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Nearly every day that I meet with dealers, I’m going over statistics. The metric that dealers are most interested in are always the same: leads, leads, leads. I constantly field questions like: “Why are my email leads down this month?” “Great, my phone leads are up!” “ Why are my hours and directions visits… wait, what are those again?” Sounds familiar, doesn’t it?
The truth is, this fixation on leads is short-sighted. According to a 2011 study done by AutoTrader.com and Polk* 69% of consumers don’t fill out a lead form before they walk through your front door. Why is that so important? Because it means 69% of consumers weren’t a “lead.” It means every time a GM wants to know how many “Floor UP’s” they had, what he’s really asking is how many people were on the dealer website today and didn’t contact us before they showed up in our showroom.
So if leads are not as important as you think, then what is this statistic that is so important? It’s one simple word: VISITS! Hold on, that’s it? Yup that’s it. Let me ask you a question; do you think a dealer who has 1,000 visitors a month to their website sells as many cars as a dealer who has 10,000? Every dealer spends money advertising his dealership, and now a day’s every print ad has it in big bold letters and every TV and Radio commercial ends with “or visit us at www.MYDEALERSHIPSWEBSITE.com”. So it seems like you are trying to get as many people as possible to go there anyway, aren’t you?
Let’s look at some math for a moment. I developed my own predictor model aka “Matt’s Magic Website Formula” to tell any dealer roughly how many new cars a month he sells just by asking how many visits he gets to his site, and I would really love to get some challenges with someone’s actual statistics! (Averages please) So let’s take two dealers. Dealer A gets 3,500 visits per month and Dealer B gets 7,000. Let’s assume the both websites convert at 15%, an average number. So this means Dealer A gets 525 opportunities and Dealer B gets 1,050. Let’s also assume both have an overall closing ratio of 7%, also an average number. That means Dealer A sells 36.75 new cars on average per month. Dealer B sells 73.5 new cars on average per month, exactly double. So here’s the secret sauce of my model-- simply take the first 2 numbers of your average visits per month and that’s how many new cars you sell. There is a range of course, probably a bell burve: 3500 visits equals 35-40 new cars, 7000 visits equals 70-75 new cars, 10,000 visits equals 100-110 new cars on average per month.
Of course, all visits are not created equal. Our Cobalt business intelligence shows that the top sales indicators are deeper actions committed by qualified visitors: inventory views, time spent on inventory views, and hours and directions page views. The real message is to stop focusing solely on leads and think about other digital factors that predict sales. Tune in next time for my piece “Measuring Success----Why Lead is a Four Letter Word.”