As a youth, I thought I was a fast runner. Then I saw what world-class speed was at a track meet. You may think you are doing great with your Internet operation, but without clear comparative metrics it's difficult to really know.
There are two areas to measure with metrics: 1.) Performance Metrics (sometimes known as Process Metrics). 2.) Financial Metrics. To really grow your operation, you need to measure both.
Performance Metrics can be used to measure your lead sources, website performance and even the performance of your Internet team members. Let's review these key metrics.
Lead source (third-party leads) performance can be measured as a performance metric and a financial metric. The performance variable has to do with the quality of the data available to your team for follow-up. If a lead source does a good job for your team members, they will try to provide as much information as possible to ensure a connection with the prospect.
To improve the connection ratio it is important to have a good email address and at least one good phone number. Many leads arrive with one or the other. Work with a provider that strives to provide both.
In addition, the information on the vehicle of interest and the customer (correct name) is essential. Many “lead harvesters” that troll the search engines for lead prospects have low thresholds for capturing prospect request information, not allowing customers to submit details beyond make and model.
Lead harvesters hurt the industry since they essentially capture prospects and push them toward a dealer before they are even ready. It makes it difficult for an Internet salesperson to connect, appoint and sell.
To get the best first-party leads, have a high performing website and measure its effectiveness every day. I like the simplicity of the Dealer.com report available daily by email.
It shows total unique visitors and the number of forms submitted electronically. This data allows you to quickly determine your daily conversion rate (not including phone calls, chats or text messages) and therefore know if your website is working for you.
The report also shows which models were most clicked. It even drills down to the most searched vehicles by stock number. This really helps you determine if what you are trying to promote is achieving your objective.
With Internet team performance measurement, we tend to measure the results. But if we study the day-in and day-out activity levels, we would generate better results.
Meet with your team and establish performance standards for the number of calls to be made per day, number of emails to send, quality of the emails and quality of notes.
Work with your team on establishing the benchmarks for the percentage of leads you connect and interact with, the percentage that become kept appointments (goal of 25%) and the percentage that purchase when they visit the dealership (goal of 60%).
These percentages let you to achieve a 15% close rate overall. Of course, the better the leads, the better the close rate.
When I first started training on Internet operations I totally focused on performance metrics, not financial metrics. As such, dealers and general managers were not as engaged at this level and sometimes they lost interest in the numbers.
But they really realized the Internet was a true profit center when we created a monthly Internet performance summary that outlined the monthly gross profit while projecting the annual gross profit.
We review the financial metrics at the lead source level monthly as well as year-to-date so the dealer can determine not just the sales and close rate, but the total gross, gross average as well as cost per lead and cost per vehicle sold.
This brings it home. It allows employees to have pride when they have a good month and quickly determine what needs to improve if they have a slip.
David Kain is president of Kain Automotive Inc. He can be reached at [email protected] and 859-533-2626.