Digital Dealer Overview – Avinash! Pt. 3
Continued summary of Avinash Kaushik’s Digital Dealer presentation.
The third point that AK discussed was that of Value, referring to economic value, not some intangible definition of value that we so often try (and sometimes succeed) to create. I mentioned the analytical tools that he uses in a previous post; this is where he really goes into detail on how to use the available resources in order to increase your returns. Kaushik started the discussion by pointing to the massive pile of data that we have, which is growing exponentially. This data will not provide any actual value without the basics already being in place, namely Influence and Experience. However, once you have the proper foundation, you can provide unparalleled levels of accountability with this vast amount of data. You can track exactly where you are converting potential customers into actual customers (and conversely, where you are not). Impressions, visits and page views are worthless if there is no conversion, giving inspiration for his acronym HITS: How Idiots Measure Success. Instead, you should be measuring Conversion Rate for each metric that you are tracking, recognizing that the metrics you are tracking will not always lead to an immediate sale. He also emphasized the importance of Bounce Rate and Abandonment Rate for each page on your site so you can determine how well you are targeting traffic and consequently if you are providing a poor experience.
Kaushik presented a simple but powerful spreadsheet to show how you can maximize returns from your dealership’s digital strategy. In it, he calculated the economic value of each digital medium on which your dealership has a presence versus the micro and macro conversions that you are providing for customers. The below example is a crude reproduction of his spreadsheet:
As you can see, certain mediums produce higher economic value than others; Cars.com and Autotrader do a far better job at collecting Trade-in Value requests than anywhere else, while the OEM site get more traffic printing brochures. The idea here is to isolate the areas that have the highest economic values and focus your advertising efforts for that particular call to action. This seemingly basic idea really blew my mind (I recognize that my basic recap and elementary mock-up may not have the same effect…). I can’t think of a more concise and deliberate calculation for your return on investement from advertising! The insight that this simple breakout provides is priceless, though that is an overstatement since you can measure exactly what price is worth paying.
The one thing missing here is how you actually measure the economic value for each cell in the spreadsheet. Kaushik provides some insight into measuring digital marketing economic value on his blog; while it does not seem to be an infallible process, he seems pretty confident in your ability to calculate this metric (and therefore, I am confident as well). This post gives great insight into the process of setting up a digital marketing measurement model, as well as the value of doing so. Really, there are tons of his posts that I could point to that provide great insight, I recommend you read them all…
There are many more points to cover from this discussion that will be covered in the next post. For now, I prefer not to distract from what I feel was the most valuable lesson from the entire conference.