Imagine a dealership that only tracks closing ratios against write-ups. That team may or may not be doing a solid job. If the write-up percentage against walk in traffic is good, then the team is performing. If the write-up percentage is poor, the dealership is missing opportunities. The same case can be built for the Internet department. Very few dealerships track conversion rates from their web site. Most are tracking closing ratios, unique visitor count and time to connect with incoming e-mail leads, but conversion is disregarded. It does take a little effort to track conversion since you are pulling from multiple areas, but it is a key metric that every dealership should track.
What is conversion?
Conversion is taking a prospect from simply looking at your web site to the next level of engagement. One formula that can be used is phone ups plus e-mail leads/unique visitor count.
Phone ups from the web site can only be tracked if you are assigning specific 888 numbers to your web site. These numbers must be different than 888 numbers assigned to your Auto Trader pages and different from Cars.com. You should even assign different 888 numbers to each department within the web site. This allows you to break out the service calls from the sales calls. E-mail leads should be easier to track. The unique visitor count comes from your web company analytics. If you don’t get analytics, you can get this number by using www.compete.com. Some dealers use the Compete site as a means of confirming the metrics that the web company is reporting.
Why is conversion a big deal?
The people hitting your web site are in the sales funnel. We will not know where they are in the sales process, but they are actively engaged. These are the people that you want to impress. We believe that the average customer is hitting five to seven different dealer web sites during the sales process. If your site is identical to the other six that the customer reviews, your conversion numbers will suffer. If your web site is boring, people will not stay on it. If your web site isn’t easy to navigate, your conversion numbers will be low. Conversion is a very big deal because this is the metric that allows you to score the effectiveness of your web site, the gateway to the dealership.
Is there is a direct tie with time on site and conversion? Yes. This is logical if you think about it. If you have something to offer the sales prospect that is unique and special, they will be more engaged and more likely to go to the next level in the sales funnel. The job of the web site should be both driving unique visitors and presenting a case to the prospect that your dealership is the best option. If you only have time on site metrics that are one-three minutes, you are losing conversion opportunities. Integrating professionally produced custom video into the web site will drive this metric. The key is to measure time on site each month and then make adjustments. The best numbers that I have seen are in excess of 10 minutes. If a customer reviews six dealer web sites with an average stay of three minutes, but she stays 10 minutes on one, which dealership has the advantage?
What is a good conversion rate?
The average web site conversion rate is 3%-7%. In addition to your web site, the models that you represent and the number of dealers in your area influence conversion. A Chrysler dealer in the middle of Iowa should not compare his conversion rate to a Toyota dealer in San Diego. The key is tracking your individual numbers to develop a baseline.
Let’s compare the hypothetical results of two dealerships. Dealership A’s web site is getting 15,000 unique visitors each month while the dealer across town (Dealer B) is tracking 5,000 unique visitors. Both dealers are tracking at 20% for a closing ratio against leads. Should Dealer B get depressed? Upon further investigation, Dealer A is only tracking a 1% conversion rate while Dealer B is tracking at 10%. Let’s work through the math:
Dealer A Dealer B
Unique Visitor count 15,000 5,000
Conversion rate 1% 10%
Leads 150 500
Closing ratio 20% 20%
Sold units 30 100
Dealer A may have a boring web site or a confusing site or an ugly site or a site without any original concepts. Clearly something is wrong. It is similar to having too many lead providers and burning through the money to drive opportunities that the Internet department is too busy to effectively handle.
What are directors doing to drive conversion and unit sales?
Jeff Jones from Serra Auto Group focused on a video strategy to hit a high of 19.5% with his conversion numbers in the spring of 2009. He has averaged 15.5%-16.5% for the past 12 months. Jeff was featured in Digital Dealer magazine several months ago. He added a video strategy in key areas that a retail prospect is most likely to hit: new cars, used cars and monthly specials. Please note that a high quality video solution is important. Don’t just focus on the cheapest solution.
Another key point is to make certain that each pre-owned unit has well-drafted custom comments. Merchandise the inventory with at least 10 photos, video and emotionally charged descriptions. Which of the following descriptions would get your attention?
Option I: Gold car loaded
Option II: Gold Rush! 2009 Volkswagen CC 4dr. White gold metallic grabs your eye and two-tone heated leather bucket seats cradle you in comfort. Audacious power sunroof and premium sound system/CD player sooth both eyes and ears. VW factory certified with balance of five-year or 60K mile warranty! Mine this beauty today at XXXX.
It takes work and energy to create comments like this for the entire inventory each month, but it is worth the investment. Option II was a screen capture of one unit from the largest CPO VW dealer in the country.
Make the information on your site descriptive and memorable. Create monthly specials that change each month. Post pictures of the staff with interesting bios. Link customer testimonials to the site. Use links from other relevant web sites to enhance the experience on your site (Facebook or interesting YouTube content). Keep in mind that the site is not for you or your management team. The site should always be geared from a consumer perspective. If a consumer is reviewing your site, she/he is comparing your site to six other dealer sites. If your site is more engaging and more compelling, you will push a higher percentage of people down the sales funnel. Your conversion rate will increase. Like most things in the retail automotive business, results are directly tied to your investment of time and energy. If you invest wisely, results will follow.