How To Attract & Sell The Millennial Car Buyer (PART 7)
TRANSCRIPT: When we talk about these ROI measurements, the digital ROI measurements, these have evolved. I want to look at three categories. This is where I place them. You can change where you place these measurements, but these are where I place them. The three categories that we’ve created for these, the first one is unreliable measurements. Those are in red. These have been proven to be easily gamed in the past, and they’re the easiest to fake today.
Things like impressions. If someone is selling you impressions, run. Okay? Run the other way. I don’t know if you’ve heard of banner blindness, but people don’t notice banners the way that they used to. We’ve all trained our eyes. Doesn’t matter which website we’re on, we don’t look at banners, and so impressions are worthless. Plus we know there’s lots of fraud going on out there where the banner may be below the fold, but it’s counted as an impression.
Run, don’t walk, when someone wants to just sell you on impressions.
Open rates of your emails, those are also easily gamed, because we’re taking the word from the person sending out the emails. There’s been lots of great studies recently where a lot of the email marketing companies out there were selling you junk.
Click-through rates and clicks and visitors, these are all gamed, and so these are unreliable measurements. I’m not interested in these things on the surface. We’re going to dig a little deeper when we get into the contingent and the safe measurements.
See, impressions are not ad views. Between the outright fraud and publisher errors, this is what we know about. We know that impressions are worthless. Even in the relative, impressions are worthless. Right? When you’re comparing two sources and someone says, “Hey, the cost per impression, the CPM, cost per a thousand impressions is $8 and they’re $12 over there.” Does it mean the one that’s $8 is 33% better because they’re 33% cheaper? I don’t know. Probably not.
See, in the relative, impressions are worthless. Of course between the murky reporting from your SEM company and the bot fraud, so are the other things on this list. There’s so much click fraud out there that it’s amazing and it’s every day. They say there’s $7 billion a year in click fraud happening on the Internet today, and so I’m not going to rely on these measurements. They are unreliable, and I’m not going to base my spend on these measurements.
Now when we talk about the contingent ROI measurements, we’re starting to get into measurements that I’ll live with, that I can measure and make decisions about. When I talk about VDPs, vehicle detail page views, and bounce rate, these are relative to the traffic source itself, and they’re contingent upon the landing page or your inventory mix.
For example, if your inventory is not priced to market. If you’re a Honda dealer and all you have are a bunch of used Civics on the lot, you don’t have any Jeeps or other vehicles like that and you’re not priced to market, you’re priced above market, you’re going to get a lot fewer vehicle detail page views than the guy who has the convertible Mustang and the two Wranglers, and he has vehicles that others are looking for more than just your used Accords.
It’s important to understand that I’m going to measure vehicle detail page views, but it’s going to be relative to that source, whether the source is CarGurus or Cars.com or my own website. My vehicle detail page views are going to be relative to that source themselves, and I know that it’s contingent on my inventory mix and my pricing.
Same thing with bounce rate. Bounce rate is relative to your landing page. Here’s what I mean. If someone uses your name, Steve’s Ford, and they find your website and they look at one page and leave, that’s a bounce. Right? That’s a 100% bounce. Is that a bad thing? No, probably not because my phone number is on every page on my website. Right? Isn’t that true of your dealership?
They might have got the information that they want. If you’re linking your ads correctly and they’re going right to a good landing page, people are going to see what they need to see, they’re going to drop everything, they’re going to drive down to the dealership and they’re going to buy your car, and that would count as a bounce.
Conversion rate is also contingent. Conversion rates are contingent on what it counts. I know they’re still doing it, so I’m not going to call them out. There’s a website company out there that was showing 35% conversion rates to dealers with their websites. It’s asinine. It’s not true. It’s a lie. Okay? What are they counting? What counts as a conversion? Is it leads? Is it lead plus phones? Do service calls count in there, map lookups? Right? What are you counting as a conversion? Once I know what you’re counting, then it’ll be relative to that source’s conversion over time.
Let’s say I’ve got a group, and one website company counts map lookups as part of their conversion, and another one only counts leads and phone calls, and only sales leads and phone calls. They’re going to be vastly different, aren’t they? I can’t compare them together, but I’ll certainly compare them to themselves over time.
