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Saturday, July 28, 2007

What Can Be Done to Improve Website Leads?

We’ve done websites for car dealers across the country, and of course we have several clients in our local area as well. The different approaches by two local dealerships has given us a unique look into how much a website design really impacts the amount of leads generated from the dealership website.

These two dealers, we’ll call them Dealer 1 and Dealer 2, are comparable on most levels. They both spend a lot of money on marketing. Both use the same 3rd party classified sites (Autotrader.com, Cars.com, AutoMart.com, AutoExtra.com, and a couple of smaller sites). They also use the same magazines to advertise locally with similar multi-page spreads. Even the inventory and customers are similar – they both sell in the $7k-$15k range, have the same number of cars on the lot, and both do mostly sub-prime finance. When Dealer 1 seemed to be doing so much better than Dealer 2 as far as website leads, it warranted a closer look.

When Dealer 1 signed up with us over a year ago they didn’t have a lot of input into their site design. They wanted to trust our expertise and see the results. We did a very simple design, easy to navigate, always 1-click away from inventory, and a very short credit application.

Dealer 2 was the exact opposite. This dealer was adamant in the design and features he wanted on his site, even though most were against convention, and certainly against our recommendations. Their site has been more of an ongoing project – constant changes requested, seemingly new features added every couple of weeks. It’s truly become an endless pit of feature-creep. A prime example of what can be done as opposed to what should be done.

Upon a recent evaluation of leads and overall statistics, here’s what was uncovered. We literally went through every lead ever generated on each site to clean out things such as multiple inquiries and bogus leads. We wanted to do an apples to apples comparison, so accurate data was necessary. Here’s what we found:

Visitors on Dealer #1 site only spend half the time of visitors on Dealer #2 site.

Bounce rates for Dealer #2 are twice that of Dealer #1.

Dealer #1 receives 1 good lead for every 22 website visitors (4.5%). Dealer #2 receives 1 for every 91 visitors (1.1%).

So what does all this mean? One way to look at it is that Dealer #1 has a site which doesn’t confuse visitors (lower bounce rate), they’re able to find what they’re looking for easier (lower time spent on site), and the calls to action make customers more apt to submit leads.

Dealer #2 has a site which isn’t nearly as user-friendly, has a lot of content that customers don’t care about, and lacks the necessary calls to action which help generate leads.

This all goes back to what I’ve said before on other posts. Just because something can be done, that doesn’t mean it should be done. Car dealers by nature want to do things their own way, but not listening to the people you pay to help you can cost you a lot in the long run.

Friday, July 27, 2007

Car Dealers Creating Their Own Advertisements?

I ran across an interesting blog post today that I have mixed feelings about. For some car dealers it could be a great thing. For others it's a disaster waiting to happen, or maybe I should say waiting to get worse. The original post talks about the advertising we've all seen before...a dealer's kid "starring" in their commercial or other things that seem like a good idea to the dealer but are the epitome of bad advertising.

If you're a local (Virginia Beach) reader then you've probably seen one local dealer's TV commercials with his dog. I cringe every time I see that commercial. The funny thing is, I had a young couple ask me one day where the dealership was for "that car dealer with the dog". I wanted to say "I don't know" out of spite, but someone paid good money for that horrible commercial so I may as well help them get their ROI.

OK, back on topic here. There is a company website which is linked from the original blog post that enables auto dealers to produce their own advertisements. They seem to have a pretty decent idea. It looks like their advertising "experts" have created some sort of templates for different media that are customized via a web interface by the dealer. For the professional dealer who has the time or wants the extra control, this is a great thing. I just wonder how many dealers will end up using this to create their own "bad" advertising campaigns. Hopefully there is some sort of educational aspect to what they're doing to guide dealers in the right creative direction.

Wednesday, July 25, 2007

Search Engine Marketing Companies for Auto Dealers - Be Careful Who You Trust

I received a call today from one of our clients who has been considering a pay per click campaign for their auto dealership. Pay per click (PPC) is one form of search engine marketing and can be very effective if done properly. This search engine marketing company has been pushing them to sign up for their SEM program, and the dealer wanted a professional opinion. He asked me to contact the company as a representative of his dealership and give him my thoughts about the company. The first words that came to mind were "smoke and mirrors".

The gentleman who had been calling the dealership was a sales rep, but he clearly had no product knowledge. When I asked even basic questions, he refused to give a straight answer and kept throwing out all sorts of features like "we'll get your dealership on the first page of Google". That's all good, but do you really have to tell me that 10 times when I'm trying to ask about your contract length? Rule #1 of sales: answer the prospects question either directly or indirectly. I eventually asked about pricing and the sales rep said he would call me back in 30 minutes.

45 minutes later I was on the phone with another client and got not one, not two, not three, but FOUR consecutive calls from this sales rep. It's OK to be eager about a potential sale, but don't harass your prospects. I was able to take the 4th call and he was ready for the price quote. I'll probably never understand this, but for some reason the rep wouldn't give me the annual price. It wasn't too difficult to figure out because he did tell me that 15% was due up front and that came to $630, but I flat out asked him what it broke down to annually since I didn't have a calculator handy and he had to put me on the phone with the IT guy who was more knowledgeable about the technical questions. By this point I was trying hard to believe this whole call wasn't a joke.

