While doing research for an upcoming book, I asked marketing managers and GMs how they evaluate the success of their marketing investments. While total sales opportunities and units sold per month are the ultimate KPIs, many dealers have flat-to-declining sales.
In these times, many automotive managers have been told to cut expenses. So, they often use their gut or CRM reports, not accurate data, to decide which marketing channels to cut. When I asked what tool(s) they use to determine marketing effectiveness, many managers said that they use their CRM lead performance reports to inspect marketing ROI.
If dealership managers want to optimize their marketing mix, they have to stop using CRM lead performance reports to inspect the impact of marketing investments.
Automotive CRM platforms were never designed to inspect Return on Ad Spend (ROAS). They were designed to create an ordered process to communicate with consumers who were interested in doing business with the dealership or who were existing customers.
The design of CRM platforms and the usage of CRM lead performance reports have created myths that I want to debunk. This is not an attack on CRM platform providers but rather a challenge to dealership managers to stop using the CRM as a marketing inspection tool.
CRM Lead Sourcing Is Misleading Managers
Most automotive CRM platforms assign the lead “source” based on which platform is sending the lead into the ADF/XML file. For many dealers, all leads from their Website forms come into the CRM labeled “Website Leads” or some variant that includes the form type, such as “Website Leads: Get ePrice.”
A very small percentage of dealers have their CRM platforms configured to show the referral source of the shopper session that generated the lead form submission. For example, a Facebook ad that generated a Website lead would come into their CRM as “Facebook Website Lead.”
Statements such as “My Website produces the highest quality leads,” “My Website generates first-party leads” or “Organic traffic is my best traffic source” are based on reporting myths. CRM lead performance reports, in most cases, are only based on Last-Click Attribution (LCA), which hides the multiple marketing channels that influenced the lead or connected the consumer to the dealership’s inventory.
CRM Reports Hide Marketing Influence
When dealers properly configure Google Analytics (GA), they can upgrade their reporting to show a more accurate picture of which marketing channels produce the most hard leads and the most engaged shoppers.
For example, take this report, which is tracking only conversions from lead forms, phone calls, chat and text messages generated from a Website visit.
When you record all conversion channels in GA (lead forms, calls, chats and text messages), you can produce a multi-channel funnels report that shows all sources of Website traffic (assisted and last click) that produced a lead. If the dealer had his or her CRM configured properly to see referral source — most do not — the dealer would have received a report from the CRM that said:
• Tier 2 advertising (line 6) produced eight leads, but the truth is that 253 leads had a Tier 2 visit before converting.
• YouTube traffic stinks (line 8) because it produced zero leads in the CRM. The truth for this dealer is that YouTube was involved with 251 conversions.
• TECOBI social media engagement (line 9) only produced 24 leads, but 251 other consumers they touched converted into a lead.
• Facebook is a poor performer (line 10) because it only generated eight leads in the CRM. The truth is that Facebook referral traffic from paid campaigns were involved in 250 conversions.
In all four cases, the number of LCA leads is small when compared to the wider influence the dealer’s mix had to produce conversions. Tier 2, Facebook and YouTube are working well to get consumers to identify themselves through one of four channels.
Once exposed to effective marketing channels, consumers will often come back via a direct or organic search, which skews CRM reports and creates myths about the value of organic traffic.
Generating Better Reports: GA Is Just a Start
The Assisted Conversion report in GA can also be generated to show which channels are bringing the most engaged shoppers, those who did not have a hard conversion. The combination of these two reports (lead channels and engaged channels) gives dealers a competitive edge and produces a picture that is far more accurate than their CRM would show.
What GA cannot show dealers is how many consumers engaged with their brand on marketing portals like Cars.com, Edmunds or Autotrader and generated a showroom visit without a visit to the dealer’s Website. The influence of traditional marketing channels (radio, broadcast and cable) is also a challenge to map to Website traffic or sales. The good news is that solutions are coming to market that address onsite and offsite marketing influence.
Start by Cleaning up GA
Most dealers need to clean up their Google Analytics, start recording all conversion channels, start measuring Website engagement and upgrade their marketing reports to show multi-touch, cross-device sales attribution.
Marketing managers who are responsible for more than 10 stores know that their group is spending millions of dollars a year on marketing and yet have limited insights to what is working. It’s time for the auto industry to move away from Last-Click Attribution and embrace more competent strategies to sell more cars in a digital age.