Cost per click is another contingent measurement. It is relative to what keywords you’re buying among many other factors including fraud. When you’ve got an SEM provider, a search engine marketing provider, who says they can lower your cost per click by 50 cents a click, I don’t know what that means. Is that a good thing? I don’t know.
Maybe your last provider wasn’t buying your name, Steve’s Ford, and the new provider wants to buy your name. Guess what, when you buy your name, it’s a lot cheaper. Of course when you buy your name, those people were looking for you anyway. Between the click fraud that’s out there today, the cost per click is just barely contingent measurement, but I’m going to look at it, again, relative to that source over time.
Now the safe ROI measurements, these are the ones that I like. These are leads and sales, but leads that I speak with and sales that I make. See, there’s something called connection rate, connection percentage that you see on here. That’s a safe ROI measurement.
I’ve got a lead source. We’ll look at a spreadsheet that I like to use in just a minute. I’ve got a lead source that generates 100 leads for me, for example. My team, I’ve got a BDC and they call all 100 people over the course of the month. They get a hold of 12 of them. They’ve got a 12% connection rate. That’s absolutely horrific. It means these leads are fake. Right? The connection rate is what makes my leads a safe ROI measurement. Sales are always a safe ROI measurement.
Cost as a percent of gross is a safe ROI measurement, but relative to the source. Your website’s cost as a percent of gross. Say the website costs you $1,000 a month, and you made $10,000 in gross from that website in the month. Then your cost as a percent of gross is 10%. I can tell you right now your cost as a percent of gross with Cars.com or AutoTrader is going to be higher. Right? It’s just the way that it is, but I like it as a safe ROI measurement relative to the source over time.
Cost per lead and cost per sale. Again, leads I speak with and sales that I make. I can use cost per lead and cost per sale as safe ROI measurements for that source and similar sources.
“Steve, Steve, wait. What about the 61%? Right? This is the 39% What about the 61% Right?”
According to DrivingSales, 61% of buyers make no contact with us before they show up at our lot. Don’t we need engagement like VDPs and map views and visitors to measure ROI?” Let me tell you something. We need to know these when they’re a valid number. Right? We need to know these to tweak our inventory or pricing. We’ll talk about pricing later.
Using them as a true measure of ROI, more as a safe measure of ROI versus contingent measure of ROI, is folly because you will be overspending on one provider, I guarantee it. I’ve seen it happen. I’ve seen dealers waste thousands of dollars every month because the VDP, and we’ll do some VDP measurements, but a certain VDP measurement is lower for provider A than it is for provider B, so I’m going to spend more on provider A, even though the VDPs on provider A really weren’t real.
Let’s do this. If we agree on the 39% and the 61%. If we say DrivingSales data is correct, which I believe it is, 61% of buyers make no contact with you before showing up, and 39% do. If we agree to that, then we should be able to apply some safe measurements across all digital marketing vendors to determine some ROI.
Let’s say you’ve got a source that claims high attribution, high engagement, and that source happened to send you 10 leads last month that equaled 2 sales. The actual sales from that source in my ROI reports would be 2. Can’t we just extrapolate from there and credit them with X more unseen sales? Right? Pick the number X, I don’t care. If they say that their attribution and their engagement is 82% of your business, you can’t give them credit for 82% of what you sold, but put some number there.
I don’t care what you put. If they sent you 2, give them 150% more of what we call attributed sales, and give them 5 total sales when you’re trying to measure their ROI. Again, if we can agree that 39% will connect with us before they buy and 61% won’t, we can easily extrapolate from the real leads and real sales that we get from someone. We can extrapolate what they should be getting credit for through attribution or engagement.
All right, let’s get back to the 39%. When we talk about the 39%, I want you to understand, your website is the best lead generation tool you have when created and managed correctly. It has only 2 goals, your website: to attract visitors and to convert those visitors into buying, that’s it.
If you want to triple the valid leads in sales that you’re getting today on your own website, just follow my 100% free recommendations on SteveStauning.com. Go to SteveStauning.com. We don’t have time to do this whole thing today. It’s a full series of videos out there.
Go to full series videos along the right hand column, go down until you see How to Convert More Website Visitors into Buyers, click on that, you’ll see my series 100% free. If you will follow the recommendations in that free series, I guarantee you will triple the leads and sales, the valid leads and sales, that your dealership’s website is generating today.