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The Myth of The Dealer Web Site Conversion Ratio

G

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Guest
First off, let me say that I’m excited to see Managers and vendors even discussing the matter of conversion percentages on dealer web sites. Another step in the right direction. But just as we always get caught up in the simplicity of misleading national statistics, there seems to be a lot of people adopting of the rule of the “2-3% conversion ratio” as the primary measure of success on dealer web sites. That’s a bad habit to get into, and I’ll tell you why.

First off, you’re making the grave mistake of thinking all dealer web sites bring the same types of traffic. Whatever gave you that idea? Just because two dealerships have matching stats doesn’t mean their sites are performing equally. Do their visitor stats exclude internal traffic? Are they getting visits from new buyers only, or do they have users coming back again and again? Are the leads being generated by marketing efforts from outside sources (like big billboards and newspaper ads directing traffic to the site), or is the site making magic on its own?

A second point of concern is search engine presence. Take two dealerships with identical visitation stats. Web site #1 has zero search engine presence, where the only people who make the leap from Google to their site are the ones querying the dealer name specifically… it’s only by sheer luck that they get substantial traffic numbers, because they’re a well-known dealership in the area. On the other side, web site #2 has true long tail presence and is heavily optimized, reeling in search engine traffic for such off-the-wall queries as “ford mustang replacement headlight”. Site #2, having such great visibility in search engines, is bound to have a lower conversion ratio than Site #1, simply because Site #2 has successfully marketed to prospects who are less likely to be in the market for shopping at that dealership. So we reprimand the latter site for having a lower conversion ratio? If they stopped optimizing for search engines, their conversion ratio would skyrocket… tell me that makes any sense.

And what about all the social network marketing some of us are doing? If you run a blog that is well-indexed by search engines, you already know how many eyeballs you’re getting from people in other cities, other states, even other countries. If you’ve set up a MySpace or anything else where you’re shamelessly promoting your dealership, do you really expect that incoming traffic to convert into a lead at a 2-3% clip? Again, it’s your ingenuity and forward thinking that’s causing a low conversion ratio on your dealer web site… that doesn’t mean you should stop social marketing, does it?

You get the idea. It goes on… sites that do a great job of converting to phone leads vs. emails, sites that drive users to other conversion tools like Black Book Appraisals or another store in a dealer group… there are plenty of reasons to ignore the magical 2-3% conversion standard. Don’t let the statistics alarmists of this industry trap you in that mindset.
 
This is a great post. What can be more important for Dealers in 08 than measuring their website conversion %? I would argue a point seemingly left out in the discussion. What about the science/technology allowing for the measurement? Where are the standards and how are they being applied by the CRM's and Website Development folk? Why is unique visitation data variable from source to source? How does anyone truly measure how many people came to their site-from where and did what? And is this "measurability" analyzed over any quantifiable time frame? Until somebody somewhere comes up with "Universal Measurement Criteria" governing all of this, it's still smoke no matter who reports, dissects or spins it.
 
Mitch -

You address some great points, but let's look at the dealer website movement from a 50,000ft view.

- From 2000 to 2006ish, dealers were just happy to display their inventory online with a cool looking web presence. The science was simple: I have a website and sold X number of cars.

- In late 2006 to 2007, dealers began thinking hmmmm how can I drive more traffic and get more leads then sell more cars. The science again was simple: I have a cool website with X hits per month generating X leads, and I sold X number of cars.

- Now the movement is getting more in line with your points where there is more of a real science or metrics to the formula for online selling. Online merchants have been here for years, but the automotive market is always about 2 years behind the technology curve.

In conclusion, what will happen going forward is dealers looking for website solutions that are conversion focused. They will want to create an A/B testing environment for landing pages, add social media sites to their marketing mix, and build micro-sites for cross linking of sites and SEO. They will also look for one system to track the lifecycle of a lead through the entire process.

