1,000 dealers share their thoughts about chat, text and messaging in general...and how these communications pay off. SEE HOW
As the end of the year approaches, it’s a good time to take stock of how successful your dealership’s Internet marketing plan is and how you want to attack the market in 2012. So what should you be looking for when evaluating your Internet success?
When it comes to Internet leads, it’s important to map out several key metrics over a 90-day, six-month and one-year term. That way, you’ll be able to see if any recent trends have developed that may affect your 2012 plan. Looking at all of your providers through the same lens, if you will, will quickly highlight those who stand out from the rest – for better or worse – and what you may need to do to generate more sales.
Start with Total Billable Leads Received: Track the number of leads from all Internet lead sources, including your web site, OEM, and Independent providers. Be sure the total is adjusted for any duplicate or returned leads.
Contact Made: No matter how thorough your process, there are some customers who just won’t respond to your calls and emails. That said, if your percentage is below 65%, it’s a good idea to take a look at the response time for personalized responses (not auto-responders). Is it less than thirty minutes? Do the responses invite a response from the customer? If one lead provider stands out with a lower contact rate, first ask if your salespeople have a bias towards leads from that provider. “Cherry picking” Internet leads actually leads to lower contact percentages, not higher.
Appointments Set: If the appointment set percentage is lower than 20% of total leads, evaluate the process. Are your Internet Sales Managers (ISMs) trained to answer the customers’ questions and ask key questions in return, including asking for the appointment? Is your pricing competitive with the market? It’s good to shop your competition from time to time to evaluate your pricing.
Total Visits: Including appointment shows and walk-in visits from Internet customers, the minimum visit rate that dealerships should expect from Internet leads is 15%, but some dealerships easily and consistently double that rate every month. Do you offer compelling reasons and incentives to come in? Are your managers’ confirming appointments the day before?
Total Sales: A reasonable expectation for show to close percentage is at least 50%. Dig into this – if you find a salesperson closes 90% of his or her visits, they’re probably not logging every visit and you’re missing opportunities.
Cost Per Sale (CPS): Many Internet sales departments focus on the close rate and don’t go beyond that. But while one lead source may provide a high closing rate, it may also result in a much higher CPS (for example, leads from an SEM campaign). The higher the CPS, the less profit the dealership is making.
To calculate CPS for any campaign: Take the total amount spent on the campaign (e.g. $2,500 per month) and divide it by the number of cars sold (e.g. ten = $250 CPS). You can even go one step further and deduct the CPS from the average profit per deal for that campaign/source – sometimes, a $300 CPS can “cost” more than a $400 CPS.
While it’s not all-encompassing, this process should help you identify the best sources to maximize your dealership’s profitability in 2012. And it may even identify where you can grab a few extra sales even before the New Year. If you’re looking for more ideas of how to optimize your Internet operations, download the incredibly helpful Kain Automotive free “2011 Automotive Internet study” from their web site.