Dangers of Marketing Metrics Dependency

Dealer Beware

As Pamela Vaughan so aptly describes, there are many reasons why all car dealers, General Managers and automotive marketing professionals should be aware of the pitfalls around being overly dependent on making decisions based on report data and performance metrics numbers…

: The Marketing Metrics Continuum provides a framework for how to categorize metrics from the tactical to strategic. (Photo credit: Wikipedia)

Among many reasons I wanted to feature Pamela Vaughan’s article on the ADM Professional Community is my own direct experience working on teams that provide marketing services and advertising products to auto dealers. While working on such teams for many years (since 1997), I was privileged to collaborate with some of the brightest minds in automotive marketing. A standard operating procedure for such supplier and service provider based teams is to focus on researching a never ending supply of Key Performance Indicator (KPI) data and Reporting Analytics… Many hours and a high level of concentration are routinely invested in extracting the data points that make the products these teams provide to car dealers appear more effective than they may actually be for most dealerships.

Data Bias Logic and Justification

The logic behind these initiatives is similar to the old days of the Cold War with “Mutual Assured Destruction” (MAD)… Since each supplier’s perception is that their competition is doing it, they feel a tremendous amount of pressure to extract the compelling data that will empower their sales team in gaining a competitive advantage while seeking each dealer’s attention.

Although the data is usually factually true, I have seen far too many dealers exhibit a tendency to become overly dependent on supplier provided reports and metrics. This is then exacerbated by the far too prevalent tendency to focus on examples and “Case Studies” taken from other dealers which have been selected for the purpose of making a sales presentation or proposal.

The Most Relevant and Useful Marketing Data Sources

Like most automotive professional marketers, I am a firm believer in the appropriate use of Key Performance Indicator (KPI) tracking and reporting. However, it serves every dealer well to realize that the most important metrics are the ones the dealer extracts themselves, or by trusted managers using the same measurement tools and parameters each month.

The most relevant Key Performance Metrics (KPI) are the ones generated by the dealership when compared to the previous month, the same month a year ago, the YTD compared to the same time period a year ago. These are extracted and reviewed without filtering or withholding of data points that do not show what somebody wants to see reviewed by the dealer. As stated, my personal experience is that Marketing Reports and Performance Metrics that are reported to dealers by suppliers and service providers are completely factual, but they have been selected by design, and for the purpose of casting a favorable light on the products or services that supplier offers.

: Market-mix models (Photo credit: Wikipedia)

Beware of Supplier Built Reporting Systems

There is a growing trend for many of the more all inclusive dealer website and marketing service suppliers to create proprietary and inclusive reporting systems. These supplier provided reporting tools and apps remind me of asking a fox to report on the state of the hen house. I have seen several of them make use of such tactics as (for example) blending organic traffic with paid traffic, then dividing by the dollars the dealer spends within THAT SUPPLIER’S Search Engine Advertising (SEA or SEM) system. The assumption being that all traffic to the dealer’s website came from their own source of search advertising, which results in reports that appear to be a very low “Cost Per Visitor”… The dealer that views such reports will routinely confuse this metric with Google generated “Cost Per Click” data, incorrectly concluding that the supplier’s system is performing far better than it actually is.

Such systems also take advantage of OEM sponsored or third party provided Search Engine Advertising (SEA) programs to enhance what their internal and proprietary reports show the dealer. These types of supplier built data and KPI reports are being generated from “Bias Engineered In” reporting systems. This creates a compelling argument in favor of using independent and more reliable KPI reporting and tracking applications, such as Google Analytics. Reporting application such as Google Analytics, WebTrends or Adobe’s SiteCatalyst are a far better source of data for making marketing decisions. They are unbiased and more reliable for dealers to use.

Almost all supplier engineered, designed and built-in reporting system will BY DESIGN contain a bias towards making value added products and services sold by that same supplier look better.

via Automotive Digital Marketing Professional Community