There are a lot of details left out of my comments, but again this is just my high level view.

Chad Polk
AutoRevo.com
 
Where I am at right now is I tend to think that we've got an input problem.

The vast majority of our traffic will visit our sites and won't show up as a measurable lead that can be assigned to a sale. We all know we're in an old-fashioned horse trading business where the majority of customers prefer to shop stealth.

Are email quotes going the way of Cassette players?
Nearly a year ago, our infamous Alex Snyder made mention that email quote volume is falling. Customers are into their 2nd or 3rd net based purchase and have they found real value in the email quote system?

Post sale surveys help us connect the dots because buyers can now reveal themselves. Our avg. shopper is shopping for 3 weeks and visits 2-3 dealers before we close 'em. I like watching the % of returning visitors as a metric that reveals value to our visitors.

I am working on ways (ideas) to get get visitors to reveal themselves. If anyone has any ideas, let me know.

I am in NY and I've always admired Chapman''s in-house efforts. Take a look at: http://www.chapmanchevrolet.com/preinv.asp

I have been watching them for years and they've held onto this "Unlock Price" model. It obviously is working. I haven't had a chance to call them to send them an "atta boy" (they've always been ahead of the curve, rockin' in SEO SESRP's before it was cool!).

Joe
 
The idea that a website's conversion ratio as a silver bullet indiciator of success is correct. However, it can not be ignored entirely either.

Site design has much to do with overall "Persuasion Architecture" (how well does your site get its visitors to do what you want them to).

I hit dealership sites constantly where I am usually, tragically and utterly lost as to what the person who designed the site was thinking that visitors to their site might want to do when they got there. It certainly isn't to read through every page on the site, nor click through various banner ads, nor watch commercials.

I want to buy a car.
I want to service my car.
I want to buy a part.
I want to call, emailo come to you.

Everything, and I mean everything else needs to be put in this context.

Traffic, clicks, hits, conversion, etc. are all just canaries in the coal mine to the only true metric which has ever mattered... ROI...

Spend this (in dollars, money, people, effort and technology - SEM, SEO, website design, PPC, banner ads, CRM, blogging, social web, etc.) and you will get that.

Are lead volumes falling. Of course they are. As Alex Snyder pointed out, consumers have figured out that "leads" are a path to getting a phone call and request for a dealership visit not a path to a better buying experience.

Do dealership website conversion metrics fall along with this increased consumer awareness? Of course they do.

Focus on ROI... it is timeless.

If you don't like the picture it paints because you try to use price to compete on the Internet... time to develop a better online buying experience... this thinking was one of the drivers behind the shopping cart service we developed at www.ai-dealer.com. Let consumers self-serve their own vehicle purchase from dealers. Require an email address in order to get more than MSRP info. Engage in the real online car buying experience where the consumer is - online and not try to divert an online experience into an offline one.

Jeff has a book by Bryan Eisenberg on this blog (Waiting for your Cat to Bark). If you really want to understand how good your website is at its job, buy the book or their even better one titled "Call to Action".

If you want to get a website worth having, get one from someone who knows how to build a good one. I like www.motorwebs.com but I have no relation to them.

If you want a website where the journey is worth the destination for your consumers, get one that can transact. Try Ai-Dealer or Ralph Paglia at ADP for shopping carts for vehicles, try TimeHighway or Xtime for online service scheduling, try Insignia Group for online accessory purchases.

Market your dealership as "the best dealership to do business with - online or offline." Have a website with easy to understand (from the consumer's standpoint) layout, design and capabilities that they actually care about (transactional websites).

Don't be the best 20th century dealership, be the best 21st century dealership.
 
RE: I am working on ways (ideas) to get get visitors to reveal themselves. If anyone has any ideas, let me know. - Joe Pistell

Hey Joe,

3 things I have seen high ROI's on to capture your customer's info on your website to turn browsers into customers.

