to occur until you know how they will impact on local communities.
In our dealership we have been profitable and have never, ever been a liability to Chrysler LLC. The areas they said they were going to measure, we exceeded in every category. So the question remains, why? We feel that all they did was cut numbers as they were told to do by your people. They quite simply looked at a map and tried to space their dealers 50 miles apart. The funny thing is Chrysler/Fiat thinks customers will drive the additional distance to buy their products. I hate to tell you that this is not factual at all. Most rural dealers have loyal customers to their dealership and not the brand. In fact, we have been covered up by phone calls each and every minute since the news was published because our customers want to trade in their Chrysler products and buy Ford or Mercury. Why, because we are also a Ford-Mercury dealer and our customer base is loyal to us not the brand. That is why you need to have representation of dealers also involved in this restructuring process.
Your appointee’s are under the impression that rural dealers are a liability to Chrysler LLC. This is totally false, Mr. President and we are an example of that. We have always paid for everything that is sent to us, tools, brochures, supplies, training etc. We own our facility, we pay our employee’s, own our computer equipment and all other materials. In fact if you want the truth, we are an asset to Chrysler LLC and have made them millions of dollars in the 26 years we have been a Chrysler Dealer. I feel that our constitutional rights have been violated. Under section 8 (Powers of Congress) paragraph 4, states “to establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States”. Mr. President, there is nothing uniform in how these proceedings are being carried out.
Under Amendment 5 (Trial and Punishment, Compensation for Takings. Ratified 12/15/1791.) last paragraph, “nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without compensation.” Cleaning out a dealerships CMA account of money that the dealer put in there (not Chrysler), is no way close to being anything short of a felony offense by Chrysler LLC, who did this just hours prior to filing for Bankruptcy. To this day we have received no compensation whatsoever. Mr. President, this is the company that our tax payers money bailed out for a short period of time. Wow what a payback.
Amendment 7 (Trial by Jury in Civil Cases Ratified 12/15/1791.) “In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and in no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of common law.” It’s obvious that common law is in no way part of the present conduct of our legal process with this case.
Amendment 8 (Cruel and Unusual Punishment. Ratified 12/15/1791.) “ Excessive bail shall not be required, nor excessive fines be imposed, nor cruel or unusual punishments inflicted”. How much crueler can the system be than they have been to average American people who happen to own profitable dealerships?
Amendment 11 (Judicial Limits. Ratified 2/7/1795) “The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by citizens of another State, or by Citizens or Subjects of any Foreign State.” Mr. President, we are well aware of who is calling the shots in how this process is unfolding and that is by Fiat, a Foreign company. It seems that our countries laws and processes are being interpreted to take care of non US Citizens rather than very productive members of our society who are US Citizens, the car dealers.
I will close this letter by asking you, respectfully, to consider those little league kids who might not be able to play ball next year. The senior citizens around our country who may not have electric or hot meals next winter. Those children in low income households who may not have Christmas next year. The Boy Scout who might miss out on going to summer camp. The lives that may have been saved through the Red Cross, Cancer Society and Breast Awareness. The Veterans programs that might be affected. And so much more! I don’t know about you, but this really bothers me. I urge you, Mr. President to please do the right thing and take care of our own!
Sincerely,
Larry D. Green (270) 422-4901
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KainAutomotive.com
If you have not been tightening your budget belt already, I am certain you are planning to do so in the near future. We often hear about cutting budgets so deep we hurt business growth so I wanted to spend some time offering an opinion on things you can’t do without when it comes to your online marketing.
A lead handling process
There is no use in spending the money to drive prospects to your business if your team does not have a lead handling process in place to convert them to appointments and then sales. This simplest of tasks is typically the one most overlooked and yet a solid process ensures that the money spent on leads provides the return on investment your dealership requires to thrive. A process is the Science of deciding what action (email, phone, text, postal mail, etc) and at what time/day/frequency you will complete it. The Art of the process is what you say in an email or phone conversation and how you use links, graphics, video, etc.
An “effective” Lead Management or CRM (Customer Relationship Management) Tool
Imagine if we were still working with dial-up in our businesses for Internet connectivity. Depending on web traffic there were moments in a dial-up environment when it would take minutes instead of seconds for pages to load. This led many progressive businesses to abandon committing large budgets to the Internet for communications and marketing until such a time that the speed could make things easier for their customers to shop online. Lucky for us that Broadband Internet speeds make this much less of an issue these days.
Your selection of a Lead Management/CRM tool is as important as your lead handling process and should compliment your employees in such as way that it makes them more productive. Be sure to get your team involved in the decision making process and you’ll find that they will embrace the ultimate selection. An “effective” tool becomes a non-issue and not only increases productivity; it improves morale, lowers costs and improves operating results. One caution – don’t overspend. There are excellent choices available without breaking your budget.
An engaging and productive website
There is not much mystery to this critical item. Your website is your online dealership and as such should allow your customers and prospects to experience your overall operation with little effort and even great enjoyment. Unlike employees your website can always be alert and engaging and when designed right can always anticipate your visitors needs. You might want to consider reading a book about making your sight simple and productive – “Don’t Make Me Think” by Steve Krug. It’s convinced me that we overbuild sites and the more we do the less effective they become. Focus on the customer experience and look outside the automotive industry to the most productive shopping sites for your models.
