There is a famous saying that states, “You can’t improve what you don’t measure.” While there is a significant debate on whether quantification is the solution to most things in life, this saying rings true for digital marketing.
Running any dealership in a technology-powered era means you must spend significant amounts of money on digital marketing to acquire more customers. Any marketer worth their salt knows that to run a successful digital campaign, they have to receive a certain return on their investment (ROI).
ROI refers to the profit you earn from the money you spend on digital marketing efforts. ROI is a vast concept and can only be measured by tracking certain key performance indicators (KPIs). Knowing the correct KPIs to focus on and tracking them is a dilemma most digital marketers face. There are basic KPIs, such as the number of visitors to the site, and what content they engaged with (e.g. VDPs vs. Service). Thanks to abundant technological solutions, there are also ways to measure complex KPIs such as shopping cart abandonment rates and email opt-out rates.
Therefore, KPIs are essential for digital marketers to measure ROI and know their marketing campaigns’ actual impact.
3 Important KPIs for Automotive Digital Marketers
The automotive industry spends more than $12.4 billion in digital marketing alone. Dealers have evolved their thinking and no longer look at segmenting their ad spend into “traditional” and “digital.” Rather they are segmenting the budgets by “branding” and “converting.” Branding campaigns have the goal of raising awareness of the dealership, the brands (OEMs) whose products they represent, service operations and how they help the communities. Converting, the larger segment of their budget, has the goal of getting conversations started with the dealership — leads, calls and chats. To ensure these returns, marketers need to carefully track these three fundamental KPIs to improve their performance:
1. Cost Per Conversion
Cost Per Conversion (CPC) is an effective and simple measurement tool that is applicable to any marketing campaign. Simply divide the campaign cost by the number of leads, calls and chats. Keep in mind that these are contacts not sales. Knowing your baseline will help you to understand what your CPC goal should be.
For example: If your marketing cost-per-sale budget is $350 and your team converts leads, calls and chats into sales at an average rate of 10%, then your CPC goal should be $35. This CPC is an average for most franchise dealerships, however, it may fluctuate higher in larger metros areas or lower in more rural locations.
2. Traffic by Metropolitan Area
Every dealership has a target market that is defined by a geographical area. This designated selling reach is typically based on the metro size, competing brands and population density. When dealerships work with a digital marketing or advertising agency, it’s important to define your target market and ensure your campaign dollars are specific to your audience and market reach. Avoid the wide-cast approach or spray and spend as this will create overspending and underperforming marketing metrics.
While a dealership may sell an occasional vehicle out-of-state, it is not the intention of the marketing efforts. Measuring the campaign traffic by metro area will help you understand where your audience is engaging with your marketing and which campaigns are more or less effective.
3. Rate of Engagement
Measuring page engagement helps to paint the rest of the picture. Over the years, a lot of attention has been paid to the number of vehicle display page views. While there is some value in this, it doesn’t communicate the visitor’s intent. By measuring what the visitor is engaging with (pictures, payment calculator, CARFAX reports, etc.), we can better understand why they came to your site and what inventory or services matter to them.
Now that we have established how important KPIs are, the question emerges of where to easily keep track of them. Look for a partner that offers solutions that enable businesses to track all the important metrics of a single digital marketing campaign in one place.
Also look for customizable features that allow you to take advantage of session-based call monitoring, which uses pixel technology to capture the customer’s session information, user ID, as well as what they click on while on your website. This information can then be shared with your Google Analytics to expand your reporting, which includes this behavioral information.
Options can include behavioral tracking that is based on unique dynamic phone numbers (local and toll-free numbers) for tracking your marketing campaign effectiveness. When a customer dials the number, this data is then recorded, measured and reported in a reporting dashboard. Unlike click-to-call, you know that all calls are measured and attributed back to the campaign that made the phone ring — including referral traffic from vehicle listing sites.
Without detailed performance metrics, zeroing in on the most effective business strategies becomes little more than a guessing game.