Is Return on Investment or size of Expense more important with vendors?

Deciding priorities when it comes to KPIs and ROI

It’s a conundrum auto dealers face in every aspect of the car business: go for ROI or most affordable?

Go with a factory-mandated website from VinSolutions or use DealerOn? Use a CRM from Dominion or maybe DealerPeak? Go with TrueCar or not? Boost website traffic with AutoFusion or Netsertive? Plus, there can be a dozen or more choices in each category. And then there’s live chat and other website engagement tools. Yet more vendor choices, and more questions. With chat is it better to opt for a third-party fully-managed chat, or handle it in-house with dealer salespeople or BDC staff using chat software? And do you pick a $15 or $30 gift card website `popup for a test drive to draw shoppers into the showroom?

All of these questions require answers, and attention to Key Performance Indicators (KPI), but at the end of the day (or end of the month), you have to look at ROI and whether these digital channels are selling cars. Ten different industry analysts will give you ten different lists, but here are a few to consider in the mix:

  • VDPs - vehicle details page views
  • Sight traffic
  • Time spent on website
  • Leads
  • Appointments
  • Sold units

Speed Shift Media shares some wisdom on the matter in one of their articles:

“There are plenty of marketers and advertising specialists online to advise those in the auto industry, but only you can determine which KPIs are best for your specific needs. Dealerships that have the right kind of KPI measurements and the ability to tweak their activity as a result of these KPIs have a much better shot at driving up their sales thanks to online marketing.”

You can find several data sources to evaluate these numbers. Vendors generally provide data for their specific product, you can look at the data from your website provider, and even dig into your CRM. However auto industry experts like Paul Potratz, Brian Pasch, C-4 Analytics’ Justin Cook, and others, will all tell you that these number can be subject to a number of variables that can skew the data, and that the antidote to these potential inaccuracies is Google Analytics. Properly structured, this incredibly powerful tool can give you a view of your marketing performance as sharp as NASA’s deep space views from the Hubble Space Telescope.

“Understand that with the right analytics, advertising is measurable. Whether you want to measure every click or the effects your traditional marketing has on walk-in traffic, technology now exists to do that,” explained Justin Cook at the 2015 Driving Sales Executive Summit.

One of the things about ‘indicators’ is they do just that: indicate. Ultimately, once you’re looking for actual dollars headed to your pocket, ROI comes into play. At the recent CBT Automotive Conference and Expo in Atlanta, Brian Pasch explained dealers need to adopt a ‘Cost Per Engagement’ model. Where is your focus on dealership marketing expenses?

  • Cost per lead
  • Cost per sale
  • Cost per sold unit

But with a focus purely on these numbers, a dealer can quickly lose focus on the most critical data: the number of Sold Units and their associated Gross Profit. Focus on this metric is critical because the only way these costs, or expenses, become an investment is when money flows back in.


Tom LaPointe CarChat24 Digital Consultant 24/7 Interactive Automotive Dealer Website LIVE CHAT Solutions - fully managed, backup support, or chat software 727-638-0195

A U.S. Marine Corps veteran, Tom has an MBA in Marketing and is an automotive writer and author with nearly 20 years experience in virtually every aspect of the retail auto industry. He has been involved with the internet from the beginning, building websites at Johns Hopkins University in the 90's, and has been a performance leader in nearly every dealer role, from sales and service, to BDC / internet sales and viral marketing.

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