Since I am talking about websites I want to mention a few productivity boosters that you should consider that are low cost and high return:
Search Engine Optimization
Interactive credit applications
Interactive service scheduling
Interactive trade appraisals
Live Chat, Click to Call and Text Messaging
Online Classified Advertising for Pre-Owned Inventory
Unlike physical dealership locations that limit your inventory display area – Online you can locate wherever you can afford to place your inventory. You absolutely must display your inventory anywhere and everywhere you can afford to do so. Start with the multiple free sites that are available to you and build your presence on Search engines with effective Search Engine Optimization on these sites as well as your own. The free sites love your inventory because it brings traffic and increases their value in the eyes of the consumers.
Once you have effective placement on the free sites consider expanding to the paid listing sites. Be sure to see if your manufacturer provides co-op funding for your Certified Pre-Owned vehicles to drive down the cost with these sites. In addition, whether you use the free or the paid services, be sure you attend to the 3 key elements – Quality photos, quality descriptions and on the market pricing. Signing the agreement for the service and writing the checks is the easy part! The difficult and most important part is ensuring your listings generate the response you need to generate an acceptable return on investment.
New Vehicle Leads from 3rd Parties
Some manufacturers generate leads for their dealers at a reduced rate and my advice is to take advantage of these options. If your manufacturer does not offer this option it is wise to go to the market and select a provider that gives you the best possible lead quality. Be sure to communicate with your source reps as to whether their lead quality is up to your standards. A good way to determine lead quality is with free lead scoring services that are now available in the market to help you gauge whether a prospect is Hot, Warm or Cold. This does two things for you – It helps you line out more efficient processes and it helps you determine if your lead sources are providing the quality leads you need to grow your business.
Certainly there are many more ideas that are worth considering not the least of which is effective Database Management. Keep in mind that in tight times you need the fundamentals to ensure a solid return on investment and once you get these working for you then you should consider other options.
If we can ever be of help with your Internet Operation please contact us anytime.
Best,
David Kain
President
KainAutomotive.com
david@kainautomotive.com
www.kainautomotive.com
866-546-3428
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KainAutomotive.com
Someone gave me some good advice once and I often have to reflect on it when times get tough – “if you focus your energy on positive actions you will stay so busy you won’t have time to worry about the negative”. Words won’t get you the results you need but I can assure you that a focus on the positive will allow you to accomplish great things even in the face of adversity.
Nearly everyday we read about someone who has done some extraordinary feat and wonder how he or she did it. When asked how they reached the pinnacle of achievement they recall the effort and focus it took to be the best and most of us express that we are not willing to work as hard - even if it means remarkable achievement.
What is remarkable achievement these days?
Remarkable achievement these days could be as simple as keeping the dealership’s doors open whereas others may suggest that it is expanding their market share and increasing profits. Many of you know dealers who are having record years in sales and profits despite all the adversity in the market and I have witnessed first hand many dealerships operating at this level. I will outline a few common traits I have seen in these dealerships and share them with you.
Common traits I witnessed in successful Internet Dealerships in 2008
Students of the Internet – the Internet marketplace we knew 10 years ago or even 10 months ago is decidedly different than the marketplace of today. We all realize the impact of Google on the marketplace today and yet in 1997 it was still in Beta at Stanford University and in 1999 Google had to explain to people that it was designed to “search” the Internet. Few of us go even a day without using Google at least once. What company are we using or considering using today that will have an equivalent impact on our business in 10 years? A trait I have witnessed at leading Internet dealerships is that they spend time each month studying new trends and technologies that may give them a leg up on their competition.
Shared responsibilities – starting with the dealer principal and general manager the dealership management team leads the charge and helps carry the load of operating a successful Internet Dealership. The sales managers make sure their inventory and specials are online and in good marketing order. The finance manager studies the online consumer and provides a financing environment that motivates consumers to submit information. The service, parts and body shop managers do the research on different successful websites and weaves in those elements to their own sites. Most progressive Internet Managers/Directors would welcome the extra support and I promise each manager will enjoy seeing the fruits of their labor when they achieve greater success.
Focus on the positives – although this may seem trite I can attest to the fact that it isn’t in practice. Without trying to sound preachy or spiritual I have been in dealerships where the overall focus is on the positive and not surprisingly they have exceptional results. Similarly, when I am in dealerships where the focus is on the negatives the team can never do anything well. It reminds me of the old Henry Ford saying “Whether you think you can or can’t - you’re right”.
Open Mindedness – when I talk with some dealers I am a bit in awe of how well they operate their dealerships and yet they are attentive and open minded about what we have to say about their Internet operations. On the other side of the coin is the dealer who is not open to any new ideas because they have “tried them all” and know what they are doing is the right way even though they are struggling. On our Online Idea Exchange, a free forum we provide for dealership employees, there are always new ideas being introduced and critiqued by dealership employees. I learn something new everyday and it has served me well to model these open minded dealers who have experiences unique to my own. You should try it.
Certainly there are other traits that are part of the make up of these successful dealers who do well even in trying times. These are the ones that hit home with me I encourage you to consider them for yourself.
Hope you have a great sales month! If you have any questions or if I can ever be of assistance to you please feel free to contact me anytime.
Best,
David Kain
President
KainAutomotive.com
david@kainautomotive.com
www.kainautomotive.com
866-546-3428
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