Great stuff, thanks [USER=648]@Dan Sayer[/USER] for asking the question, and I always sit up in my chair when [USER=4695]@reverson[/USER] shares his analytical approach. I don't expect all to agree with my approach, but for the 3rd party classifieds (TPCs), I measure:
- Cost per VDP
- Cost per lead (lead/chat/text/call)
- VDP/SRP ratio (how often you "win the click")
- VDP/lead ratio (how often the platform generates hand-raisers from VDP)
- Cost per sale (only as good as the CRM and in-store processes)
Now when I'm consulting with dealers, and representatives of the TPCs are in the meeting, they are quick to point out, "George, the lead counts you're tracking are not the ONLY leads/showroom traffic we're providing the dealers." To which I say, you are 100% correct. However, that effect is felt evenly across all TPCs, and by measuring these metrics and comparing them across all TPCs, I am able to compare apples to apples. It is then up to the dealer to decide, are they overpaying one provider vs. another? Or do they feel the exposure is worth it, and they are willing to hold their nose?
I also like measuring, and discussing with the dealership their SRP to VDP ratio, as I feel it is meaningful. Maybe so many years at Dealer Specialties and presenting to dealers on the importance of merchandising, and "winning the click", which I still think is critically important. This number tends to range from 0.8% to 2.8% (big swings). CarGurus tends to have a lower VDP/SRP ratio vs the other big-2. I attribute that to the fact that CG's SRPs display more vehicles per page than the others. Carfax.com has the highest VDP/SRP ratio by a long shot for most dealers, I don't have a definitive opinion on why, perhaps their shoppers are further down the funnel?
Finally, the VDP lead ratio is interesting, how often the VDP is compelling enough to generate lead. This varies by provider, but in general Cars.com is higher than ATC or Gurus, and by far the #1 is Edmunds with a VDP to lead ratio that is 3x-5x larger than any of the TPCs. [USER=10720]@Ian Isch[/USER] could share his opinion, but I would guess it is the way they entice the shopper to submit lead information in order to unlock prices.
My sample set is small, I work with under 20 dealers today, but I can tell you of all the monthly reporting and analytics I provide the dealers, they love the TPC data the most.
