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Jared Hamilton
From: Jared Hamilton
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The Most Abused Statistic in Automotive Internet Marketing

There are a ton of numbers in the various analytics programs out there. Many are worthless. Others are even misleading. The concept of analytics is to help us to analyze the performance of our websites. Unfortunately, they often do little in the way of analysis and more in the way of promotion.

It's for this reason that I'm a big, huge fan of Google Analytics. It's far from perfect, but it has certain qualities that make it worthy of attention:

  • Third Party Trust - If your web provider is supplying the analytics, it is pretty much guaranteed that the numbers are not accurate. Skeptical? Install Google Analytics (or any other trusted third party source) and compare. I've never seen numbers on any home-grown analytics program that do not inflate or otherwise improve the perceived performance of a website.
  • Portability - If you're like most dealers, you change your website provider from time to time. It's natural. The challenge that faces many is that the home grown analytics aren't portable to another system. Keep accurate, ongoing records by getting portable analytics installed immediately, just in case you do move to another website solution in the future.
  • Power - It surprises just about anyone who dives into Google Analytics that the platform can be so powerful. By "diving in" I mean actually going through the free training that Google offers. You can do things with the platform that you probably would never have dreamed of otherwise.
  • Easy Analysis - One thing that Google Analytics has is an abundance of people who understand it. At your dealership today, if you sent an email asking your staff if anyone is very familiar with Google Analytics, you will be surprised at how many experts there are. Whether they've applied this knowledge at other businesses or if they're running their own websites, it's a safe bet that someone at your store knows Google Analytics inside and out. If not, there are plenty of experts out there in and out of our industry who can help.

Before anyone asks, no, I'm not being paid by Google to say these things. I'm a firm believer in the platform. I have been for a long, long time. I think it's insane for any dealer to rely on their website vendor's platform solely. It's not that you shouldn't look at what they offer. It's that you shouldn't necessarily trust what they're telling you.

The Most Abused Statistic

There are plenty of numbers that vendors throw out there. Most are legitimate. Others are designed to make their offerings look better than they really are.

The most abused statistic thrown around in the automotive industry is "Conversion Rate." It is often considered the most important statistic to look at when judging website performance. In reality, nothing could be further from the truth.

If your marketing efforts are working, your conversion rate will go down. Most dealers are surprised by this statement. Most vendors adamantly disagree. It's not debatable. It's a well-known fact to those who understand how search marketing and other internet marketing efforts work, especially those outside of the industry. Automotive seems to be the only industry that tries to hide this fact.

There are many reason why this is true, but here's the easiest one to understand. One of the goals of your search marketing efforts is to expand your market reach. People in your local area can find you today. They are searching for you by name in most cases. Check your analytics and you will find this to be true.

With search marketing, you are trying to reach people who are not searching for you by name. You are trying to reach into your competitors' markets. You are trying to cast a wider net. Unfortunately, the result is that your conversion ratewill go down and this is confusing to some.

The only number you really want to affect is your total conversions. You want more leads. Effective search marketing makes this happen. As more traffic from other areas starts coming to your website, the chances of them becoming a lead diminish. If Jeff is in Lebanon, Ohio, and he starts ranking for the term "Cincinnati Ford Dealers" 40 miles away, he will get more leads. However, his conversion ratewill go down. People who search for his dealership by name are going to offer the highest rate of conversion. Once he starts branching out to other areas, suddenly his rate goes down but his total leads go up.

He's not losing any of his other leads by ranking in a competitor's area. He's simply increasing the traffic with people who are less-likely to put in a lead. That doesn't mean it's bad. If he's getting 500 leads today against 10,000 visitors, his conversion rate is 5.0%. If he expands to be found in other areas outside of his immediate vicinity, traffic and leads will go up but his conversion rate will go down.

Last month, he got 500 leads from 10,000 local visitors to his website. This month, he is ranking better in other areas close to his. Now, he's getting 540 leads from 11,000 visitors. His total conversions went up by 40 but his conversion rate went down from 5.0% to 4.9%. As he continues to expand his reach, the same thing will continue to happen - his rate will go down but his leads will go up.

* * *

There are other misleading statistics out there and we will be going over them in-depth on my webinar on Wednesday titled, "How to Simplify Analytics to See the Numbers that Make a Difference". I strongly encourage dealers to check it out. After all, it's free (as always).

Check it out on Dealer Webinars.

Bryan Armstrong
Great post J.D.! One of my BIGGEST complaints with my OEM (MANDATED) Provider is they will not allow analytics on my site. Quite frankly, it's B.S. and insulting.

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