It’s All About the ROI
Every now and then I find the automotive digital marketing controversies and handwringing on sites like LinkedIn, DealerElite.net and others to be both humorous and disturbing.
Humorous, because it’s really not all that complicated (yet some people insist on adding drama to everything); and disturbing, because no matter what the issue, the bad advice always seems to outweigh the good. (Usually because those creating the controversy, commenting on it and/or providing advice have an agenda – someone always seems to have an agenda.)
After I began writing this post, a new controversy erupted that the pot stirrer de jour called #ShiftGate. (To read the article that started it all, follow this link.)
While the issues raised in #ShiftGate are genuine and the controversy is warranted, the discussion has (in my opinion) been pulled in the wrong direction toward some “right” that dealers have to 100% transparency from their vendors. As the vast majority of dealers I know will agree, this is a slippery slope, and not really that important.
If by transparency in the #ShiftGate controversy we are talking about knowing the Cost Per Keyword, Cost Per Lead, Cost Per Sale, Cost Per Visitor, Keywords Lists, etc., then I’m all for it. However, if the rallying cry for greater transparency involves learning the margins of these vendors (regardless of Google’s policy), then I have to throw a flag.
I don’t think customers of any business have a right to know that business’s gross margins. No one cares what the jeweler makes or what the furniture store makes; why should they care what a dealer makes? And likewise, why should a dealer care what his or her vendors make?
Frankly, I don’t care what Shift Digital’s margins are, and neither should anyone outside the walls of the corporate offices at Shift. I only care about performance. I only care about results. In other words, I only care about the Return on Investment.
(Think of it this way: VENDOR A spends $3,000 of your money and drives 60 sales, while VENDOR B spends $3,000 and drives just 6 sales. Would you care that VENDOR B only made a 10% margin and VENDOR A made a 90% margin? I know this is an absurd example, but it goes to my point that ROI – and not the vendor’s cut – is all that matters.)
I want your ROI…
When it comes to lead & sales generation activities, there is Return on Investment and then there is everything else – and everything else is meaningless.
What are these lead & sales generation activities of which I speak? In automotive, they include:
- Third Party Lead Providers (like Autobytel)
- Third Party Classifieds (like Autotrader)
- Search Engine Marketing Vendors (like those mentioned in the #ShiftGate controversy)
- Website Companies (after all, what is your website’s primary purpose if not to drive business to your dealership?)
- Website Add-Ons (like Black Book Online)
Be prepared, a few vendors who are not Third Party Lead Providers will argue they should not be on this list, as their business is not primarily about “lead generation.” Sorry, but you should be on this list, and you are on this list. (After all, it’s my list.)
Many vendors (who want to sell you on their conference speaking engagement or their product or their service) get dealers all wound up about how this vendor or that industry is stealing from dealers.
The Attack on the Third Party Lead Providers…
One of the most misguided efforts happens when vendors claim that a dealer should never use any provider of a particular service or product. Because, as their argument goes, in doing so they are somehow hurting their own marketing efforts.
I see this most often with attacks on the dreaded Third Party Lead Providers.
Everyone from the CEO of Autonation to those hawking their brand of digital shiny object takes shots at the Third Party Leads business. It seems they do so without understanding ROI; without understanding the online consumer.
Not everyone in the market for a vehicle will go to your website – regardless of how much you spend with the Third Party Lead detractors. Without regurgitating the study David Kain and I completed a few years ago: Dealers must cast a wide net. This includes using all possible providers of ready buyers.
Do your own math…
It’s easy for someone selling a competing product to provide their own reasons why you should avoid Autobytel or Autotrader, for example; but until you’re willing to do your own math, you will end up chasing shiny objects that drive no real increase in sales and often destroy your marketing budget.
So, should you buy Third Party Leads? I don’t know… until you answer the following:
- Do you have good processes in place?
- Does your team stick to your follow-up schedule?
- Do they make all their required calls using approved scripts?
If you answered ‘yes’ to all three questions you would be a fool not to buy Third Party Leads. Your competitors are buying them; and if you choose not to, you are at an undeniable competitive disadvantage (regardless of your current “VDP strategy.”)
Even if you answered with a sheepish “I’m not sure” to these three, you have the benefit of math to determine your ROI.
My ROI Stinks for These Leads…
If your team is not closing Top-Tier Third Party Leads (those leads generated for the most part by the Third Party on your behalf and not bought in the lead marketplace) at an adequate rate, then it’s probably a “you problem.” Someone is selling a car to the majority of these leads, why not you?
(It’s really not that complicated and it doesn’t require a three-day seminar.)
Great, But I Can’t Determine ROI on My SEO and SEM Spend…
Now, back to #ShiftGate and the idea of transparency in the world of search marketing (I’m throwing in SEO here, because I see this area as also needing added transparency for dealers):
The #ShiftGate controversy has increased the number of past and current clients that have reached out for my opinion on not just SEM, but also SEO. And, even though those of you reading this post are likely not my clients, I will give you the same advice I provide to them:
For SEO providers, I recommend asking the following questions before making a decision on whether or not to pay for their service: (you want a “Yes” to every Yes/No question):
- Will you provide a monthly recap (either an online report or email) that includes links to the actual content written on behalf of the dealer by the SEO company for the prior month? If so, please send a sample report.
- Will you track the keywords we select and provide a monthly ranking report that shows relative position changes? If so, please send us a sample report.
- How many other dealers in our market are also your clients for SEO?
- Please provide 5 website references for your SEO.
SEM (and the REAL transparency questions to ask the #ShiftGate vendors)
For SEM providers, I recommend you ask the following of any potential vendor (you want a “Yes” to every question):
- Are the e-leads delivered into the CRM as having come from the PPC provider and not just from the website? (Comingling leads is a great way some SEMs like to hide the true ineffectiveness of your PPC spend.)
- Are the phone calls derived from the PPC budget tracked separately from other website calls?
- Will the PPC reports show the actual spend BY KEYWORD for ALL keywords? If so, please send us a sample report.
- Will we have the opportunity to see the actual performance of all keywords, including LEADS BY KEYWORD? If so, please send us a sample report.
Like I wrote earlier, it’s usually not that complicated.
I also wrote earlier that “someone always seems to have an agenda.” Given this, you’re probably wondering about my agenda. How does Steve Stauning benefit from entering this fray?
The answer is: I don’t – in fact, I expect to be slammed by more than a couple readers.
Just like my 100% free video training (that roughly 2,000 salespeople, managers and receptionists enjoy every month) and nearly every article I have ever written, I get absolutely ZERO monetary benefit from this. My schedule is already pretty full; I sell my company’s products as white-label solutions via resellers (so I have nothing to sell you); and I turn down more consulting gigs than I accept.
I’m not bragging; I’m just setting the stage so that when (not if) the attacks to this post start, please remember: There is nothing in this for me. There is, however, likely something in it for the detractors…
(By the way, like you, I can’t wait to read the final reports for #ShiftGate, coming after May 4.)