Focus on improving your conversion percentage
An interview with Stuart Buckley taken from the February 2018 issue of Auto Retail Bulletin.
Talking to the industry recently, there has been a lot of discussion about how times are tough, and how cutbacks might be needed. The motor trade is pulling back on marketing – it is an easy thing to do as it isn’t cheap. But we can add the value if it is used properly; it is important to think of marketing as a profit centre, not a cost centre.
Instead of thinking about the cost per lead and the cost per eyeball on your site, think of the return you get as a result. Follow the leads through the process, and see what profit you make on each asset. People are saying it is tough, but there is more you can be doing.
If, for example, a motor group converts 20% of its enquiries into sales, and if you can increase that by just 2% you are going to sell 10% more overall. But how do you do that?
A lot of dealer groups have a lot of information available to them. The people who listen to the phone calls will know how many there are and if you know where those phone calls come from you can find out which marketing generated those calls. We have seen clients that reduced 25% wasted marketing budget and applied it to things they know work.
Effectively if you are saying that two thirds of your marketing works, and if you apply more spend to that area, then that will get you towards that 2%.
A lot of dealerships make decisions on gut feeling, but the data provided can allow you to make them based on fact rather than feel. You need to spend a bit of time to review, though, and take it channel by channel, working through the type of leads – calls, web chats and emails.
As the market gets tougher, the focus needs to be on improving the conversion percentage. The first place to look is at your cost per enquiry. If you are spending hundreds of pounds for one call through a particular Google keyword, then turn it off. If, however, you are getting several calls for a keyword that only costs a few pounds then leave it on.
If you know that a particular search term, for example ‘Used Audi A3 in Leicester’ converts really well, you can put your bids up by 25% on it. The number of website visitors will drop, but if you are maintaining 80% of leads, have improved your conversion rate because those leads are higher quality and have managed to cut your budget then it is worth doing.
Whatever the size of your business, this involves taking data from your sales team. Find out whether the calls are converting or not. Google Analytics, call tracking technology and post conversion data points will then tell you where those calls and sales came from and whether it is worth continuing spending on the marketing that brought them in.
I was taught to look at data by looking at it over a business cycle. How long does it take from an initial inquiry to a sale? Take that time as a minimum to assess any changes. Whatever you do, don’t ever just turn it all off. Nothing will happen immediately, but in a business cycle you will notice a significant drop of enquiries. Why? Because you turned off the taps and it takes a time to empty the pipeline. It will then take you another business cycle to get those visitors back.
Categorised in: Blog
This post was written by Stevie Chippington