How do you Define Conversion Rate?
These days, there are a lot of companies selling their wares to attack the “digital revolution”. Some provide a superior product and can back up their results with data. There are many more that offer subpar or downright awful service and seem to actively hide their performance metrics. This seems like a foolish thing to do, since any vendor that you work with should be able to provide you with vast troves of data on your digital performance. Never has there been a medium that allows you to track results as much as the internet, so you should not be content with simple Bounce Rate, Unique Visitor count, and Pages per Visit. Not that these are bad metrics, they just don’t tell the whole story. Regardless of whether you use an outside vendor or had an in-house “guru”, you have no doubt been presented with these metrics in order to show just how well they are doing. Rather than accepting this as airtight truth, we highly recommend Dealers focus on one metric, at least until they become more comfortable with the data and understanding how to measure success.
Conversion Rate is a magical number that tells you how many visitors complete a defined task on your or your vendor’s website. It can be used in pretty much any situation, so you only need to learn one definition. It is easily tracked and can give you great insight into the success (or lack of success) for whatever you’re paying attention to this month. But most importantly, tracking conversion rate requires you to actually define your conversions and consequently makes you define success!
Define success, you ask? How silly! Everyone knows that success is measured in car sales, right? Unfortunately, this is a terrible way to measure success on your digital performance. Rather than focus on how limited a definition of success this is (remember the Service department out back?), we’ll just point out that tracking website visitors to unit sales is VERY difficult to do and skips the overwhelming bulk of the sales process. Too often it seems that dealers and managers expect one thing from their digital vendors, whether it is website providers or digital marketers. But do the vendors sell the cars? If they had suggestions on how you could desk a better deal, would you listen to them? Why not focus on what your vendors can control and demand improvement in these areas?
Hence the importance of Conversion Rate. In order to drive more leads, you need to segment your customers as much as possible and make it easier for each segment to take the necessary steps towards a sale. Wouldn’t it be helpful to know how successful you are at targeting customers at the end of the buying funnel (did they ask for an e-Price?), subprime leads (did they fill out a credit application?), or customers just starting their search (did they download a brochure)? What about setting an appointment in Service, ordering a part online, or downloading a coupon for a car wash? By focusing on Conversion Rate, you are able to assess your success with many separate opportunities; but more importantly, it requires you to concentrate your efforts and gives you much hard data to determine the success of your SEO efforts and ad campaigns. Moreover, it allows you to set expectations and provides a baseline on which you can continually work to improve. To read more about how to attach this metric, read a previous post on Avinash Kaushik’s Digital Dealer presentation on the subject.