1. online chat - outsourced
2. pop up coupons - $250 for info then double coupon if they set the appt.
3. blackbookonline trade values

also, here is an old but good article related to this post.
 
Ever read that "car dealers lag other industries" and wondered what was meant.

Check this link out... top company website conversion ratios (and they mean "those who bought not submitted inquiries / leads"


Coldwater Creek - 23.7
HearthSong - 21.9
Tickets.com - 20.1
Lillian Vernon - 20.0
Roamans - 18.9
Oriental Trading Company - 16.9
Urban Outfitters - 15.9
Lands End - 15.4
The Sportsman's Guide - 15.3
QVC - 14.9

Yes the products are more simplistic than a car, but eBay has proven that it can be done ("a car every 60 seconds" is the quote I remember).

Don't strive to be the tallest dwarf.
 
Brain,
Your clearly one-hellofa-briliant guy. No one can argue that point. But you've baffled me, You write:

"...
Urban Outfitters - 15.9
Lands End - 15.4
The Sportsman's Guide - 15.3
QVC - 14.9

Yes the products are more simplistic than a car...".

Conversion stats like these are useless references to our industry.

==Does the QVC shopper have a trade in?
==Can you deliver a car via Postal Carrier?
==Lands End is Factory DIrect, can you buy a Chevy, Factory Direct?
==Can you goto an Urban Outfitters store and negotiate a better deal than online?

See what I am saying? Industries are unique and BUYERS are very, very smart.

EXAMPLE:
Take a flight and get a rental car.
Flight: Book and pay for the flight 100% online.
Rental: Reserve the car rental to secure your rate but dont pay. Fish for a better deal when you arrive, works every time!

Conversion rates cannot cross industries.
Joe
 
Right Joe, as much as people would like to point a snobby finger at automotive retail and say we're just simply behind the times in Internet Marketing (though it's true for the most part), conversion ratio is not one of the areas where this is a valid statement.

We are one of the few industries (actually I can't think of another besides real estate) where 99.9% of Internet prospects are NOT going to be making their purchase through our web site. Trying to track down success when success means "did we create interest in our store" is infinitely more difficult than tracking down success when success means "did they buy something".

That's why Brian's list above references transactions, and not leads... online retailers aren't ahead of us in conversion ratio - they just have a much easier conversion to measure.

If you're on LandsEnd.com, you're going to do one of the following during your visit to the site:

- Buy something
- Lose interest and exit the site

Now there are other things for LandsEnd.com analysts to look at of course, but which of the aforementioned actions is being taken is a great indicator for them. In fact, it's paramount. 0.1% of their customers are going to leave the site and hop down to their local Land's End shingle to try something on. It is simply not worth considering.

Now take JoeSchmoeHonda.com... a visitor's typical actions could be any of the following:

(Measurable)
- Submit a lead
- Call the 800 number
- Print something out and present it to the dealership
- Lose interest and exit the site
- Call an untrackable number
- Find something of interest, exit the site, and then come to the store

The problem here is that when you look at conversion ratios, the last three options on the aformentioned list all look like the same result: failure. Even the other elements, like calling the 800 number or bringing in a print-out, are only successful if someone actually finds out about it. There's a lot that can happen besides submitting a lead, and good dealership web sites will entice people to make those things happen.

Your dealership web site will never be Amazon.com. The site metrics are just not that simple for high-dollar brick-and-mortar industries. And if it ever does become that simple, we'll be out of a job, so I wouldn't wait around for that to happen if I were any of you.
 
Sometimes you can learn from another industry so that you don't necessarily have to reinvent the wheel. Maybe like Mitch said another "high-dollar brick-and-mortar" industry might be able to provide some insight. I can't recall anything specifically but I have read business articles where a company or industry will look to other groups that have or are currently facing similar obstacles for metric and processes to help them. I would think perhaps high end furniture, jewelry or high end appliance makers like Sub Zero. Just a thought...