Internet Department Benchmarks

Bill Simmons
We have all heard the saying that we cannot manage what we cannot measure. It has been a management style for me for my 30+ years in the car business. I am learnig a whole new ballgame today with PPC, SEO, SEM, blogging etc. I am embracing all of the new technologies that are coming our way and trying to learn them all. I am probably trying to learn too much too fast, but hey, thats just my Type-A General Manager car guy personality doing what it does best. So, with all of that being said, what are the key areas that I should be measuring and are there any industry related, N.A.D.A. or 20 Group, benchmarks that I should be focusing on?
Gary May
First, great job. And that is not being said lightly or in jest. I can count the number of hands-on digital general managers I've been around for the past 3 years, let alone longer, on a hand or two. Your point of getting overwhelmed? Go for it, but to stick with the basics. First of all, the norms we typically hear about are very basic and not really discussed much. Therefore they're not adopted. The largest area of discussion we hear about is bounce and conversion. The benchmarks that will likely serve you well have to do with your area, competition, analytics, and insights. Because what happens in your PMA is unique. Use Alexa, Compete, Google Insights and Trends, SEOMOZ and more. The most important factors we spend time on are spend, conversion, response time and effectiveness and retention. Then site UI/UX, content/SEO, social media measurement and reputation management (if you're very effective, you can bring IRM up to the first section). 20 groups are great but I've truly not experienced or heard about one very versed in digital/web, let alone measurement. The greatest tool you likely have is your own benchmarks, road map and deltas over time. holding your staff to higher levels of accountability and doing the same with everyone you write a check to (vendor-wise). Go down a part where YOU set the pace and see you can follow. Best regards, Gary May IM@CS
Dennis Galbraith
Great question Bill!!! Gary's contribution is wonderful as usual. I'll try to add to it. The important metrics have dollar signs associated with them. What is the cost per positive action, or what is the return. If the metric does not have a dollar sign next to it, you've got to know what it contributes to that does and how they relate. The most important benchmark is your own break-even point. For example, it doesn't matter what marginal cost per VDP members of your twenty group are getting, if you can invest in ways to obtain more VDPs at a marginal cost below your break-even point, then do it. If going from 27 photos to 32 is more cost than it is worth -- again judging by your break-even point -- then don't do it. Group benchmarks give you an indication of you general performance, and that is helpful. There are usually a multitude of ways to improve toward the group benchmark, and break-even is an important way to make decisions about each of those individual improvements. Gary is absolutely right about differences between markets. Be careful about using group benchmarks to beat you team up without doing further analysis; however, the same goes for being too complacent when your numbers look good. The only thing that matters is how much you are making relative to what you could be making. Here are a few vital metrics for every dealer: * Cost per Vehicle Details Page (VDP) * Cost per Store Contact or Weighted Cost per Store Contact (not all contacts have equal value) * Cost per Sale * Cost per Day in Inventory * Cost to Market * Price to Market * Market Days Supply The last three are from Dale Pollak. (What a blessing he has been to the industry.) The first three are linked together. Cost per Sale is what you really want, but very hard to measure with any accuracy. The trick is to know where your greatest point of uncertainty is and look at break-even based on that metric. Cost per VDP only contributes to Cost per Sale through Cost per Store Contact, but you can know the number exactly for many things and it is often all you need to know for decision making. Price per Click is even further down the chain than Cost per VDP. Branding has it own set of measurements, like cost per thousand impressions. However, 1,000 online impressions does not equal 1,000 TV impressions. Branding is very hard to put an ROI on and can't be compared to measurements for traffic-now objectives. I don't think your question was aimed at branding, but beware when online vendors start talking about cost per impression. If they are not talking about filling a branding objective, then they are not talking straight. I hope this helps. I know it is very hard to perform all this analysis and still run day-to-day operations. I'll contribute more in upcoming articles and in my next book.
Shane Hambly
Good Afternoon, Benchmarks. I would assume you are looking for actual figures. That being said, here's a sample based upon 200 progressive, automotive dealerships located in Canada. Your results may vary, but I certainly feel that these are both achievable and realistic. Statistics are based upon the wholly owned dealership website asset and do not include leads from marketing partners. Benchmarks: For every 1000 unique visitors to the dealerships website expect: -2.5-4% conversion rate to a direct internet lead -Roughly 2.5 times that lead count in phone calls (5 times for premium brands) these should convert to a sales appointment 25% of the time -A minimum 7-11% closing rate (excellent dealerships can obtain 25%+) -Average time on site in the 3-5 minute range -Average website bounce rates, 30-40% (with good execution of retail focused best practices) -Average Inventory bounce rates, 22-27% (with good execution of retail focused best practices) Based upon the above noted statistics, on average, a dealerships site that generates 5000 unique visitors/mo should achieve the following results: 125-200 direct internet leads 312-1000 phone calls 78-250 phone up leads (25% of phone calls to lead ratio) 14-50 sales per month (7-11% close) I have not included spillover such as showroom traffic resulting from a web event, too much deviation in the average. It call comes down to solid execution of retail based best practices and good solid lead management. Good Luck.
Bill Simmons
Gary, Thanks for the feedback. And yes, it is a juggling act trying to learn all of this and run a store at the same time. I have setup a Google analytics account to monitor my website traffic. My dealership is a full service independant used car lot, with a service & parts department, and onsight body shop. We are the offsite used car center for our Toyota dealership that is about 5 miles away. I have my own website for just my location. I am currently taking a class on SEO and learning some great things in that class. I have always used numbers to hold my department managers accountable, but in this case I am not sure which numbers I should be using. For now it seems to me that I need to tighten up all of my processes for followup and lead handling, and the numbers should take care of themselves.
Bill Simmons
Dennis, thank you for the feedback. Yes, I enjoy reading Dale Pollak's books and online articles. It is going to be interesting to see what kind of articles he will be sharing now that he has access to years of Autotrader data. I agree that the important numbers have a dollar sign attached to them. I am trying to learn the best way to track the dollars spent for websites and calulate the return. For example, I was ready to kick Autotrader to the curb recently because their backend tool did not show me that I was getting a good number of email and telephone leads from their website. I changed my mind when their rep showed me the report that detailed a very large number of the people who viewed my inventory on their website, actually clicked through and viewed the vehicle on my website. But how do I know once they got to my site, where did they go and what actions did they take? That is the part that I have not figured out how to track yet.

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