Are You Cutting the Wrong Part of Your Spend?

Are You Cutting the Wrong Part of Your Spend?

Don’t just trust your gut. There are two key components, the CRM Data Layer and the GA4 Data Layer, that will help you make accurate decisions.

Know what you own, and know why you own it.

Today’s automotive data layer empowers dealers to examine success better than ever before. While a growing number understand how a data-driven approach can influence their bottom line in meaningful ways, it’s unfortunate that so many dealers still call the shots on gut instinct alone.

The ugly truth is that many looking to “trim the fat” aren’t cross-examining their channels enough to understand the full scope of influence for each. That short-sightedness, combined with the uncontrollable challenges faced by our industry, has led those dealers to handicap themselves, blind to the fact that both factors are paving the road of opportunity for them to supercharge operational efficiencies long-term.

There are two key components: the CRM Data Layer and the GA4 Data Layer. If either of these does not accurately portray success, then making sound decisions disappears into the mist.

1. CRM Source Accuracy — Over time, CRMs tend to get flooded with so many sources that BDC team members and sales staff can often fumble the ball regarding sourcing and attribution. Putting a lead in the wrong source can get pervasive fast, so loosening the clutter of duplicate sources, etc., can help paint the most accurate picture of success — or lack of — by source. Clean data is the bedrock of better understanding your marketing, and as they say, garbage in is garbage out, and vice-versa.

2. Google Analytics 4 / Event & Conversion Accuracy — Many dealers I speak with still find themselves a bit lost in GA4, so if you haven’t spent adequate energy in that arena, there is no better time than now. As Universal Analytics was deprecated, many dealers haven’t realized that old conversions were added by default into their GA4 auto accounts. It’s important to clean this up, and in many cases, I’ve seen pageviews marked as conversions, which is poisoning engagement metrics. Additionally, make sure that all your vendors are sending desired events to your measurement ID. Many iframe solutions are still not sending these by default, so getting some of this cleaned up can be a manual process.

OK! So now your CRM Sourcing is cleaned up, and your GA4 Conversions and Events accurately account for all technology vendor performance. What’s next?

Calculating Your ROI

For some channels, it’s easy to get 1:1 attribution from lead to sale; for others, it’s a bit more complex to get to that same place. If gross profit from 1:1 sources is not net positive after expenses are paid, then it’s simple. That is where the fat needs to be trimmed — full stop.

Website leads are where you’ll need to do a bit more work to better understand attribution since your CRM does not know when a lead is from organic, paid or something else.

(You’ll also need to bucket all of your chat leads and DR leads into the website lead category when exporting a sales report from your CRM.)

A good scientific method to quantify website leads by source is by using lead-based events/conversions in GA4 by channel and using them as percentages of overall sales attributed to website leads. This is where the importance of clean GA4 data comes in!

Ex: GA4: Lead-Based Events by Channel
Organic: 68% of Conversions
Paid: 20% of Conversions
Referral: 11% of Conversions
Total Sales from Website Leads – 1 Month Timeframe = 65

Channel Sales Attribution
44 Sales
Paid: 13 Sales
Referral: 7 Sales

So, you’ve cleaned up your CRM and GA4 Data, analyzed your sales data by source, and made meaningful conclusions. Now what?

1. Eliminate underperforming channels entirely that are not net positive after expenses are paid. You may have instances of a month or two where the initiative makes sense monetarily, while other months fell flat. If things are not making sense throughout the timespan of a few months and are trending in the red direction, making the decision is simple and well-informed.

2. Reallocate marketing spend to higher-performing channels.

3. Rinse and repeat! Take these measurements monthly and share your findings with key stakeholders often throughout your dealership(s). Good decision making is contagious, and getting everyone on the same page can improve performance, exponentially.

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