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From: Jared Hamilton
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Dennis Galbraith

Dennis Galbraith Chief Marketing Officer

Exclusive Blog Posts

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BDC training for 2017

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Research Accountability

     One reason I left the automotive internet research business in 2006 was the proliferation of online research by amateurs loaded with newfound data. Data has never been cheaper or more abundant, but turning data into useful information still requires care. Most industry publications are understaffed and are not in a position to weed out the garbage from the actual research findings dealers need to hear. The consequence is that even the most ridiculous hypothesis is supported by someone's tortured data.

     Research based conclusions regarding retail marketing bounce back and forth like diet information. Just as consumers are baffled about whether things like chocolate, wine, and eggs are healthy in moderation or always to be avoided, dealers are left with lots of claims carrying little credibility.

     It's hard to separate the facts from the fads. What percentage of shoppers really wants to negotiate price? Does this differ by market, buy vehicle segment, or by demographics? Do women prefer fixed pricing more than men do?  Do they value warranties more? These are important questions that have been publicly trampled with conclusions backed by very questionable data and analysis.

     Vendors have taken such a careless approach with data that the act of publishing non-sense has spilled over into some dealer conversations. Closing rate, or any other ratio, doesn't mean a thing unless both the numerator and denominator mean what you think they do. Averages don't accurately describe one-tailed distributions. Large sample sizes don't make up for sampling bias.

     Regardless of intentions, some of what dealers are being fed is flat-out misinformation. Dealers need to be careful about how much weight they give to information from vendors who are not in the business of providing sound information. Vendors seeking credibility for their findings should provide greater transparency into their research methodology.

Bart Wilson
When I was working in a dealership we would cite performance statistics on appointment set, trades taken in, first time closing percentages, etc. But I don't know if anyone could tell us where we came up with those numbers. Trainers? Vendors? Who knows. The point is we were measuring our performance against some arbitrary numbers that may or may not be accurate.
Gary Sanders
@Dennis, if I may add to this, another example is VDP (vehicle detail page), SRP (search results page), Clicks, Printed Ads and Map Views. I have found reports vary based on inventory levels and the makes you happen to have in stock. If you do not have a given make in stock at any given time, then a vendor may say your search results are down. But when your inventory is across the board with many makes, then it goes with out saying your inventory is going to come up in more searches. In my opinion, having a structured online marketing process is more important. This includes getting inventory live, great photos and comments and also getting your cars offline when they are sold.
Dennis Galbraith
@Gary, you are so right about SRPs and VDPs. Your inventory mix will have a big impact on that statistic. If you compare results across sites for VDPs during the same month you are fine but SRPs are not quite the same across sites. If you compare one period to another, both statistics can be altered by a significant shift in inventory. That said, this doesn't mean we should throw the numbers out and walk blind. But we do need to understand what the numbers mean. All things being equal, the process recommendations you rightly recommend should move the numbers. Taking a picture at the auction and getting your inventory up while the vehicle is still in the pipeline will increase SRPs. However, if you sold your last Camry, Accord, F-150, and Silverado, then don't expect this month's apples to be comparable to last month's oranges. I've read many comments suggesting that great photos, videos, and vehicle descriptions will dramatically increase VDPs. The impact to VDPs is minimal. However, they will increase the number of contacts per VDP, which is measured differently depending on whether or not you have separate tracking phone numbers for new and used and whether or not you have chat. I hope I didn't give the wrong impression about using metrics. They need to be used more than they are, but the need to be understood much more than they are. That clarity is not going to come in a sea of misinformation. I'm certainly not telling vendors to shut up. I'm telling them to shut up until they know what they are talking about. My message to dealers is to be careful and insist on full disclosure from vendors.
Gary May
Another great, insightful post Dennis. More and more we come across data that is tilted to make it appear that a vendor or service is providing the best numbers or value. And that's not only disappointing (as well as easily done)...it's also sad. Whenever I see posts about data, analytics and more around the auto industry, it's always best to remember that the best data from the back end of the dealership is not valuable until to match it to the data on the front end: customer data. And not from studies. From YOUR customers.

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