The first article in our 3-part series covered the degradation of consumer reach with each click, with each stop along “The Click Gauntlet”. In Part 2, we focus on a new metric, Cost Per Conversation versus Cost Per Click.
The Total Seen and Unseen Cost of Clicks.
Most analytics are wildly underestimating the true cost and effectiveness of your clicks, as they leave out the cost of fraud, labor and software to manage the clicks and the cost to respond and follow up, including hours spent chasing bad leads. In fact, Cox Automotive reports the average sales person spends 11 hours per month chasing bad leads. That said, due to the breadth and depth of each of these areas we do not have the space to address each here. For this reason we will focus on a new metric that distills all of these factors into one - “cost per conversation”.
Question one - why go beyond the cost of a click? The entire reason we buy clicks, traffic, is not to pump up our Google Analytics metrics, but to reach a consumer we can have a conversation with about buying or selling a car. If your performance metrics stop with the cost of a click, you are merely measuring part of the process, but not the desired result.
Often “cost per click” is cited as the key metric to manage your digital marketing against, suggesting the lower the cost per click, the better the performance. However, not all clicks are created equal. Want a low cost per click? Target 15 year olds with a Corvette ad. You’ll drive lots of traffic, lower your cost per click, but you won’t sell many cars. A $10 cost per click yielding 20 conversations and 10 sales, is far better than a $1 CPC yielding no conversations or sales and clogging your system. For this reason we suggest dealers today add cost per conversation to their analytics.
But doesn’t my cost per sale reflect my cost to initiate a conversation?
Yes, but when we measure and focus on this important metric, we can begin to enhance dealership execution by illuminating a potential break point on the consumer path to purchase - the consumer experience when engaging our dealership.
Micro-moments to the Sale
The path to a sale includes many micro-moments impacting the probability of a sale. By adding a cost per conversation to your metrics, it will highlight several areas of opportunities for your dealership.
1.How many conversations per visitor are you generating?
Which sources of traffic or visitors yield the highest ratio of conversations? A conversation is not a lead submission, a phone call or even a chat; often those do not include dialogue about a car. It is a sales person in discussion about the sale or purchase of a car with a consumer, remotely or in person.
2. Conversations per Sale
We can measure this by channel or source and even salesperson or manager.
This is a major reason to measure cost per conversation and not merely cost per sale. We have dealers who engage consumers online with little sales success, despite consumers initiating the request to speak with a sales person. And yes the cost per conversation measurement is often very low, as low as $6.22. But when the cost per sale remains high, despite great efficiency in generating conversations, then we know we have a break in the sales process.
Why? The answer is simple. The dealership is not engaging the consumer in the way the consumer wants or needs. Not providing the information needed, not answering the consumer’s questions, or simply not offering to help the consumer. It’s amazing how many chat sessions still start with a request to provide personal information before even saying thanks or offering anything specific. Recent studies by companies like the Boston Consulting Group have highlighted how this behavior causes friction in the sales process and is inhibiting success.
Let’s look at two dealerships
Dealer 1: We provide service to many dealerships of varying size and locations. Recently we observed a dealership whose conversion from click to conversation was among the highest on our platform, 94.5%. Consumers were responding to the call to action on their website, submitting their buying preferences and trade information, and then initiating dialog with a sales person. The call to action: Want Help Finding the Right Car?. Simple, but effective.
What happened. Consumers were met with messaging that did not align with their request. That is, they were asking for help to find their next car. The first message posted to these consumers was typically a variant of “Can I get your email address” or “When could you come into the dealership”. Guess what happened. Consumers opted out.
Why? They asked for help, provided their buying preferences and trade information, and hoped that would facilitate help, but they got a request for more information and even a request to physically leave their Covid-safe home to visit strangers at a local dealership. Is anyone surprised consumers ignored these messages? Though the cost per conversation was low, the opportunity cost was infinite.
The good news. These failed conversations are all preserved and available for review, scoring, and coaching. So often, these conversational breakdowns go unmeasured and unmanaged because they exist on a sales person’s personal cell phone or get lost in an email system never reviewed, measured, or managed.
Dealer 2: Comparable in location and brand to Dealer 1, this business has had a completely different outcome. Though their CTA conversion is actually below our national average of 79.6%, they are closing far more often. Fully 33% of their online conversations are resulting in a transaction.
What’s different? Their first message to the consumer is of appreciation; an offer of help, empathy, and support. The result? A consumer experience consistent with the dealership’s promise and the auto shopper’s expectations.
So what have we learned?
Measuring clicks, the cost of clicks or even the cost of sale misses a very important and critical part of the process; the conversation between the consumer and the dealership. More conversations about cars with consumers sells more cars, if those conversations deliver value to the consumer.
With more consumers engaging online, outside the showroom, it is now time to shift our focus from invisible clicks to the conversations they are meant to create. How many are occurring, how much do they cost, and how effective are we converting those conversations into sales? The logic seems obvious and yet largely ignored, as so many of the simplest innovations are. Did anyone mention wheels on luggage?
Coming up next in Part 3 we will focus on solutions and opportunities created by new technology and the evolution of the internet to turn more clicks into conversations.
ursus amet tempor sed tristique vivamus.
Tempus et diam cursus aenean libero, sed. Tempor tempor mi integer amet, diam egestas risus proin. Vestibulum auctor diam ultrices turpis aenean eget egestas. Ultricies varius integer volutpat auctor adipiscing sollicitudin.