The Right Metrics to Track
Finding the right metrics to track at a car dealership can be far more painful than it should be. With the new world order driven by the internet and big data, we constantly see dealers struggling to focus on their biggest opportunities because they either have too much information or they don’t know what they should be digging for. Before you bother tracking your Bounce Rate, Pages per Visit, or Impression Share, make sure you are tracking the operational steps that sell cars. After all, you can drive all the web traffic you want but it’s not going to lead to any more volume if you are prepared.
Leads – Why do we feel the need to point out something so obvious? Because many dealerships are not doing it and most are not doing it as well as they could be. We’ve talked before about the importance of following up on each lead for the long-term, but it is also important to set up a system that allows you to identify each lead that comes your way. Make sure all of your different marketing campaigns have unique phone numbers and URLs, include coupons and promo codes, or start asking people what motivated them to contact you. Do whatever is necessary to find out where you prospective buyers are coming from. Dealerships spend far too much money on advertising to ignore such a fundamental metric. Just because it isn’t easy to track doesn’t mean you shouldn’t be trying!
Appointments – This metric should be far more accessible, since you are hopefully recording all appointments that are set in your dealership. If your Appointment to Lead ratio is low, your people probably need training on the phone or on email responses. Further, if you track by salesperson or BDC rep, you can get a very clear idea of who should and should not be talking to customers. We’ve seen benchmarks for this ratio (# Appointments ÷ # Leads) range from 25% to 40%. If you find that you are above 40% the first time you calculate it, you are probably not doing a good job tracking leads….
Shows – This is one of the easier metrics to track, and it’s one of the easier issues to correct if there is a problem. Your Show to Appointment ratio (# Appointments Shown ÷ # Appointments Set) should be at least 75%. If it is lower, have management call and confirm every appointment. Not only would that help improve your show rate, it would also act as an initial manager turnover. Again, tracking this by salesperson will allow you to identify weak performers.
Sales – In theory, this should be the easiest metric to track. However, we are not just referring to “sold vehicles”. If you cannot connect the dots from sale to show to appointment to lead, it doesn’t count. Want another fun exercise? What’s your ratio of Sales that have an attributable lead source to those that “just walked in”? Surely you don’t think anyone does that anymore!
We’ll talk about more advanced metrics to track in future posts, but it is a really good idea to make sure you are using spreadsheets similar to (and hopefully more advanced than) the ones below. If you want us to ship you a working version of all three, just contact us!