As digital marketing has evolved in the automotive industry, the utilization of vendors to help market online dealership inventory, remains a constant. In theory, it is a tremendous way to reach hundreds of thousands of customers who may be in the market for a new or used vehicle, right? Utilizing someone else’s platform and technology to reach customers near and far, coupled with the increased capabilities and variety of online retail tools, makes the idea of marketing and selling a car fully online that much more feasible. But have we come to a point where keeping a particular third-party vendor is motivated more by fear of missing out, than actual performance?
Every dealership we work with has anywhere from one to four, third-party sites, and they all ask the same question, “Is it worth it?” Accessing your analytics or reporting dashboard will help you understand if you are fully utilizing the tool by way of strong inventory mix, excellent merchandising, mileage, notes, trim levels and everything in between. Does your package suit your inventory levels post pandemic or are they still suitable for the 100+ extra vehicles you used to stock? Do you see huge exposure volume but poor conversion? What conversion rates are important? It can be a daunting undertaking, trying to determine what works and what does not which leads to the decision to stay, but it does not have to.
Digital marketing can (and should) be measured to death, but sometimes we try to reinvent the wheel which makes the task of understanding the data difficult. Below are several metrics that may help you understand exactly how to measure the performance of your third parties.
- SRP/VDP Conversion Rate: How often are customers who view your vehicle at the Search Results Page (SRP) converting to a Vehicles Details Page (VDP)?
- Cost per Vehicle Sold: How much is it costing you to sell a vehicle, and how does it compare to what it costs to sell a vehicle versus your total advertising budget?
- Cost per Session: Utilizing Google Analytics to show how many sessions your third party generates and understand what you are paying for users to visit your site. Subsequently, you can review the health of those sessions and weigh the cost versus engagement for each session.
- Cost per Lead: How much is it costing you to gain a customer’s information? How valuable is that information (i.e., a qualified lead versus a nonqualified lead)
- Average Sessions/Month: How consistent is your session volume from a third-party vendor and how does that compare to other sources of referral traffic?
While these are simply some areas to consider, it is important to note that each dealership will value the ROI gain from each vendor differently. The important thing is to consider different aspects of performance, and then apply that to your dealership goals and digital marketing strategy. Set goals, measure performance and make informed decisions based on data, not simply the fear of missing out.
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