Which is better for measuring car dealership success—metal metrics or marketing metrics?
How are you measuring success? It’s not solely about revenue, as there are many things that eat up margins. Car dealerships that want to understand performance and profitability dive into their data and measure a variety of activities within the sales cycle. There are many “standard” metrics that come from the world of marketing, but they don’t reveal the entire story. That’s why metal metrics are so valuable. These are the dimensions that Lotlinx uses versus marketing metrics. So, is one better than the other, and what insights do they create?
What are metal metrics?
Lotlinx formulated the concept of metal metrics. They measure success by linking all dealership activities back to selling cars. Working closely with our dealer partners, we have reduced a car’s days on the lot by 7-10 days, ultimately increasing profit by $350 per vehicle. As a result, we have helped dealers significantly move up their rankings within their market/region.
Examples of metal metrics
We classify these things as metal metrics:
- Advertising spend on each car sold: This information ensures that profitability for each vehicle is accurate.
- Inventory days on lot: Know what your turnover rate is and what’s impacting it.
- Profit for each car sold: By knowing all the costs associated with a vehicle, you can calculate the profit.
- Number of in-market buyers: This metric offers information on your market share.
- VDP (vehicle display page) views: VDPs are the key digital touchpoint for buyers, and how often they’re viewed provides context into consumer behavior.
- VIN Health Score: Check on the “health” of each VIN with factors around costs and potential profit.
- VDP view attribution by channel: Learn how people find VDPs to understand the buyer journey better.
- Competitive pricing per VIN: Gain an outlook on how competitively priced cars are at the VIN level.
What are dealership marketing metrics?
Most dealers give a lot of credence to marketing metrics, which all revolve around ad performance and consumer interaction. They do have value but often need context, especially how they specifically link to a sale.
Examples of dealership marketing metrics:
- Number of ad impressions
- Engagement rate
- Page views
- CPM/CPC (cost per mille/cost per click)
- Traffic by channel
- Cost per lead
- Conversion on page visits
Why are metal metrics more important than marketing metrics?
At the end of the day, a dealership’s primary goal is to move metal as quickly and profitably as possible. Marketing metrics like impressions, clicks, ROAS (return on ad spend), engagement, and leads mean little unless they result in a car sale.
Metal metrics offer more concrete intelligence. Current marketing metrics don’t measure against sales. Rather, they do so against a set of benchmarks within their categories. If you don’t build your sales funnels with the ultimate conversion of a sale, it’s impossible to measure their effectiveness against your key objective.
When there’s a disconnect between what a metric means in terms of the conversion, the insights you view aren’t as accurate or helpful. Ideally, you would look at all these metrics to dig into where you’re performing well and what needs work.
What do dealerships gain from metal metrics?
By using the Lotlinx inventory management platform, metal metrics are transparent and accessible. This visibility is possible because of all the data analytics capabilities of the system at the granular level, powered by artificial intelligence (AI).
The dealer management technology that delivers metal metrics focuses on three solutions:
- Data intelligence: Data is only valuable when it’s actionable. Within the platform, machine learning tracks 163 variables related to real-time inventory data, consumer behavior, and market demand.
- Dealership profitability: Metal metrics tie directly to profitability. They focus on the costs and margins associated with each vehicle. With inventory management tools, you can identify things impacting profits, such as aging, price discrepancies, and competitive factors. These capabilities allow you to implement VIN-specific inventory strategies.
- Inventory turnover: With metal metrics, it’s easy to recognize how quickly you’re turning your inventory. You can discern the risks of aging, pricing, and competition to customize improvements in turn rates.
For a preview of what our customers gain and how they’ve increased profitability, check out our case studies.
Get the complete picture of performance and profitability with Lotlinx
Take control of inventory like the thousands of Lotlinx customers. You’ll gain so much with savvy, modern technology. Our VIN inventory management platform enables you to adapt to a dynamic market, mitigate inventory risk, and increase volume, turnover, gross, and market share.
Request a demo today to see the platform in action.