I touched briefly on sourcing your internet leads the other day.  Now to the ROI on those sources.  A lot of dealers spend a lot of money on the internet for advertising and marketing of their vehicles.  You have to really evaluate all of your lead sources on a monthly basis to make sure that you are getting the most for your money spent. 

You have to really dig into analytics on the lead sources at the end of the month.  I know that it takes me about 2 days to get through all of my reports to get all of my ROI results for my providers so it can be time consuming.  I look at an internet sale as a lead that was generated from a third party source, your website, or a phone call that is trackable.  Trackable meaning you have a dedicated phone number from that source.  It is a phone-up, but if it is generated from a third party, I do view that as an internet sale.  DO NOT count floor traffic that comes in the door and says "I saw this car on the (fill in the blank), do you still have it?"  Even though there is room for argument, I don't count it.  Has to be a true internet lead or a phone call from those sources for it to count in my eyes.

Dig into your CRM.  Almost every dealership in the country has a CRM that will generate most of the reports for you.  You do have to take those figures and plug them into a spreadsheet.  Calculate your leads and sales from those leads and you obviously have your closing percentage.  You then have to look at your profit.  I run two reports; one with front and back-end profit and one without the back-end.  You then want to plug in the cost of all of your sources.  Take your total cost and divide the cost by the total amount of leads and will give you your cost per referral.  The benchmark should be under $50.  You then want to look at the cost per vehicle sale.  Take your total cost of your sources and divide that by your total sales.  The benchmark of cost per vehicle sale should be less than $250.

Your spreadsheet should look something like this:

Online advertising in the car business can be a tough at times to track.  We hear the numbers from all of the vendors in how many people search and research on the internet before coming into a dealership.  Some will submit for more info, some will call, and some will just show up in your showroom.  There are some pretty stout numbers out there from Northwood University.  So how true are they?

We had a sourcing done by Autotrader and confirmed a lot of info that we kind of knew, but learned a lot in the process too.  We learned that 75% of OUR used car customers were on the internet doing research before they set foot in our door.  Of that 75%, 61% were what a lot of salesmen would say is 'drive-by' traffic.  Only 29% made contact with us before making the trip into the dealership.  This coincides with the Northwood University studies that have been done over the last few years.  They were using websites that we have not advertised on before and had no idea that they relied on that information that much.  With that in mind, we are now advertising there.  Still a little early to see the results.

On the new side of things, 73% of OUR buyers used the internet.  This may be a little low as we are a single point dealership and we rely heavily on repeat and referral business which was confirmed in our study (35% were a referral from a friend/family member).  69% of those people were just 'walk-in' traffic and didn't make any contact with us through email or phone.

This goes to show that even though some of the online advertisers may be a little pricy, it validated where we were putting our advertising dollars online.  We are now advertising on the top 6 of the 7 websites.  The one doesn't allow for advertising as of yet to my knowledge.  People are looking at you online and you have to look good.

You have to have good photos, good descriptions, and competitive pricing.  You almost have to have a pricing tool of some sort like vAuto, VIN Solutions, or something equivalent.  When you have that combination, you will succeed.  Just about every customer is an 'internet customer.'  So is your dealership an internet dealership?  All of the staff has to be prepared to handle the internet shopper because if they didn't submit for info or call in, 6 or 7 out of 10 did do their research online on the car, and the dealership.

The other day, I popped into my google analytics for the first time a while. Our website provider has great analytics in their back-end tool so I don't go there much, but I wanted to see what our mobile site traffic was looking like. I was shocked to see how many visits we have had in the last 30 days. It got me thinking and wondering how many dealers in my area had a mobile site, and if they did, how user friendly it was. So I popped my blackberry out and started surfing.

I found that 5 of my local competitors didn't have a mobile site. I had to do the pinch to expand their sites so I could see their sites. Navigating was difficult since I had to do some pinching on my screen to see where I was clicking. I then thought of it from a consumer's point of view. I am on their lot and want to see some pictures of the car. If its too hard to navigate on your phone and takes time to load flash, I would get frustrated and just give up.

Here are some necessities that are needed on a mobile website. Easy access to inventory. Make it easy to find what they are looking for. Have specials on there. Some dealers will get a live framed in link of specials from the manufacturer those won't show up. You have to put your own on for it to be visible. Click for directions is important, especially if people are just doing google searches from their phone. Make all your contact information easy to find. The easier to navigate, the better the customer experience is, the better the customer satisfaction level is.

Advertising in the automotive business is a tough thing to track, especially when it comes to direct mail, TV, newspaper, and radio.  More and more dealerships are starting to pull more and more away from the ‘traditional advertising’ and putting it where you can track it more effectively and that is the internet.  How many times does a customer walk in the showroom and the salesperson marks them in the CRM that they are a ‘drive-by’?  

