Article

Measuring the Internet Department Results

July 2008, Auto Dealer Today - WebXclusive

by Harlene Doane - Also by this author

The one thing everyone has discovered is that no one has figured out exactly how to wrap their arms around a topic like Internet sales. The reason is the landscape, like all technology, is in a fluid state—always moving, always changing. The other problem with measuring and monitoring this activity is there is no “authoritative” process to be found. Dealers aren’t very consistent on the data they keep for this department yet.

Even the debate over whether Internet sales are incremental business or just business that has shifted from another media source has never been settled. About the only thing the industry as a whole can agree on is that Internet sales, regardless of your definition of an Internet sale, are here to stay, so you might as well figure out how to measure and monitor them.

What are valid measuring sticks? You need to have traffic in order to generate leads and leads come before sales, so start by tallying the unique visitors to your site. Then measure leads. Over time, you should see some trends in traffic and leads generated from your own site, which will help guide you in creating search engine marketing campaigns.

Further breakdown your lead sources: dealership Web site, manufacturer Web site and third-party leads. Several in the industry are stating that dealers should ramp up their dealership Web site to replace their third-party lead sources; however, that’s not where most leads are coming from just yet. Dealer data reported to NCM Associates indicates that third-party leads are still the top source (by percentage of leads) of all dealership types for new and used vehicle with the only exception being domestic new vehicles. In that category, the manufacturer leads received were slightly higher than third-party leads.

Once you have the lead, it is all about setting an appointment and getting the appointment to show. Current benchmarks for Internet leads are as follows:

 Benchmark for Internet Leads
  Domestic
New / Used
Import
New / Used 
Highline
New / Used 

Appts Made
As % of Leads 
19.9 / 37.0  23.5 / 33.4  20.4 / 33.0 
Appts Kept
As % of Made 
75.2 / 76.8  73.2 / 71.8  71.6 / 85.8 
  
If leads and appointments blaze a trail to kept appointments, then you should ultimately arrive at sales. Are your gross profits in line with benchmark Internet departments?


Benchmarks for Internet Sales - Gross Profit

Domestic

Import

Hightline
 
New          $1,460  $974  $1,798 
Used $1,718 $1,626 $3,162

After the sale, there is still some measuring to do. How many people are in your Internet department? Gross profit per employee is also important. What is your Internet employment expense? This expense consists of salaries and bonuses of your Internet team. Last but not least is your Internet department cost. This would include the cost to maintain your Web site including IT, hosting and all lead cost. Once you have procedures in place for measuring all of these numbers, you are well on your way to managing your Internet department.

**All benchmarks are compliments of NCM Associates and have been provided by Kevin Cunningham, director of business development.  Questions, concerns or comments regarding benchmarks or Twenty Group programs can be e-mailed to [email protected].

Vol 5, Issue 5

Your Comment

Please note that comments may be moderated. 
Leave this field empty:
Your Name:  
Your Email:  

Blog

On-the-Point

Jim Ziegler
Objects in the Rearview Mirror

By Jim Ziegler
The past is right behind us and the future is coming fast. The Alpha Dawg plots a course for your store’s success and shares advice for Elon Musk, Johan de Nysschen, and pre-owned managers.

The Big Talent Drain

By Jim Ziegler
The Alpha Dawg tackles the shortage of talent in the managerial ranks and reflects on Amazon’s rumored foray into vehicle sales, the imminent used-car correction, Hyundai’s plan for the Genesis brand, and the untimely passing of Tammie LeBleu.

A Faster Horse

By Jim Ziegler

Strangers in the Mall

By Jim Ziegler

Opening Observations

Over the Curb