Why Conversion Ratios Mean Nothing In This Industry

I’ve discussed this argument before on several forums, including Jeff Kershner’s Blog… yet it appears there are still plenty of naysayers out there who are letting the “e-commerce” title on their business cards get to their heads.

Automotive Internet sales is not e-commerce. I’m not splitting hairs here - the reason real e-commerce sites live and die by the conversion ratio is because there is no other practical goal to be met. If the visitor doesn’t convert (meeting a goal, be it a lead, a sale, an account registered, etc.), then the site has failed its purpose. But your dealership site doesn’t work this way - a high percentage of your visitors will use your site successfully without you ever knowing, and every time that happens, your conversion ratio goes down. It doesn’t mean there’s anything wrong with your site; the fact is simply that customers use your site for many purposes other than submitting a lead. We’re still at a point where 99% of vehicle purchases happen in-person, not online. The real goal of a dealership is a sold unit, and for that, most of us share a conversion ratio of 0%, because the website is not where the transaction occurs. Furthermore, Internet Sales Managers get paid on sales-related success, which means they often neglect non-sales conversions, like a Service appointment or an ordered part over the phone.

Here’s a short list of things that can happen on a dealership website that, while beneficial to the user and the dealership, will often not be counted as a conversion:

• Visitor calls a non-800 number
• Visitor views inventory or special offer and walks into store
• Visitor prints inventory or special offer and walks into store
• Visitor uses site to find hours and directions
• Visitor submits Service appointment or Parts request (some dealers do count this)
• Visitor returns repeatedly in anticipation of an appealing offer or new inventory
• Visitor emails an employee email address rather than submitting a lead
• Visitor uses site to confirm pricing they were given on the lot

Some of those occurrences should be counted, and some shouldn’t, but the point is that all of them will likely drain your precious ratio even though their experience on your site was successful.

Now, the other big argument to be made about conversion ratio myths relates to the importance of marketing your site. This is where things really get ironic, because as the graphs below will show you, the more you work to market your site, the lower your conversion ratio should drop. Between search engine marketing and other avenues, you’re trying to reach out farther and farther when you market on the web, and you’re going to be generating site traffic from people who have less and less inherent interest in your store.

Take an Austin, TX dealer for example. You’ll notice that a dealer who does absolutely nothing to market their site will only generate “incidental” traffic: traffic from users who live in the immediate area and are making it a point to seek out the dealer personally. Obviously those people are the most likely to convert to a lead. But those people are cake, and most marketing on the net is done to reach out to people who don’t know who you are or where you’re located. So if you set up a dealer blog or YouTube video that gets national exposure, you’ll end up bringing in traffic from hundreds of miles away. These users are much less likely to convert to a lead because they don’t live near you and weren’t coming to your site to buy a car in the first place… but that doesn’t mean you’re marketing unsuccessfully. You’re still boosting exposure, search engine ranking, and online reputation. And all that will help you to generate more leads in the long run.

If there’s one thing I’d like you to take away from all this, it’s the need to understand that your dealership site truly is your virtual business. It’s not just a lead generator or sales tool. Your site should be considerate of all your store’s concerns: Sales, Service, Parts, Finance, customer retention, employment, corporate information… rest assured that years from now, any dealership site that only focuses on Sales will be fodder for price shopping, and nothing more.

Tagged as: car dealer website, conversion ratio, site statistics