Almost  80% of the buyers that walk in the showroom did research online, but did not establish contact before coming in to look at the vehicle.  67% of those buyers went to the dealer’s website to get information on the vehicle.  This is a reinforcement that you have to have quality photos, good descriptions, and be competitively priced, or they will never show up at your front door.  Of the 80%, 64% were ‘walk-ins’, 27% picked up the phone, and 9% emailed into the dealership.  This shows me that almost every person that walks in the showroom is an internet customer. 

Since so many consumers are hitting your dealership’s website, how does it look?  Is it user friendly?  Is your website easy to navigate?  Does it encourage them to engage with you (i.e. chat, a coupon pop-up, etc)?  Is your website mobile phone friendly?  You want your website to convert that consumer to make a call or send in information on a vehicle or special.  That percentage should be in the 3-5% range of your total unique visitors.  I have been leary of chat, but have become a proponent of it in the last couple of months after putting it on our website. 

Things to concentrate on for 2011 is to make sure that your website are all of those things above.  Also, work on SEO to direct traffic to your site.  Buy urls that will enhance your visibility on the internet.  Buy for example buy a url that has a model and your city.  Build that landing page and direct them back to your main website.  Not only focus on sales, but look at your fixed operations.  Look at buying your city oil change dot com.  I did this and it was the top of google searches within 3 weeks.  We are generating phone calls and click throughs to our website.  Click throughs and engagement with the customer is the key.  Make it happen in 2011!

Craigslist has been around since 1996 with approximately 49 million unique page views.  The question is do you advertise there and what do you advertise? 

I have been dabbling with Craigslist for a couple of months with our used car inventory.  At one point, I was putting all 150 vehicles on there.  I was finding through analytics that the higher priced vehicles weren’t getting much action, but I had found a sweet spot with vehicles that are under $10,000.  If I have something that is a little higher up to $11,000, I may post it depending on what it is. 

You have to post effectively and be consistent with it.  I post every Thursday or Friday with about 30 vehicles.  I see my website traffic go up significantly when I post.  People are looking for that $10,000 vehicle that is a cherry.  We have a tool within our website provider that will generate code for us and all I have to do is cut and copy to the appropriate fields.  Click here to see an example of a Craigslist ad that we have. 

When you click on the vehicle presentation, it takes you to our dealership website.  Just by posting about 30 vehicles a week generated 348 unique visitors and 2312 page views in January.  We had some customers walking in with print outs of the ads.  We had 16 phone calls, and we had 12 email inquiries.  I know that I can account for 18 sales that we know of that they saw the vehicle on Craigslist in January.  Of those sales, that generated $42,966 of gross profit for the store.  Not a bad return on investment since all it cost was time. 

The question is are you posting there and how are you doing it?  Are you linking back to your dealership website?  Are you posting with pictures?  Do you have a tracking number within the ad so you can track the effectiveness?  Are you willing to step outside the box and post with personal ads, ads for ‘junk items’?  Maybe you will think it is a better idea to post there with that other stuff that is on there and dominate your market.  Good luck with your postings.

What makes you stand out from the rest in the automotive business?  About every dealership has a CRM that they are using that generates all of the letters for you.  Yes, it is nice to have all of those form letters and emails generated for you, but how personable is it?

I was watching CBS news last night and they had a segment on hand written thank you notes.  Yes, I said hand written.  With the internet age and emails, people are getting away from hand written notes.  They did an ‘experiment’ and sent out some thank you notes.  The people on the receiving end were very appreciative.  There was one gal that worked at a Starbucks and received a simple note of her just remembering John’s name.  There was another gentleman that received the note, and made notice that he had written it on someone else’s stationary.  He said ‘well, thanks anyway and hope you have a great day.’

How does this relate to car sales?  Well, with CRM’s, for the most part, we all have gotten away from a simple hand written note.  If you do write a note, make it personable and make yourself stand out from the other 3-5 salespeople that they will be talking to in making their purchasing decision.  It will make you stand out as chances are, the others won’t be doing it.  Do it right after they leave the dealership on their first information gathering visit.  Hopefully they will receive it the next day or two and will appreciate it and you taking the time to hand write a note to them.  Yes, they may get a standard email from you that is automatically generated along with the others, but your note will make you a step above all of the others and increase your chance in the sale of their next vehicle.  If you don’t get the sale, congratulate them on the purchase of their vehicle and keep on following up on them like you sold them the vehicle.  They will definitely remember you in that and may send business your way and may purchase their next vehicle from you.