Enter "the IT guy". Same smoke and mirrors, just a louder voice. He couldn't answer any of my questions, he just kept saying how many clients they have nationwide. I even asked a 5th grade question to this guy which he dodged: "You say you guarantee page 1 of the big search engines. How much of the monthly payment to you is actually allocated to the keyword spending?" Surely they must have some percent, right? Apparently I'll never know, because he just started talking about how they're the "Wal-Mart of the keyword bidders" so they get discounts on their bids. Yeah, OK. Someone bids $1.00 per click for something and you only pay $.80 per click for placement above them because you have 6000 clients?

I'm making fun of these two people I spoke with, but the reality is that they do have a lot of clients. Search engine marketing and PPC campaigns are confusing to a lot of car dealers, and unfortunately there are companies out there who make their living by preying on these customers who don't know any better. Anybody can set up their own PPC campaigns fairly easily. To manage them effectively and get the highest return on investment, the campaigns must be done properly. My advice to any dealers is to thoroughly research any SEM company you're considering doing business with. Find out what exactly they do for their clients besides simply setting up a PPC account. Some questions to ask: do they provide ongoing analysis? How much of your money goes to actual clicks and how much goes to the company for managing it? Will they create effective landing pages for your website to maximize your ROI?

Choose wisely, and don't buy snake oil just because someone tells you it's great.

Autotrader vs. Craigs List - The Results Are In...

My highly un-scientific study of Craigs List vs. Autotrader.com is finally complete after 6 months. Which classified site works the best to sell used cars? The ongoing post and final conclusion can be seen in the Autotrader vs. Craigslist results. Stay tuned for another experiment with a different type of vehicle and additional classified sites thrown in the mix.

Thursday, July 19, 2007

Latest Inventory Management on Autotrader.com

While some might think I'm a disgruntled former employee of Autotrader.com based on some previous comments, this isn't true. The fact is, Autotrader was a decent place to work, and more importantly, grow as an auto industry professional. One thing I learned during my time there was that the employees on the technical side of things (programmers, etc.) are a very talented group of individuals.

This is clear with the latest launch of Autotrader's inventory management system (Dealer Community). The old system worked well and rarely went down, however it was probably a little too basic for some dealers. An important thing to note is that different dealers have different levels of computer experience, and some just plain don't care about a lot of bells and whistles. One advantage of the new system is that the old system is still available to those who are more comfortable with it. As someone with fairly good technical abilities, the new system is a lot better.

If you're not an Autotrader dealer and don't have access to the Dealer Community, you can see the demo of the new system by clicking here. Time will tell if dealers actually use the tools provided, but they are at least there for the dealers who want to make the most of their Autotrader.com marketing dollars.

Friday, July 13, 2007

Google sued for deceptive advertising practices involving autos

The Australian Competition and Consumer Commission is suing Google for for deceptive advertising involving a couple of auto dealers and an auto classified site.

The ACCC is also alleging that Google, by causing the Kloster Ford and Charlestown Toyota links to be published on its website, engaged in misleading and deceptive conduct in breach of section 52 of the Act.

Further, the ACCC is alleging that Google, by failing to adequately distinguish sponsored links from “organic” search results, has engaged and continues to engage in misleading and deceptive conduct in breach of section 52 of the Act.

It appears that the two car dealers referenced were involved with a company called Trading Post which offers listing services to car dealers. Trading Post bought Google AdWords keywords that contained the names of the referenced dealerships. This topic has come up a few times on some of the blogs that I read. I know that DealerRefresh wrote an entry about this topic and a discussion continued about the ethical concerns.

This suit gets a little confusing, but it seems like the two dealers compete with Trading Post for automobile sales, but also list their vehicles on the Trading Post site. Trading Post actually has a listing page for one of the dealerships.

So it seems that Australia has some issues with a company bidding on keywords that contain business names (probably trademarked) and diverting a consumer that clicked on a paid listing to someone else's site. It will be interesting to see what happens to this case.

I think it will be virtually impossible for Google to monitor all of the advertising listings in AdWords. One of the benefits of AdWords is the simplicity and self-service nature of advertising. It is pretty simple for anyone to setup AdWords and run their own advertising campaign.

Tuesday, July 03, 2007

Bankruptcy and Auto Loan Approvals

Looks like the sub prime auto finance market is on a path for continued growth. I just read an article from SubPrime Auto Finance News about the number of bankruptcy filings hitting an all time high for the first quarter of this year, up about 66% over the same period last year. While this is highly discouraging for the American public who seems to be taking on more debt than ever, it must have buy here pay here and rent to own car dealers optimistic.

In my opinion, I think over the next few years we're going to see more and more of the larger dealerships tapping into the sub-prime market. We've had large franchises contact us recently to create secondary websites for them aimed at this market. I expect to see these types of requests increase, because whether a dealer wants to put up with the traditional problems of sub-prime financing or not, business is all about revenue.

The ripple effects will also be seen in related products such as RFID tracking/shutoff devices and programs geared toward dealers who want to offer financing to sub prime customers.

All in all, we've watched this market grow very fast in the last few years, and it isn't showing any signs of slowing down any time soon. If you as a dealer have the stomach for it, "All Aboard".