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Jared Hamilton
From: Jared Hamilton
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Focus on Total Conversions, Not Conversion Rate

Conversion Funnel There's a big, fat lie in the automotive industry that has been circulating for years. The idea that many hold onto is that conversion rate is the most important number when trying to determine the quality of a website. This couldn't be further from the truth.

Here's a fact - the worse your search marketing is, both for SEO and PPC, the higher your conversion rate is going to be. This cannot be disputed. If buyers are only able to find your dealership on search if they're typing in your name, that means that the only people visiting your website are already inclined to consider doing business with you. Searches for you by name will always yield the highest conversion rates from the visitors.

As your search marketing expands and you start bringing in people from a more diverse range of searches, the traffic goes up, the total number of leads go up, but the conversion rate drops. Total number of leads, however, go up. It's very simple once you understand the dynamic.

Let's say you're currently getting the majority of your search traffic from a variation of your name. Look at your analytics to see if this is the case. With the majority of your traffic coming from searches for your name, the math may look like this:

  • * Traffic from Search: 5,000
  • * Conversion Rate: 10%
  • * Total Leads: 500

Now, as you improve your search marketing and expand your reach, your traffic can go up. Let's say you improve your SEO and start ranking in not just your city and for you name, but in other cities as well. Let's say you're outside of a metro area and through proper search marketing you're able to reach into this market and expose your inventory to a wider range of buyers. Your traffic will go up, but because these visitors didn't find you by name and since they're probably further away from your dealership, the rate for these visitors drops in half. You may get 1000 extra visitors at a 5% conversion rate, yielding 50 more leads. You haven't hurt your ranking for searches of your name, so the original 5,000 visitors are still intact. Now, the numbers look like this:

  • * Traffic from Search: 6,000
  • * Conversion Rate: 9.2%
  • * Total Leads: 550

Many would have you believe that the drop from 10% conversion rate to 9.2% conversion rate is a bad thing, but the important number to note is that the total number of leads went up as a result.

Your goal as a dealer is to sell more cars. It's mathematically inefficient to extend your search reach and as a result your conversion rate goes down. However, the number to focus upon for your website is total conversions. How many leads are you getting? How many sales are you generating from these leads? This is the bottom line that truly affects the success of your website and your business.

Conversion rate is a great indicator that can help you make tweaks and adjustments to your current site, but look at your traffic trends when considering conversion rate fluctuations. Improved conversion rate can be good, but if it's associated with a drop in traffic, you should look at your search rankings and the keywords driving traffic to determine if there's an underlying negative that's making the numbers look good. Conversely, if your rate goes down, see if there's a correlating increase in traffic.

Get more leads that convert to more sales. That's the end goal. Don't get lost in the numbers that some are throwing out at you.

Cassie Allinger
Very nice post JD, you make some great points, but I don't 100% agree. IMO, there are two false assumptions made here. 1) That there is one good strategy for search marketing, and 2) that all conversions hold the same value. Surely the strategy that you outline can be successful, but that doesn't mean that it's the only one. Marketing should be focused on goals - whatever those may be - and from those goals, strategies need to be developed. I do agree that the focus shouldn't lie on any one particular KPI (like conversion rate), but the KPIs that you're focused on should align with your goals. As for those conversions - they come in all shapes, sizes, and values. To clump them all together is a mistake and won't allow you to properly attribute their value. At the end of the day it's just not that simple, and "more leads" is not always the smartest answer.
Ed Brooks
JD, respectfully, it’s not about the conversion rate OR the total conversions, you need to focus on the TOTAL SALES. If you look at the car business from the perspective of an eCommerce guy, you are right that total conversions are much more important than the conversion rate. The problem is that the car business isn’t transactional online. The vast majority of customers (67% to 69%) will walk into the dealership without making any previous contact with the store – no emails, no phone calls, nothing! The “information gathering” customer is relying on your website and third party sites to ‘pre-shop’ for their next car. Then they walk in when their research has been completed. Your website’s primary job isn’t to get shoppers convert online. It’s not even about getting phone calls. It’s about generating more buyers. And most of these buyers will walk in. Yes, you want to expand your website’s reach. Yes, you want to expand the number of leads. But never lose sight of the end goal – more sales. The simple truth is that buyers “convert” on the showroom floor because your website did its job: it brought you exposure, it informed your shoppers, it increased the purchase intent of your shoppers, and eventually led many to their next step; an email lead, or call, or for the vast majority, led them to your showroom.
Cassie Allinger
Nicely said Ed - so very trure!
Cassie Allinger
Nicely said Ed - so very true!

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